War is ugly. War is brutal. War is hell. War is about creating carnage and withstanding carnage. Yes, sure - the military is all about war. Citizens around the world are waging war on their governments of deception. God only knows what is happening in Libya right now. Luckily for citizens of other countries in turmoil their governments are heavily in debt and therefore have spawned credit default swaps on banker balance sheets. Their governments can’t lay waste to the protesters because banker profits would be imperiled. Libya has no debt, no swaps, and no banker restrictions. A bloody battle will be allowed there. All that aside, the real war is for control of the stock market.
Let’s take a look at how this past week played out. The first chart is a look at the DIA for the past five days with ten-minute bars. This is picture of war. There is enough doubt about the phony economic ‘recovery’ to go along with a market that has gone almost straight up since Bernanke’s QE2 announcement on September 1, 2010 to prompt some investors to sell off some of their holdings in the market. Not to mention, riots throughout the world have focused on the cruel effects of central banker inflation and the lie of the pension. (See my previous article on pensions at: http://bmfinvest.blogspot.com/p/pension-lies-lead-to-riots.html) There are indeed good reasons to take money off the table and hide. Central banker inflation has pushed oil prices over $100 per barrel and food prices threaten to put the world on a forced diet. The real fear might be that adjusted for inflation, food components are generally no where near their all-time highs and neither is oil. Inflation may have just now kicked in! But we know the rules of the grand ruler, Mr. Bernanke - DO NOT SELL! Let’s look at the chart.
Monday muddled around. On Tuesday, sellers hammered the Dow down over 200 points with the selling continuing into Wednesday. Ruler Ben, you see, was sitting in front of the Village Idiots we call ‘Congress’ babbling and lying about who knows what. Why watch, right? Does anyone think he is going to tell the truth about anything? Does anyone think he has a clue about anything? Look at his record of prognostication over the past seven years or so. As mounting debt continued to drown the economy, he kept telling us all to enjoy the snorkeling. As we all know, when Bubbles Ben is away from the printing press, the markets sag. Indeed they did. He wrapped up his musings of insanity on Wednesday and was back at the controls on Thursday morning. And guess what? All the sellers from the previous two days were instantly buried with a furious buying spree fueled by..., well..., I’m sure there was some sort of ebullient ‘recovery’ news out in the morning. As we can see from the volume at the bottom of the chart, it was heavy. So Thursday finished with a the best single day gain in months. What a surprise! Mr. B must have slept in on Friday morning because sellers emerged right from the get-go and the Dow suffered a loss of about 180 points by midday. Of course, by now, we all know what happens on Friday afternoons when trading and traders are thought to thin out for the weekend. With the Dow down 180 points and the week threatening to go negative, we could hear the trumpets blaring. Ta-da, da, ta, da-da! Here they come, ladies and gentlemen. Let’s welcome the Plunge Protection Team!!Yes indeed. At their usual hour, 3:30 PM, they went to work. With a volume pattern and trading pattern eerily similar to Thursday morning’s jolt, the Dow enjoyed a 30-minute rally that gave it a positive slant for the week. Yippee! Saved again by the PPT! Yes, these are the same idiots that think they can terminate QE2 in June and have the market stand on its own. Stupid knows no depth. Let’s see if they continue the rally on Monday! With the heaviest volume of the week coming in during the final 30 minutes, I would think the PPT is determined to rally-ho!
Chart 1 - 02/28/11 - 03/04/11 Intraday 10-min bars DIA
Chart courtesy StockCharts.com
I mentioned that oil finished the week over $100 per barrel. Here is a chart of the OIL ETN for the same time period as the above chart. Yes, I know that Bernanke testified that inflation was still a no-show but this is a man that challenges Cain in the book of Genesis for the biggest lies ever told. Or, he is the stupidest person ever to walk the earth. In either case, he should not be controlling our country. But he is. Oil is a reflection of his handiwork. I am not going to belabor the point so what I wanted to point out was the final ten minutes of trading. Look at the volume at the bottom. For the day, the OIL traded 2.8 million shares. It traded 600k in the final 10 minutes of the day! Do you think traders were loading up on oil anticipating a nasty weekend of war across the planet? Bernanke and the central banks are waging war against would-be sellers of stock. It isn’t pretty. Selling is a losing proposition when the opponent has a printing press and a trading account at the NYSE. Let me leave you with one more thought. The ECB is talking about raising rates for the Euro next month. That action would likely further depress the value of the US dollar and in turn, increase the price of crude. Do what you will with that thought. But in the last 10 minutes of trading, a lot of traders have already decided what they want to do. War isn’t pretty. We just need to win.
Chart 2 - 02/28/11 - 03/04/11 Intraday 10-min bars OIL
Chart courtesy StockCharts.com
Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. Advisory services offered through BMF Investments, Inc.