A friend of mine mentioned a few things to me this morning that made me laugh. He wanted to talk about the market because it has been going up nearly every day and what made me laugh were the conclusions he came to: that trading this market must be great, and that the economy was back on track. Without getting into the details of the discussion, what follows below were a few of my thoughts as to why he had it wrong.
* The main impetus for Tuesday's rally was a volatile combination of free money from the FED and other central bank interventions in the market. From my friends stunned silence I knew I had to explain.
* The Japanese central bank (BOJ) intervened again in the Forex markets to buy US dollars and sell the Yen. It didn't work longer than a few hours and then the US dollar tanked, which was cheered on Wall Street.
* Yes, the banksters on Fraud Street and at the FED want you to lose your purchasing power in favor of the their assets increasing.
* Additionally, the BOJ said that it will expand its asset purchases to outright purchases of REITs, equities, corporate bonds, and land.
* Fraud Street cheered this which led to immediate talk of the US Federal Reserve doing the same. Of course, this is happening in another way now...via POMO.
* In more steps to give banksters money to jack up the market, the FED was buying Treasuries from the banksters via its POMO operations, which led to massive equity purchases. When the POMO buying spree ended Tuesday, the majority of the rally ended with it. After a 90-min lull in the market, the S&P was only able to extend its gains an additional 3.50 points. Without the FED manipulating the market, it's dead.
* The non-Manufacturing ISM data was better than expected and certainly helped the rally, but by itself wasn't even close to offsetting the recent avalanche of bad economic data.
* The FED was manipulating the market again Wednesday. As soon as the FED was done buying, the S&P sank to the lows of the day and never returned. Without the FED manipulating the market, it's dead.
* Ireland was downgraded again Wednesday.
* Greece was audited and found to STILL be lying about its colossal debt. More problems from Europe are coming.
* Food stamp welfare is at a new record.
* Unemployment remains at nearly 10%.
* Wednesday's private payroll estimate was shockingly worse than expected.
* The IMF slashed U.S. GDP growth rates.
* QE2 by the FED is all but guaranteed and will increase the money supply by at least 50%, or $1 trillion. Some are calling for an additional $7 trillion of asset purchases, which should make the banksters quite happy indeed. You? Not so much. It may be a nightmare.
All of this nonsense has led to very difficult trading. Every day is a series of "Starts & Stops," Tuesday being no exception!
* The majority of Tuesday's gains came on Globex, thus I didn't trade it. My friend "sort of" got it, so I'll move on.
* Once open, the market chopped up and down for nearly an hour with the latter portion of the congestion ending up.
* At the higher level, the S&P traded within a narrow 2.00 point range for an hour.
* At a slightly higher level, the S&P again traded within a narrow range of just 2.00 points for another (nearly) TWO HOURS.
* At another slightly higher level the S&P again traded within another ridiculously small range of just 2.00 points for yet another TWO HOURS. It actually got worse from there...then the so-called "great" day was over.
* Wednesday was just as bad, with a total range far less than even ten points.
* Almost every day is a series of "Starts & Stops" thanks to the Fed.
Because the Fed and Backstop-Ben are will to "backstop" every financial risk in the world, there is no need to worry about any...ANY...of the news mentioned above.
Previous Day's Trading Room Results:
Trade Date: 10/6/10
E-Mini S&P Trades*
(before fees and commissions):
1) VA sell @ 8:32am at 1156.00 = -1.00 (1)
2) Algorithm positions (3)
3) “Reading the Tape” positions (3) combined Secret’s, Algo, & “Reading the Tape” total… -2.00
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