So, our most recent “Magical Mystery Rally” (the seventh in two months) is because the Europeans are going to “create” a huge pile of money to “ringstop” the banks and Sovereigns so they don’t default. Are you kidding me?
We’ve had a simultaneous worldwide rally that has taken the major indices back from the brink of what would have been a massive breakdown. The market internals were almost 100% correlated with everything moving up simultaneously which is a rare enough occurrence. And markets spike higher on every rumor of “They” “Fixing” the problems. Can you say “Sell The News”, good or bad?
MARKET ARE LYING TO YOUR FACE, AGAIN.
Sure, price is everything. And sure, a lot of shorts built up through the intensely horrible newsflow of August and September. But the markets are ignoring fundamental reality again and acting in an almost perfectly counter-intuitive fashion. No, its not just being a contrarian for contrarians sake. The market is once again luring you in with its near-term action and asking you to believe.
All the low volume volatility of recent weeks has served to scare the remaining individual investors out of the game. They are sitting with their Retirement Accounts and most won’t touch a thing, whether the market goes up or down. The rest of the market has become dominated and overpowered by the correlation between currencies, commodities, stocks and bonds. The programs work in milliseconds to run over any intra-market movements with instantaneous results. By the time you hear or read the news, the market move is over and you as an investor are forced to chase.
Some call this a “Broken Market” and it sure feels like it is “loose” and could move 10% on a moments notice. This is the new normal and it is a very dangerous place for anyone resembling a “normal” investor. That doesn’t mean to sit it out though. What you should NOT do is chase momentum well into a move. Investors need to buy “in the hole” after days or weeks of misery. And don’t listen to the Wall Street Complex that would have you buy at any and all times, no matter what. They eventually win, but from what level is what is important during high levels of uncertainty.
We are still near the top of the range and most are “hoping” for a breakout. It’s option expiration week and we know the Plunge Protection Team works hard, but they are now ‘spent’ having simultaneously bought the bottom of the trading range in all the major worldwide Bourses. It forced the reallocation out of bonds and into stocks and commodities just in time for earnings season. And you wonder what Timmay has been doing traveling to all those countries!
FLAME ON!
If you enjoy the content at iBankCoin, please follow us on Twitter
Perfectly stated.
Are you an advocate of holding gold/silver?
It sounds like you should be as you recognize the fraud of fiat paper, but I have never heard you explicitly say so.
The destruction of the financial system is possible but it is a low probability bet, still.
http://mises.org/images4/ZimbabweIndustrialIndex.jpg
Nothing wrong being long stock if hyperinflation actually does occur.
I think the euro collapses before the US dollar because the US dollar can export 40% of it’s inflation to central bankers around the world and it is still the reserve currency. it isn’t going to change anytime soon unless they specifically make a currency for the purpose of being the world’s reserve currency. Maybe after the euro collapses, they will decide to change currencies globally and then US loses reserve status and goes hyperinflationary.
Clearly this man has a mammoth cock.
Great post Scott.
Seven Scott?!? Seven magical mystery rallies? The one before the crash was pretty weird, as was this one, but SEVEN?
My portfolio would love for you to be right, but people need to remember that QE2 was suppose to be the biggest sell the news event of all time. The announcement even came in on the low end of estimates. Didn’t matter much.
GO JOHNNY, GO!!
POMO operations is what has made the difference. Prior months were 14 billion, this month was 44 billion.
http://www.newyorkfed.org/markets/tot_operation_schedule.html#tabs-2
Investing today is about guessing what the PPT will do. Insiders benefit, outsiders lose.
Also, HFT runs stops all the time and adds volatility despite what their PR departments state. With less volume overall, the big banks, primary dealers, exchanges and market makers are one big happy family and can make the same profit if they can make more per transaction – spreads and writing options all due to volatility.
I could save the government a fortune in PPT costs. Window dress quarter ends by propping up the market only at that time, and prop up the market during major earnings weeks since earnings news can cause over reactions. All other times, let actual market forces take over. This would beat the ridiculous in and out action of market support that makes it impossible to invest versus gamble.
5 stars.
“But the markets are ignoring fundamental reality again and acting in an almost perfectly counter-intuitive fashion”
they have been ignoring it since 2009 but jumped from 670 to 1370… if you are saying that SPX cannot jump to 1400 after FED bails out Europe, you are a greater fool than market.
Lol. Pull your dick out of your ass Karahan..
Or put more politely. Is that right Karahan? So in what stocks have you gone long? Where have you placed your stops? Oh! and might I ask how big is your bet?
Scott – are you suggesting that we sell-off in front of the holidays? We have had nice Santa Claus rallies in 2009 and 2010 – can’t they at least hold this POS together through the end of the year? Maybe go down to 1170 and then “Twist” higher to 1250+ by early January?
i dont trust this shit either. thanks scott.
There is absolutely no fear in this market at all!
not how we’d like anyway. you cant have fear and rumor at the same time,one or the other. i wont get shaken out of puts damn it.