What Were They Thinking?

The massive Ever Given container ship has been freed from the Suez Canal’s mud just in time for the market’s open. While positive for global trade, stocks are arguably more focused on the ambit of the latest Wall Street scandal – this one involving the Reddit-style goings-on of Archegos Capital and the banks which apparently neglected to check on their collateral from time to time.

The failure of some of the biggest and most sophisticated banks in the world to recognize the Long-Term Capital Management doppelgänger on their books is emblematic of the frenzy with which institutions and individuals alike regard the equity market. Why bother analyzing exposure when central banks will never allow a significant decline anyway?

Futures are off about 20 points – just enough to put SPX’s 3.618 Fibonacci extension at 3956.64 to the test on the open.

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