Friday, March 2, 2012

Scared To Sell, Scared To Buy

This past week started with a 10-minute plunge of more than 80 Dow points. That was countered with an immediate buying effort that erased the drop before the lunch break. From there, the indexes basically wallowed for the rest of the week just beneath the Dow 13000 mark. On Tuesday, the Dow did close above 13000 but immediately lost that mark when trading started on Wednesday. It seems that the casino players are trying to figure out whether or not they want to blow the bubble higher. Who knows what to make of the economic data. We are dealing with a regime completely incapable of telling the truth about anything. But, there is evidence of some slowing of economic activity of recent weeks. But, while durable goods orders slowed the most in 3 years, the regime continued to report an expanding manufacturing sector. While the Post Office reported plans to lay off 35,000 workers, the regime continued to report fewer jobless claims.
Europe, meanwhile, continues to be a basket case. The EU leaders agreed to throw another $130 billion to the banks holding Greek debt as long as Greece agreed to live in a depression imposed by spending cuts. Of course, Greece can’t pay off their debts and the world is experiencing temporary lucidity. If Greece can’t pay, banks will soon fail and other nations like Spain will soon follow in the cascade of debt collapse. The central banks will continue to exercise bailouts because the money they are using is not their own. The end result is the economy of the EU looks a bit thin. 
With the two biggest economies in the world simply treading water at best, stocks have taken  a breather. Investors are trying to test the Dow 13000 mark but remain scared to buy stocks higher because the economy just does not support the price. On the other hand, given the ferocity of the Fed’s counter punches to push the market higher, investors are also scared to really sell stocks with conviction. If they sell, they do so in short bursts knowing that the Fed’s PPT stands ready to bury them. In addition, Fed Chairman Bernanke had to participate in a two-day babbling before the idiots of Congress known as the Humphrey-Hawkins testimony so he was likely too busy to man the controls of the stock casino manipulation. But, he is free next week and 13000 awaits.

DJIA - Intraday, 10-minute bars, 02/27/12 - 03/02/12
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.

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