Without FANG Stocks, the Market Has Gone Nowhere For Three Months
For weeks I’ve been noting that stocks are being driven by a market rig.
By way of review, that rig is as follows:
1) Someone slams the VIX lower.
2) This forces risk-parity funds to buy stocks, usually the FANGs or large-cap Tech names (Facebook, Apple, Netflix, Google).
3) FANGs rally, which due to the weighting in the S&P 500, forces the overall market higher.
The last point is key.
When you remove the influence of FANG stocks (Facebook, Apple, Netflix, and Google) by giving every company in the index equal weighting, you find that the market has yet to reclaim its former peak May peak.
Why does this matter?
Because ALL market rigs, no matter how clever, ultimately fail. And when they do, the failure can be MASSIVE.
Remember this one? This was a market rig than worked for months… and then failed spectacularly in a single day:
A Crash is coming… it’s going to horrific.
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Chief Market Strategist
Phoenix Capital Research