Thursday, February 8, 2018

What Is Stock Market Volatility Telling Us Now?

02/8/18

In my last article, ‘Plunge Protection Team Spotted Atop Mt. Everest’ - 02/02/18,  I warned readers that the Plunge Protection Team was again active. I posted the article on my blog www.bmfinvest.blogspot.com. This article was published as well on the site www.marketoracle.co.uk and almost nowhere else. Let me say ‘kudos’ to the marketoracle.co.uk publisher Nadeem Walayat for not only having the guts to publish the truth but also the expertise to understand what is happening. I start everyday with a thorough reading of the articles published on marketoracle.co.uk as it is one of the few sites where writers like myself are given a forum. Almost all the other supposed ‘investment’ sites are filled with powder puff CNBC kind of stuff. I can assure readers that if they are not reading articles posted on marketoracle.co.uk, they are not getting a complete idea of important information.

Funny, there has been a lot written this week on ‘what happened to volatility?’ Really? I thought I explained this a week ago. I presented a chart showing pretty clear PPT intervention in equity markets as early as a full week ago. Why are so many so late to the party? Now, a week later, some writers are ‘musing’ about the PPT and their interference in equity markets. I can assure readers that we have all seen this movie before. Whenever stock prices look ready to crumble, the PPT steps in to rig prices higher. One would have to be a complete ignoramus to believe we all live in freedom or that capitalism exists. 

Why is the activity of the PPT important? Because the PPT IS the ‘market’. The PPT IS the ultimate put option. Whenever they pop out, it tells us that index prices are failing. Why this week?

Fed Chair Yellen ended her term and Fed Chair Powell took over. As I have written over and over. whenever the Fed Chair is away from the ‘call option’ button at the New York Fed, stock prices fall. No doubt Mr. Powell spent Tuesday in orientation and stocks sure enough fell.

Of course, there are many reasons to sell stocks now. Valuations are ridiculous and sellers have not been allowed to sell for many years. Thus, we now live in a bubble. As President Trump said prior to election, “…one big, fat bubble”. The Fed has been pushing interest rates higher. Pop! A country $21 trillion in debt cannot afford higher interest rates.

At any rate, look at the chart below for a 3-day, 30-minute interval chart for Tuesday through Thursday of this week. Again, I circled the PPT activity as we can see several near-thousand point reversals from persistent selling nadirs. Also note the heavy volume associated with these powerful moves higher. I worked as an investment adviser for the past twenty years and I can assure readers that these sudden and violent reversals from selling to buying are not the work of investors. Whenever stock prices plunge, investors never call to say, ‘Things look cheap - let’s buy’. No body. No one. Never, ever, never. Not once. Ever. This is the work of the central bank. Why? The money they use is not theirs. They steal it from us. They have no risk.

Everyone wants to know. How do they do it. Call options. As anyone trying to trade on Tuesday morning will tell you, all systems were down to a crawl. TD Ameritrade in particular was quite impossible. What does this tell us? It tells us that somebody was pushing so many call options into the system that the little guys were locked out. High frequency trading allows the criminals to hijack the system with massive call orders, most of which they quickly cancel to hide their tracks, to jam prices higher. See the chart below. It speaks for itself for those who want to listen.



DJIA - 3-day, 30-minute interval 2/6/18 - 2/7/18
Chart courtesy StockCharts.com

Violent stock price movement is attributed to ‘volatility’. The ‘volatility’ index is known as the VIX. Actually, the value of the VIX is determined by the expense to own put options. As the next chart will show, stocks have been going straight up for some 15 months without even a single monthly loss. The VIX has set all-time lows. There has been no reason to own puts. Now there is. Now ‘volatility’ is moving higher.

So how did we get here? The next chart below is a 2-year monthly look at the Dow Jones Industrial average. I enclosed President Obama’s last year in blue and President Trump’s first year in red. Clearly we can see that stock prices were fading and getting ready to tank with the prospect of Criminal Clinton becoming president. Stock price performance in President Obama’s years was actually quite pathetic considering the Federal Reserve and the PPT unleashed bailout after bailout and QE after QE to boost prices. Political policies were not helpful.


DJIA - 2-year monthly
Chart courtesy StockCharts.com

Then, literally as soon as it was apparent that Mr. Trump had won the Presidency, stock prices vaulted higher. Given the monthly chart, stock indices have yet to experience but a single negative month in President Trump’s tenure thus far. Until now.

