So Full of Shit I Can Smell It From Here…

Are you disgusted by the title? The market action? You’re not alone.

Last week, in 3.5 days the market indices dropped 6%. Yesterday, in 1 day it was up 3%. Yesterday bellwether stocks were up 7% and every single S&P 500 stock was positive.

Today those same bellwethers are down yet something is pinning the SPX to 1200, up on the day.

Every market move occurs at the open driven by low volume futures trading. And daily market volume is ridiculously low, but that doesn’t matter.

Two weeks ago we “discovered” that Politicians were trading legally on insider information.  Today we “discover” that Paulson, the Treasury Secretary of the United States of America, told his “friends” non-public information that they most certainly traded on.

Europe has no plan other than to deal with each crisis individually and as it appears.

House prices will be down another 10% this quarter as they have been during each fourth quarter since 2007.

Money is pouring into the perceived oil and paying ever higher prices regardless of demand, just like in 2008.

Yet we are to believe that consumer confidence just jumped 20 points this month?

MARKETS ARE ILLIQUID YET CORRELATED. IT IS A RECIPIE FOR A MINSKY MOMENT.

Use these insane Bear Market, rip your face off rallies to FUCKING PROTECT YOURSELVES. Play the grind all you want but know what could be coming at any time.

Caution pisses traders off, until they lose their shirts. Don’t be pant-less when the market gives you the finger.

 And remember, IT’S MONTH-END…

Welcome to Black Friday, a most American phenomenon.

Today is the day where folks take shopping to a new level. It is a full contact sport where it is kill or be killed for that little TV/PC/Blender, etc. I hope you all got what you wanted!

Black Friday is a little different this year. Early reports say that 75% of spending is cash or debit. CASH or DEBIT? You know what that means; not only is there no credit for mortgages but now for shopping. With a savings rate bumping along the bottom, it means next year won’t be all discretionary purchases. Sorry Tiffany.

And the markets deserve a little respite considering it has been one of the first negative Thanksgiving weeks in modern history. We are now 24 for 27 years up, down from 24 of 26. lol.

It continues to amaze everyone that the market is able to sustain itself at these levels considering that the entire continent of Europe is determined to fall off a cliff and have a masive “Lehman Moment”. Only the United State of Europe or a full Brady Bonding of Euro-Sovereigns will clean up the mess. But there continues to be the hope that the FED will print a couple of trillion dollars and give it to our Forefathers. That may be the only reason that there has not been a full-on liquidation of assets around the world. You know how scared investors and traders are of missing the next bullshit rally. And remember, Europe doesn’t give a shit about Thanksgiving.

There has been significant technical damage during this week-long sell-off. We have given back about half of October’s Magical Mystery Rally and the charts look shitty. But unless there is a bone-fide financial failure somewhere, we are ready for a bounce to happen. It may not stick and it may not be where you hope and expect it to be. But after this little test of the SPX 1150 area, a test of the 1200-1220 area is easy before year end.

Oil and Gold are the only safe havens in the world today. Nothing is about supply and demand yet. When “real” and “true” market forces finally set in we will have a fantastic, generational buying opportunity. We will also need the patience of Job for our payoff. Enjoy our “Market by Central Bank” for as long as you can, but PROTECT that retirement account!

Have a great long weekend and see you at Best Buy!

I don’t need to pen and Bleier-esqe “End of the World” scenario piece. I have CNBC to do it for me.

Of course it is 2008 all over again, but without the surprise and including trillions in liquidity stimulus–Bernanke style. Some you know about, some you don’t.

But don’t fret because there are no real buyers or sellers. The capital markets have been plied with unlimited liquidity, yet there is seemingly none to be had. The fear and respect that trillions from Central Bankers have bought in markets has kept most holders of assets nervous but nonetheless holding their positions. The fear of bailout, stimulus, and other surprises has brought about a curious bearish complacency hitherto unseen in times past.

