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!
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