Crushed

 

 

by Larry Levin

 

After stating a few positives from Wednesday's trade I got real with the following "If you wanted good news, that's about all I’ve got and I don't know how long a technical bounce will last.  If it can hold together for more than a few hours and the market ignores the sure-to-be bad Jobs Report on Friday, it just may pop back to the 1295.00 / 1300.00 levels.  A rally beyond there seems unlikely for the following reasons; fundamental economic news is awful, European banking crisis will soon be headline risk again, the S&P broke all of its higher support levels, the major indices have all closed below their respective 200-day MAs, and the S&P futures chart has finally broken the MAJOR channel going back to The Bernank's intervention policies that began in 2009 to rig the market.  Of course, this last point will be more influential if it has a weekly close under said channel."
 
Well, it did not even last a few hours as I had guessed and all of the points mentioned above helped slam the market from the open to the closing bell.  The Dow closed down -512 points (~4.2%), the S&P was crushed -60 points (~4.5%), and the Nasdaq composite was hammered -137 points (~5.10%).  Hammered, indeed!
 
I haven't heard it yet, but surely the losers of the move - your garden variety idiot on Fraud Street - will be saying "Nobody could have seen it coming - nobody!"  Yeah, uh-huh.
 
Let us count the ways that led up to this - or the handwriting on the wall that was viewable from miles away, if you like.

• Weekly unemployment was worse than expected and last week's lies from the BLS were once again revised WORSE than originally reported - over 400k instead of the BS that it was below 400k for the first time in months. Or was that years?
• ISM non-manufacturing worse than expected.
• ISM (manufacturing) far worse than expected - as in, below even the lowest guess of the clueless Fraud Street economists.
• GDP far, far worse than expected with shocking revisions to prior estimates, lower of course.
• Chicago PMI worse than expected.
• Consumer sentiment worse than expected.
• Personal income and spending BOTH worse (read: lower) than expected.
• CONgress showed the world that they are just a group of petulant lil' b@st@rds that have no intention whatsoever of actually cutting spending.
• The president is showing the world that his "Hope & Change" mantra of the election was nothing more than empty rhetoric. He is an empty suit.
• And finally, the European sovereign and banking debt "crisis" never went away, it just came off the headlines while the feckless losers in CONgress battled over no change in spending.
• Italian bond yields are soaring. Italy will need a bailout.
• Spanish bond yields are soaring. Spain will need a bailout.
• Germans are tired of having to fund this mess and considers leaving the Euro.

Yup, "Nobody could have seen it coming - nobody!"
 
But like I said yesterday, Ben Bernanke will come to the rescue soon.  Like his Japanese, European, and Swiss central banking friends, he too despises free markets and will "intervene" in the US markets.  The question is when?  The S&P has already blown past a 10% sell-off from 1373.50 so the market is officially "correcting."  A 15% correction gets the S&P to 1167.50, while a scary "bear market" is acknowledged at 1098.80 with a 20% fall.
 
Somewhere in there The Ben Bernank will call upon JPM and The Goldman Sachs to prop up the market - with your money of course.

  

 

Trade Date: 8/4/11

E-Mini S&P Trades*

(before fees and commissions):

1. No "Secrets" trades filled today.

2. Algorithm positions (17)

3. "Reading the Tape" positions (22) ...combined Secret's, Algo, & "Reading the Tape" total...+33.75 

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