A new week - same old story. The stock market remains a slave to the US dollar. Yes, the US government continues to borrow and print. The Treasury issued another $118 billion in debt this week. That should sink the dollar but this is a different era. The banking cartel that has taken the world captive has to continue the illusion of debt acceptance so they buy dollars to buy the debt issuance. That serves to boost the dollar's value. Secondly, the banking cartel has to continuously deal in derivatives because that's the only instrument that earns them money. Derivatives require credit default swaps which in turn require an underlying asset which is usually US Treasuries. Therefore, Treasuries are in demand and so too is the dollar. All of this is necessary to continue the illusion of wealth and economic 'recovery'. Stupid people are easily fooled and can't spell 'debt' much less understand its destructive effects. So, the game goes on.
In addition, the dollar continues to strengthen due to the weakened state of various government states throughout the world. Greece is the latest country drowning in debt and extending a hand for a bailout. So, the dollar strengthened this week.
When the dollar strengthens, the stock markets fall. Why? Because the market is a function of dollar inflation. It is also a function of manipulation. When the manipulators are busy manipulating bonds, they don't have time to simultaneously manipulate stocks as well. Sadly, the Plunge Protection Team (PPT) launched a brief attempt to spike the markets on Wednesday. The Fed announced a commitment to zero percent Fed Funds forever given the supposed strength of the economy. You know the gag. The Commerce Dept. claims a 5.7% GDP growth rate for the fourth quarter. Turns out that nobody on the planet actually believes this number including the Fed. Thus, they left rates at zero on Wednesday. The market swooned. Given that they coordinated and anticipated this reaction, the markets went from fifty points down to fifty points up in a jiffy. Another brief selloff was met with another burst of buying. When I say 'markets', I mean markets. At 2:30 PM eastern time, ALL MARKETS began and ascent. The Dow. The Nasdaq. Germany. Brazil. China Australia. Antarctica. Jupiter. Pluto. Everything leaped higher all at precisely the same moment at precisely the same ascent. Pathetic. Check out the chart below.
Thursday morning was met with harsh selling that was again arrested by weak buying. Friday brought the trap door and the markets fell in the afternoon with heavy volume. There were many theories as for why all economic and corporate earnings news was good and the market action was bad. Perhaps some of the markets weakness was spurred from the Congressional investigation into the methodology of saving of insurance giant AIG. Congressman Twiddle Dee and Congressman Tweedle Dum question current and past Treasury Secretaries. I thought I already made this clear. AIG was saved so former Treas. Sec. Paulson could save his $500 million dollar golden parachute with former employer, Goldman Sachs. As you remember, Goldman would likely have been pushing up daisies had AIG expired. The same fate would have befelled poor Mr. Paulson's pension. Ditto for his buddies at Goldman. So, the greatest heist in human history was carried out right under the nose of Nancy Pelosi and George Bush. It was all for our benefit, of course. So too is the resulting $12.3 trillion in debt no doubt. The bailout was never about economic recovery. TRUTH.
Bottom line is this. The dollar looks poised to rise and the markets look poised to fall.
DIA - 15 minute bars - 1/25/10 thru 1/29/10
Chart courtesy StockCharts.com