The fact is that even if you forget about Europe for a second, business sucks. Just ask anyone. The Dow Jones should be at 10k, not 12k. Most market participants know this deep in their dark and angry hearts. Yet today’s option expiration is biased to the upside. And the stock market remains thinner than Kate Moss doing eightballs.

With Turkey Day coming and a very short week ahead, perhaps markets can stay above SPX 1200. But we will test 1170 in the near term yet stay in our mind-numbing trading range and the predictable holiday complacency may be hold together long enough to help you get our shopping done. But then again, maybe not.

Many market participants have discussed the similarily between mid-to-late 2008 and today. Both the technicals AND the fundamentals are remarkably similar. A run on banks, massive inflows into oil, etc.

OH SHIT. ZERO HEDGE JUST PUT OUT THE SAME COMMENTARY.

Never mind…

Our marketplace has become something other than the usual marketplace. It has become the “Welfare State Market”.

For every issue and problem there is a “Policy Response” that is designed to deal with it. Usually it is simply the creation of more capital to give to the Primary Dealers to speculate with or to buy Sovereign Debt or to buy some kind of failed investment product like Mortgage Backed Securities. Stock investors and traders see that action and they “feel” that the Powers That Be won’t let the ship go down. But the ship has already sunk, we just don’t know it yet because prices are where they are.

The entire edifice of market prices are designed to get you to believe that the intervention and support is real. It is only as real as we allow it to be in terms of price.  That is usually how Bear Market rallies work, but this is something much different. This is a situation where asset values are worth only some percentage of what prices are being reported as, but nobody wants to admit to reality.

You can talk about fundamentals or psychology of investors and attempt to justify what markets are doing in the light of the ever present Wall Street Complex, but eventually one set of facts that represents reality–and not price–must eventually be dealt with. Is today the beginning of that day? Almost certainly. And just in time for the Holiday Season. 

But the record-setting October run was created in a “G-20 Policy Lab” and had zero bearing to the reality of the world today. But that pesky “buy the dip” or “buy the rumor” reality of market action and price had most everyone only believing one set of facts. That cushion will allow our markets to deal with a series of problems that has been present for months and years, but masked by “policy response”.

The markets eventually prove themselves to be bigger than almost anything that can be invented to manipulate it. At some point, even free money won’t work any longer. Keep your guard up and see you at SPX 1170, the important midpoint area of our yearlong trading range.

I’m not sure that you’re aware of exactly what is going on, but it is a mess out there. You wouldn’t know it watching the stock market, gently RISING up 100 on the day.

Europe is being overthrown in a bloodless Banker’s Coup d’etat. Things will either fall firmly under Teutonic Control or all Hell will break lose and there will be a historic run on the banks. Perhaps both will happen.

Over here, another multi-billion dollar criminal brokerage flush has occurred and regulators are nowhere to be found. Plus the economy really sucks for the 99%. Even Widows and Orphans who live on the interest are hurting, big time.

Yet, throughout it all, the markets digest their historic October run and the Dow trades just 17% from all time highs. Replicate October’s run and we will be at record highs. Chew on that for a moment.

Commodities have spiked higher on the “secret” Fed stimulus and the promise of bailouts. But other than fear dominating the gold, silver and oil markets, who exactly is consuming these high priced commodity products? They are not being used, instead they are being stockpiled as a store of wealth, just in case. And through it all, the stock market saunters around recent highs.

After momentus and historic market velocity, its time for the markets to chill the fuck out. Even in 2008’s disaster, the holiday season was stable. And how can prices be justified at this time? They don’t have to be. That is the logic of a market that now functions despite itself. There is no earnings season to contend with. Just the hope of more Central Bank Intervention, bailouts, stimulus, etc. etc. etc. There is no organic growth, only false and manipulated numbers. The reality is that we are about to undergo shrinkage. Politicians, Economists, and Wall Street Prognosticators will have to come to terms with this.

The way to play is to look for already lowered expectations. Most will have not-so-great charts. But if you’re buying a “good chart”, you will be bagged 75% of the time going forward.

Who knows? Maybe buy and hold is ready to make a comeback!