6 Jan 2022

Yeah baby there is currently more fireworks in the markets than on a typical Sydney New Years Eve.

As we speak Bitcoin is struggling to find its feet. Down 6% on the day (US Wed I will need to adjust the time zone on my account – see below table) and finally we got some action in the US broad indexes with the S&P500 closing down -1.9% and the Nasdaq down over -3%. I am not normally at a loss for words but it feels like all this action has caused me to spin my wheels.

On a separate note while I compose myself I am so happy that Noval Djokovic got sent packing as whatever loophole he crawled through it sure as hell didn’t have the right optics. This is what the President of Serbia Aleksandar Vucic had to say,

“I told our Novak that the whole of Serbia is with him and that our bodies are doing everything to see that the harassment of the world’s best tennis player is brought to an end immediately.”

Speaking of stately leaders Rocketman wasted no time getting one off yesterday, raining on the parade of South Korea’s ground breaking rail line ceremony.

On the subject of rockets we have Borat kingdom Kazakhstan posing a wee bit of a threat to the cost of nuclear power with the Uranium price taking off (was that too much?) 8% overnight.

Speaking of energy. Oil got its booster shot with OPEC agreeing to increase its daily production by 400,000 barrels a day. In case you ever wondered what an oil barrel looks like, well (another pun as intended) look no further. I am going to make a prediction here, look at the chart of Brent below. I think we have topped again will now see continued selling.

Did you know that a “barrel of crude” contains only 42 gallons rather than 55 gallons like —most of us associate with the size of an average industrial barrel?

This amount became the standard back in the mid-1800’s during the first American oil boom in Titusville, Pennsylvania.

Crude Oil, Cooking Oil, Fossil Fuel, Garbage, Oil Drum

So the Fed finally fessed up to the inflation bogeyman and all but guaranteed an early start to reversing the stimulus. Just telegraphing what was already implied in the bond markets caused a convulsion much the same as when a heroine addicts isn’t able to get a “fix”. They called it taper tantrums the first time round I wonder what is in store the next time round.

Newton’s third law of motion is: for every action, there is an equal and opposite reaction. Hello my name Karma and I am a bitch.

Just to end with a bang check this chart out for a little bit of breadth asymmetry. It starts from the bottom of the Covid-19 bear market on the 15th March 2021 until the end of the year. 5 stocks: Apple, Google, Microsoft, Tesla(another rocketman) & Nvidia (not the hand cream) took the equal weighted S&P500 from a 14% return to 20%. Of course if you are into the big stuff then you made a whopping 46%. Naturally every stock picker is a hero when they get it right, it will be interesting to see the return of those 5 stocks relative to the index if indeed we are at the start of a meaningful correction.

I wait at the ready anticipating a new central bank bazooka to try and keep the crack house party rocking. Who knows maybe Elon Musk will be appointed the new Chairman of the Fed.

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