Authored by Sven Henrich via NorthmanTrader.com,

The first round in the Thunderdome goes to bulls as another hopium based rally emerged driven by relief headlines. First on the news that Hong Kong tensions appeared to defuse and then of course another trade optimism inspired ramp triggered by the news that a China US trade meeting is to take place in October.

Hope dies last, hence tops are processes. Whether this is a top in process remains to be seen.

Why are rallies driven on hopium? Because all rallies are driven by multiple expansion and based on hope.

Hope that central banks can repeat a 2016 save by once again going on another intervention cycle, hence I’ve stated numerous times no bull market without central bank intervention.

Hope that the ECB will bring out the bazooka next week and re-introduce QE and cut rates to further negative despite CEOs of European banks imploring the ECB not to do it as it will risk the financial system according to them.

Hope that the Fed cuts more and more and stays beholden to markets and makes record loose financial conditions even looser.

Hope that the US and China agree to a trade deal even though both sides remain far apart on core issues and high market levels and so far working stimulus in China being potentially prohibitive of either side feeling the need to capitulate.

Hope that the global slowdown and emerging

Keep reading this article on Zero Hedge - Blog.

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