S&P 500

With the Fed decision just one day away, followed the very next day by the increasingly more irrational BOJ, stocks had no desire to make significant moves and overnight's boring session was the result, as European stocks and U.S. index futures rose modestly but mostly hugged the flatline while Asian declined 0.2% for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week. China’s stocks rose the most in almost two weeks, up 0.6% but failed to rise above 3000 on the Shanghai Composite, in thin trading.

Outside of an exogenous geopolitical event - which given the way the world is tilting is becoming an increasingly likely occurrence - BofAML believes a bear market case is strongly supported by the probability of an economic shock most likely be tied to credit where signs of stress are building the most.

There are four simple factors that suggest problems ahead...

1. Investors are starting to believe we’re “late cycle”

And your post-Doha gains are... gone...

Bloomberg's Richard Breslow, former FX trader and fund manager who now comments on markets, has been on a roll lately. One week ago, he officially lost it, going on an epic rant how central banks have devastated "markets" with their constant intervention (proven yet again with today's report that the BOJ now is a Top 10 owner of 90% of Japanese stocks): "You don’t need to be a Taleb or Mandelbrot to calculate that we have been having once in a hundred year events on a regular basis for the last thirty years" he raged.

Now that everyone has finally figured out that the only way to not get steamrolled in this "market" is to frontrun central banks - something we have been pounding the table on since mid-2009 when we said that the only two financial statements that matter are the Fed's H.4.1 and H.3 - and not just central banks, but central banks who are now so intimately intertwined in capital markets that the moments they adjust one variable, they unleash a torrent of "reflexive" actions which promptly leads to a cascading effect across the markets and promptly undoes whatever it is that they want