A new year has begun! 2011 is behind us and a fresh new year awaits. But alas, the new year has started off as the previous year ended. The Dow Jones Industrial Average lost some 110 points in the first week of January for a half-percent decline. But wait, I have deceived you. So too has the stock casino. So too has the media. Everyone is a liar and the US of A is in a race to become the lyingest nation ever conceived. Hey, don’t get pissed off at me. I’m only the explorer of truth in a nation of absolute deceit. Strap on your hip wadders and hold your nose. We are about to venture in to the cesspool of lying.
First of all, I lied about the Dow being down in the first week in January. Well, sort of. The thing is, if we don’t count the first thirty minutes of trading on the first trading day of the month (Monday was the holiday for New Year’s Day), the Dow was down. From 10 AM Monday morning, the Dow lost 110 points on the week. However, the Dow gapped higher as soon as the trading began and jumped 200 points higher in the first five minutes. Two more five minute trading periods and the Dow was up 250 points at 10 AM. From there, the index lost ground for the rest of the week. Of course, the same powers that pushed the Dow higher out of the gate also made sure not to let the index go negative for the week. So the Dow finished the week up .8%. Is that a ‘weekly rally’? The media is going to report it as such.
Of course, readers come to this blog for truth and reality. The truth is that in a four day trading week, there are 1,560 minutes of trading on the NYSE. So basically, 30 minutes were up and 1,530 minutes were down. The 30 minutes up tallied about 250 Dow points and the 1,530 minutes down tallied about 110 Dow points. The positive 140 points came in 15 minutes of trading. This is the new stock casino. Gains come in microbursts and the microbursts are sold as ‘rallies’. Here is what we need to learn.
To take advantage of the ‘weekly rally’, investors had to position themselves in the Dow stocks on December 31, 2011. Otherwise, they had no chance to catch the rally at the open as the indices gapped higher right at the 9:30 AM open.
Investors looking to join the rally after 10 AM on Tuesday were fed to the sharks and suffered a .5% loss for the week.
The culprit of the rally and the culprit of the casino demise were one in the same. The US dollar weakened early on Tuesday morning only to experience an appreciation throughout the rest of the week. Dollar up, Dow down. Dollar down, Down up. The rules of the casino are simple. The winner in Blackjack holds the hand closest to 21 without going over and the winner at roulette places their chips on the corresponding number in which the ball lands.
The winner is predetermined.
As witnessed from the first five minutes of trading on Tuesday morning, a lot of volume hit the Dow. Someone wanted the Dow higher at any cost. Let’s just call the someone the Federal Reserve. They now completely own the stock casino and are solely responsible for its trend.
99% of what the babbling idiots on the financial networks babble about all during the day is just noise. It means nothing.
The vast majority of investors have absolutely no clue that the horse they are riding is a mechanical horse outside a grocery store. They think by a snap or a tug on the reins the horse will speed up or slow down. Listen up. The horse will stop when the time on the quarter runs out! Get off. The ride is over. It’s not a real horse!!!
When the idiots in the media talk about ‘weekly’ rallies, they are really referring to five minute pops orchestrated by the Fed. Reporters are simply repeaters. None of them know anything and the truth would make their heads explode!
The Dow closed Friday with a loss even after the gobberment said unemployment came down to 8.5% as the economy added 200,000 jobs. Yeah, yeah, yeah. Of course it did. Would you like to know what he job picture looks like next month? Sure, it will add another 250.000 or so and unemployment will be 8.4%. How do I know? I have seen the movie before where all the citizens were rounded up and put on box cars. Yeah, yeah, yeah. Lunch will be served on the trip and a movie will be shown. Disneyworld? Yeah, that’s right - we’re all going to Disneyworld!
Behold, the chart does not lie. Below is the chart of the Dow for the first week of January, 2012 in five-minute bars. Notice the 200-point spike in the first five minutes of trading with the heaviest volume of the entire week. When Ben wants a rally, he gets one. The trick for investors is to have their money sitting in stocks waiting for the next five minutes of Federal Reserve rally. Good luck. The roulette wheel is already spinning. Ben will put his finger on the wheel when he is ready to declare a winner! Some people call this a rally. A more honest assessment is that the deception will continue five minutes at a time. Does this chart really look like a rally?
DJIA - 01/03/12 thru 01/06/12 intraday five-minute bars
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.