Greatest “save” of the year?

Today, July 12, will go down as one of the most curious, interesting and greatest “market saves” of the year, maybe even the cycle.

It all started during the early morning hours when SPX Futures were trading down about 6 points. Then, mysteriously at 4am, they tanked, testing the 1295 area of major support. At that point, SnP’s were down about 25 points. With Europe going “off the rails”, there was some overnight fear. But just as mysteriously, futures began to rally making back almost the entire loss. By the time the markets opened, Futures were indicating down about 6 SPX points. And just as mysteriously, it dipped by no more than a few points once trading began.

Trading for the first few hours was heavy but the pre-market weakness quickly faded from memory. We see-sawed from up 20 to down 20 points in the Dow but by then, the “fix” was in as the Fed Minutes were to be released later in the day.

About a half hour before the Fed Minutes were released, gold began a very quick spike to near record highs. Silver reversed sharply to the upside and oil built onto its gains. It was then revealed in the Minutes that “further stimulus” would be appropriate given a continued weak economy. With that comment, the buy programs were run hot & heavy and the equity market spiked, sending the Dow up about 60 points.

During the course of the day, I tweeted a comment that “Flat is the new Up Every Day”. That was just before the “further stimulus is warranted” spike, and that comment is the unofficial leak of a future QEIII.

The entire day of trading has been most curious and before the release of the FED Minutes, I was thinking that today would go down as one of the greatest market “saves” of the year if we could close flat to higher. Rather I “believe” that someone or something worked very hard to frontrun the Fed Minutes and/or buy some market stabilization.

I don’t even want to get into the political machinations of the Debt Ceiling or the CDS blowout in Euro-land. I just want to highlight the most unusual trading today. And all the while we stayed within the important SPX 1320 area–which was the old downtrend line before the “Magical Mystery Rally” of two weeks ago. It is all becoming even more “fascinating”.

Remember this one thing: if the stock market goes down by more than just a bit, spending of all kinds will stop dead in its tracks. Can’t have that!