Is the FED the greatest Hedge Fund ever–without 2 & 20?

I’m beginning to think that Bernanke as us all pegged for suckers. I bet they front-run their own announcements!

Who was buying commodities in August and in size before the specter of QEII? Markets were knee deep in shit. Remember? Perhaps Maiden Lane bought in anticipation of everyone else jumping on their QEII bandwagon. After all, they now actively trade, don’t they?

Imagine if they have been sellers into the “POMO keeps the market up forever” idiocy? What an accomplishment. They tell everyone they will “destroy the dollar and the world, trade accordingly”. But at the same time they are front-running the street on every step.

And why couldn’t this be true? They have distorted and perverted every policy and market in half the world. Why shouldn’t they make a profit? After all, we need the money!

Congratulations and Happy Birthday to IBC!

My affiliation with Dr. Le Fly started just this year. I came across IBC after publicity of the “digital dickweed” kind. Then one day The Real Fly and I traded comments on Twitter. That’s right, Twitter. I didn’t know it, but we had briefly met a decade earlier.

We met for lunch in the Oak Room and it was love at first sight. I’ve been contributing to IBC ever since. The Doctor is actually one of the good guys in our business, always doing “what is right”. I joke with him that he’s a “dark MF”  but his stock picking and money management techniques are outstanding. And the creativity, humor and quality of writing continues to enlighten and entertain.

But that is only part of what you get here. The analysis and community is unparalleled. The contributors are first rate. And it is only getting better with new products.

Break a leg, Chess & RC, for 12631!

Yesterday saw the near-term culmination of the QEII trade. I know, a week late!

Gold, silver and all kinds of commodities went screaming to new yearly, post crash and some even to all time highs. Yet the dollar AND bond yields were UP. Go figure!

This should have happened before the official announcement of the FED new free money gambit–but instead too many were worked up to expect the “sell the news” reaction. Yesterday, almost a week after the news, was the parabolic interday reversal and the post news reaction.

It was all layed out on your bed, like the way your mama used to lay out your “close” in the morning, by me, here, the day before, when we told you that the greatest laggards are today’s leaders. And when the laggards lead, its late in the game. And there will be more today.

If you are looking for “The Scott Bleier Show”, you’ve found it. Just click Mr. Linky overhead and see the show!

Commodities of all types, especially metals, went balistic today in what looks like a parabolic finish. I guess Paulson has to make up for his BAC haircut.

What is driving the action is simply fear. Fear that the dollar will be cheapened into nothingness. Yet, the dollar is holding very steady. It dropped 15% In FRONT of QEII. Why should it drop any further? Because Glen Beck says it will? The other reason could be that there will be a terrorist attack on the US. There has been lots of chatter about it. That would spike gold bigtime. And oil too.

But short of new trillions or surprise bombs, the short dollar/long gold, silver, copper trade is as crowded as I have ever seen a macro trade since the short yen trade of the few years before the Credit Crisis. This may be even more crowded.

The stock market is taking it all with appropriate aplomb. A little dip here, some lack of buying there. But no real damage. This morning really looked like a high volume ending to the non-existant “sell the news” mini-cycle that started the day after the FED’s very well telegraphed announcement of last week.

Equity markets have been up 10 of 12 weeks and the 2 other weeks were flat. This is similar to the previous 10-12 week up cycles in 2009, after the initial announcement of QEI and after the “Stress Tests”. This cycle is cleary extended. In fact it is 5x extended and I believe the mini-cycle is coming to a close. Over the last few days it has been the laggards and the most speculative stocks that have been leading the markets. They say when laggards lead, it is late in the game. There you have it.

BTW–Many of our summer equity purchases are meeting and exceeding our price targets. Either sell or raise your stops. Don’t get bagged, baby…

If you’ve come here in the morning looking for “that loud guy”, just click the banner to see “The Scott Bleier Show”, and you’ll get your daily “Fix”…

The peak of market energy was reached last week. Shorts, hedgers, fence sitters, performance chasers, and lemmings of all types shot their collective loads in the post-election/FOMC meeting spike to a marginal new high. The fat finger above all those Doji Stars was it for now. Today looks like everyone who is anyone has taken the day off.

There could certainly be more low-volume, buy-program upside–especially considering that nobody wants to sell up here. It’s “risk-on” and no worries with the FED pumping furiously. Or so one would think.

What is working now? Only the most lagging, speculative, unaudited, and communist equities made exclusively in China. Kudos to the “Dr. Fly and the Lotto Players”, bigtime, but remember when these ran last year–starting about this time of year? They were monstrous to the upside, but most gave it all back–and more. Dating an “Asian” is cool, right?

BTW–Sure feels like a test of SPX 1200 comes this week. But that’s nothing!