Friday, October 28, 2011

A Bullish Month For The Ages

October of 2011 will make the record books as the best October since 1974. It was the best month period since 1987. It was so good that the major US indices are now back in positive territory. Just think, only a month ago we were flirting with bear market territory! Wow! What a difference one month will make! What a difference the PPT will make.
The chart below is this wondrous month of October with 60-minute bars. Obviously the PPT started this rally, as they start all rallies, with the incredible 40-minute, 400-point Dow surge on October 4 as highlighted by the blue rectangle. Like almost all PPT rallies, this one burst forth in the final trading hour of the day. The rest of the month went as the Fed planned. Up, up, up. Yippee!
During the month, many companies reported better earnings than analysts had predicted. The big banks boosted earnings largely from their debt issuance declining in value. Yes, that’s right. In the con game that is our stock market and economy banks are allowed to book declining debt values as earnings. Lowes is closing 20 stores and laying off 2,000. Walmart is dropping health care for new hires and raising premiums for the rest of their employees. Americans are still spending but the latest data indicates they are spending their paltry savings. Whirlpool said demand for their products were at ‘recessionary’ levels. Yet, the US propaganda mouthpieces did their job and reported that all was well. Never mind that Whirlpool makes durable goods but those orders increased. Of course, we had to back out transport and auto production to get a positive number but that’s how the game is played. 
Third quarter GDP was estimated to be 2.5%. New claims for unemployment benefits was just a paltry 400,000. Everything is peachy. 
The big news of the month was of course the solution to the Greek debt crisis announced on Thursday, October 27. The solution of course was to create a fund of some $1.4 trillion dollars with which to issue new debt. Where would the $1.4 trillion come from, the media asked. They are all so stupid. We know where it will come from. Bend over people. The banks need another bailout. Anyway, that news was good for a 330-point Dow rally. The month of October was fantastic. Happy days are here again. The stock market is celebrating. Investors are once again saved by central bank intervention. What could be better? Freedom? Capitalism? Dignity? 
Nah. We can’t operate under capitalism. Big banks would surely fail. Besides, central bank intervention and manipulation draw such pretty charts. Behold for posterity the wondrous month of October. Oh, don’t forget to send Bernanke a ‘Thank You’ card!

DJIA - Month of October ending 10/28/11, 60-min bars
Chart courtesy
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.

No comments:

Post a Comment