PPT and central bank intervention have been a world-wide phenomena for years now. Like steroids, interventions work. Like steroids, there can be adverse consequences. Bubbles eventually pop. Whenever we see evidence of PPT activity, we know the bubble is bursting. Readers have now been warned. Now take a look at the chart. Given that the Fed has apparently drawn a line in the sand at Dow 24000 or so, does anyone expect stock prices to continue to fall on Friday? I myself would be very surprised if we don’t see vociferous buying coming from the PPT.

Before I leave the second chart, I must admit Senator Shumer was right when he said the remarkable bull run in stock prices over the last year was not to be credited to President Trump but rather former President Obama. Senator Shumer was right. All Mr. Obama had to do was step down and get out of the way. And, most importantly for stock prices, Ms. Clinton was defeated in her bid for the presidency.

Without trying to be too lengthy, let me leave readers with an example of how corrupt the american system is.

Duke Energy is one of the largest energy providers in the US and they serve us here in the US Southern states. As we say down here, ‘American by birth and Southern by the grace of God!’ Anyway, Duke has recently been fined $102 million dollars for polluting ground water with coal ash. The company said they will clean things up and pass the cost on to customers. The little guy gets screwed and nobody cares.

Now, check this out next time readers want to cross their heart and praise the flag of the country that used to be America.

Several years ago Duke’s very own engineers suspected some of their pipes used to disburse the pollution were having problems. They requested $20k to inspect these pipes. The company turned down their request. The pipes burst and the pollution occurred. Duke even pled guilty in court admitting their fault. Get your barf bag handy.

In April of 2015, the company announced a $1.5 billion dollar stock buyback program. They would buy the stock from formally broke bankers Goldman Sachs and JP Morgan. Given that both banks were bankrupt ten years ago, where did they get money to acquire $1.5 billion dollars worth of Duke Energy stock? From us, fool!

It gets worse. The CEO of Duke makes $13.4 million per year and $9 million of that last year was Duke stock. The top five Duke execs make some $28 million per year. The company estimates if they have to clean up all their spills, it might cost some $10 billion. Given that the company pays enormous salaries to those who prevent inspections of potential pollution events, and given that the company can spend billions to buy back stock, paying hundreds of thousands in commissions to criminal banksters, just so they can drive the price of Duke stock up and get rich, and then stick the cost of higher stock prices and pollution clean up to their customers, one can conclude that all that matters in america is higher stock prices.

Thus, the PPT rides to the rescue of rich investors who only buy and never sell.




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.

Friday, February 2, 2018

Plunge Protection Team Spotted Atop Mount Everest!

02/2/18

Many market observers would agree that the current stock market is either in a bubble or at least richly valued by historical standards. Not that it matters. The Dow’s ascent looks like Mount Everest complete with a lack of oxygen at the top. All that has mattered when it comes to stocks for thirty years now is the Federal Reserve and their ‘Plunge Protection Team (PPT)’ activities.

When stocks needed a boost, they were there to buy market indices back up when no one else would dare. Since the election of President Donald Trump, market indices have been moving straight up. The PPT has not been needed. There have been no sell-offs. That is, until the very end of January, 2018. Even then, the Dow dipped just a couple of percentage points.

Why? As I mentioned, everyone agrees the current market is a bit pricey or perhaps even bubbly. Maybe the stock indices are due for a pullback. But mainly, investors are gauging the Fed’s anticipated moves. The Fed is raising their fed funds interest rates and in turn, the US 10-year Treasury yield has risen to over 2.7%. That doesn’t sound like much but yields haven’t been this high in four years and the stock plunge of ’08 was triggered in part by yields in the upper 4% range. One or two more bumps from the Fed and US 10-year Treasuries might well yield north of 3%. Since we have been living in an economy propagated by near-free money, maybe a rising cost trajectory of money will trigger the next bear in stocks? The future of stock indices really is in the hands of the Fed.

So we finally got not one but two days of selling in the US stock indices largely due to Fed worries. Alas, the Fed met on January 31 and took no action.

