As we witnessed briefly in night-before-last’s action in the futures market, the exit door will likely appear very narrow when the chasers ultimately wake to reality.

As for this morning’s data; German industrial production beat expectations (EWG [up 71bps] is our 2nd-best performing position this morning), Brazil’s industrial production missed (EWZ, which we cut in half this week, is off 29bps this morning) and U.S. new weekly jobless claims came in better than expected by 9k; however, continuing claims continued to expand (that’s a problem), up 75k (that’s big) on the week. The market of course (fomo) saw only the new claims number.

In terms of positive catalysts “on the calendar”, there’s still the actual signing of phase-one, then, for the U.S., a Trump-friendly impeachment outcome are the two most obvious. In a more typical market setup you’d expect these (given their high odds of coming to fruition) to be sell-the-news events, as they’d normally be baked into the price of stocks. But, again, this is clearly for now a FOMO market. When it’s not, it’ll get ugly in a hurry.

As for high-probability near-term negative catalysts; the Fed is the biggy — they totally miscalculated again the repo situation and, thus, continue to pour liquidity in every night. The stock market loves it, but all it sees is liquidity, it’s completely oblivious to the fact that the Fed isn’t using it like QE, it’s using it simply (and desperately) to keep the financial plumbing unclogged. The market will have to come to terms with reality if/when the Fed gets ahead of the curve on this one.

As for further-out potential negative catalysts, geeze!, where to begin??