Mega Short Covering Rally

by Larry Levin


Wow, what an explosion. Today's rally was incredible and didn't stop until the final few seconds (literally) elapsed. There was no news. There was no special deal announced. Nothing fundamental happened, yet the market screamed higher.

The only thing I could think of was a possible central bank currency manipulation. The Swiss National Bank has been aggressively manipulating its own currency by selling it for the Euro. Many of its banks are on the hook for real estate loans derived in the Swiss currency but being held in other countries. As the other country's currency has fallen and the Swiss' has risen, those holding the home loans derived in the Swiss currency are finding it even more difficult to repay. Of course that would be real...REAL...bad for the Swiss banks and the Swiss central bank has been overtly manipulating its own currency on behalf of their banksters.

Central bank currency manipulation NEVER works in the long run, but that never stops the guys who have to be as dumb as an economist to keep trying it.

Although it doesn't look like that happened today, it will again. In the meantime, the banksters continue to borrow money in cheap currencies or pairs in order to buy equities. Massive amounts of leverage by the banksters hasn't gone away and may have even increased.

The new pair seems to be the AUD/JPY. The following chart shows the AUD/JPY chart with the time it rallied or fell being highlighted.




The next chart shows the ES, which turned just minutes AFTER the AUD/JPY pair turned every time. Banksters are using currencies again to ramp stocks.




Trading stocks? Not really - welcome to Forex trading.




Previous Day's Trading Room Results:

Trade Date: 7/7/10

E-Mini S&P Trades*
(before fees and commissions):


1) No "Secrets" trades filled today.

2) Algorithm positions (10)

3) “Reading the Tape” positions (10) combined Secret’s, Algo, & “Reading the Tape” total… +5.25



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