Friday, June 15, 2012

Stock Speculation Surfing

Tuesday, June 12, 2012.
The backdrop.
Family net worth down nearly 40% between 2007 and 2010.
Spanish bond yields rise to euro-era high with the 10-year rising to 6.8%.
Ratings service Fitch cuts 18 Spanish banks.
Fitch also expects Spain to be in a recession through 2013.
9:30 AM - Dow futures close up 70 points.
10:10 AM - Indices lose early gains. Dow up 10. Other indices now in red.
10:15AM - The Fed’s POMO stock price manipulation activities commence.
11:00AM - The Fed’s POMO stock price manipulation activities conclude. Dow up 100 points. All indices higher all over the world. 
11:08AM - Headline: ‘Surging Spanish Bond Yields Push Europe Lower’.
11:11AM - Headline: ‘Europe stocks climb, Stoxx 600 up 0.4% to 242.99’.
Other than the usual central banker upward index manipulation activity, what could spur on such an explosive 100-point, thirty-minute rally in the Dow? To define, my own definition of a Plunge Protection Team rally is a rise in the Dow at a rate of 200 points per hour. 100 points in thirty minutes certainly qualifies this mid-morning rally under suspicious circumstances presented by weak economics and a deteriorating situation in Europe. But the Fed gooses the Dow higher every morning starting at 10:30. Check the charts. Surely they solicit the assistance of their shills, Wall Street and the so-called ‘media’? Ah, there it is. 
11:37AM - Headline: ‘US stocks rise on hopes for stimulus.’
Hope. Merriam-Webster defines hope thusly. ‘To cherish a desire with anticipation’. The same dictionary defines stimulus thusly. ‘Something that rouses or incites to activity’. In other words, Wall Street desires a stock rally so they are anticipating central banker stimulus to incite that rally. Einstein defined insanity as doing the same thing over and over again and expecting different results. Since banker bailouts have been issued all over the world since 2007 on an almost monthly basis, has anything really improved? Bailout economies like the US and the EU are still broke and both continue to expand indebtedness. Europe is in a complete mess with large members and small members alike teetering on insolvency and default. The US has continued to amass trillions in indebtedness that it cannot repay. The average citizen in Greece, Spain, Ireland, Brazil, or the US is losing ground. Yet, Wall Street expects another Federal Reserve stimulus package to finally turn the economy. Is it really going to be different this time? Or, is this true insanity?
Don’t get me wrong. I completely agree that the Fed will furtively filch more assets from the profoundly ignorant citizens who entrust their protection to the profoundly incompetent, treasonous, and mendacious body known as congress. Little do the people understand that their representatives have aligned their allegiance with the banksters who are busy fashioning the yoke of indebted enslavement to control their subjects. So yes, there will be another stimulus plan that will no doubt be announced sometime early this summer. In the meantime, the rumor of such a plan will intoxicate Wall Street every Tuesday morning with rallies built on fantasy and insanity only to give way to the sober idea of reality on Thursday afternoon. So thanks to the central bankers, the idea of ‘investing’ in stock indices is akin to ‘investing’ in where the ball may land on a roulette wheel. Need we even discuss suitability?
What we have now is akin to yelling ‘Fire’ in a crowded movie theatre. That’s how stampedes are created. Only now, when a rally is needed, someone yells ‘Stimulus’ on Wall Street. Everything is legal now and the rally is the only thing that matters. Apparently the economy has become so desperate that any act is accepted as long as there is a rally. But don’t get too excited. 
The chart below shows the day of 6/12/12 in five-minute bars with the Dow in candlestick and the EWP in orange. Clearly we can see the powerful triple-digit rally in the Dow over a forty-five minute morning time period. What caused the rally? Certainly the Fed gooses the indices every morning at their prescribed 10:30AM manipulation hour. But also, the magic word of ‘stimulus’ was injected into the trading no doubt from the people that benefit most from a faux rally - Wall Street. Okay, so the indices are a complete fraud and con. But what is the orange line on the chart? This is why we can’t get too excited. The orange line is the EWP - the Spanish ETF. Hey, I told you it was a fraud and a con! Why on God’s green Earth would the Spanish ETF rise on a day they succumbed to a $100 billion in bankster bailout money with their economy contracting 8% and an unemployment rate of 25% and no hope of future prosperity? What am I saying? None of that matters. ‘STIMULUS IS COMING. STIMULUS IS COMING!!!!Combined with a little Fed intervention, poof, a triple digit rally starts. Beware of the con. Commit this chart to memory. Whatever happens over the coming weekend in Greece with their ‘elections’ almost doesn’t matter. If pro-bailout candidates are elected, then the banksters get a bailout. If anti-bailout candidates are elected, the banksters get a bailout. ‘STIMULUS IS COMING! STIMULUS IS COMING!’ Not that it will work to improve the economy. But that matters not. The ‘stimulus’ is really for the stock indexes and not the people of the land. If you want to cause a stampede out of a movie theatre, just yell, ‘Fire!’. If you want to cause a stock rally stampede, just yell, ‘Stimulus!’ Central banksters are charging up their bullhorns. 

DJIA in candlestick, EWP in orange - 5-minute bars 6/12/12 
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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