Selling intensified after the Fed’s announcement on the 31st and then the clock struck 3PM. And out they popped. I could hear the sirens sounding the alarm from my office! Suddenly, from nowhere, buying programs kicked in. On Donar and Blitzen and…, oh wait a minute -that’s a different Santa Claus! I personally measure PPT activity when the Dow experiences at least a 100-point upside move in an hour. By the end of the trading day, the Dow had recovered nearly half of the days 300-plus point intraday loss. All in less than an hour!

The green circles on the chart below show suspect buying activity that is likely PPT action as previously defined. The next morning (February 1) Dow futures were down over 200 points. Ding-a-ling-ling the Dow opened for trading. The next
green circle shows a quick 200 point recovery in about thirty minutes. Yeah, that’s normal. A little more selling pushed the Dow lower and then a third PPT program kicked in. More selling threatened to send the Dow down for the day but that was not allowed. The fourth green circle shows an end-of-the-day buying spree reminiscent of the previous day. This is a 10-minute interval chart so check out the trading volume at the bottom bar particularly at the end of the day Feb. 1.



DJIA - 2-day, 10-minute interval 1/31/18 - 2/1/18
Chart courtesy StockCharts.com

What does this tell us? What does the Fed want us to believe?

One - Even though Dow valuations are very high, the Fed does not care if they are standing atop Mount Everest. They are going to grow the mountain higher. All they care about is their evil luciferian control over all of us.

Two - The Fed is willing to support stock prices as they raise interest rates.

Three - The Fed is perfectly willing to blow bubbles as long as they get to search all partiers for sharp objects.

Four - The mood suddenly feels like early 2009 again as the Fed signals for us to don the oxygen masks. We are about to do some climbing. They will not let us fall.

Five - The Fed now realizes that the party is almost over. They must once again assume full control of stock price direction.

Six - A fall from atop Mount Everest will certainly result in death.

We may have a million good reasons to sell stocks and wait for the crash, but we only need one good reason to ignore risks and buy our brains out. That is, we can see the PPT standing atop Mount Everest with buy orders in their hand. But is this action prudent and will the Fed again find success?

If the Fed fails now, we are likely going to experience a very different world on the other side of the QE - PPT door.



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.

Bio:
Barry M. Ferguson is a former investment adviser and President and founder of BMF Investments, Inc. He has authored the books, Navigating the Mind Fields of Investing Money and Pulpit of Power, lectured on investing, and contributes investment articles to various professional publications. He was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.
Copyright © 2018 BMF Investments, Inc. - All Rights Reserved

Tuesday, January 2, 2018

“The lie is the rock on which this republic rests.”

12/30/17

I stole this quote from Andrew Jackson whose actual quote was, “The Bible is the rock on which this republic rests.” Of course, the United States is not the country, or republic, that is was when the extraordinary genius of Andrew Jackson graced the presidency. Jackson also once said, “One man with courage makes a majority.” With that courage, President Jackson exterminated the plague of a central bank, balanced the country’s budget, and left the US taxpayers owing no debt to anyone on the planet. Without Jackson’s courage, the country has been growing debt since he left office in 1836. Plantation slavery has been replaced with debt slavery and sovereign rule has been replaced by bankster domination. We can only pray, ‘Please Lord, send us another leader with Jackson-like courage’.

I believe courage is built upon truth. Read Jackson’s veto of Congressional approval of the central bank of his time. When President Jackson purged the central bank, he also stopped inflation cold. The result was the greatest economic expansion in human history. Then, President Woodrow Wilson, the worst leader in human history, resuscitated the central bank with the Federal Reserve Act of 1913. Jackson knew the truth. Wilson was a viper.

From Jackson’s central bank veto:

“It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.”

Preach it, President Jackson!!

From the same veto:

“If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy.”

Truth. It’s a rare commodity these days. Genius is even rarer.

What has happened to America?

Thomas Paine, author of Common Sense in 1776, once said, ”He who dares not offend cannot be honest”.

Truth is often offensive. Today, all americans seem to be offended by something. Ergo, they cannot hear the truth. Thus, their government will not tell them the truth.

President Jackson believed that the Holy Bible was the rock on which the republic rested. The Bible adhered to truth. For those wishing absolute control, the truth can be an impediment to power. Witness the following from an excellent article in Smithsonian magazine, November 2017.

It is winter in America and therefore the flu season is upon us. Few are alive today to recall the flu pandemic of 1918. However, the flu virus of 1918 was particularly lethal. The afore mentioned President Wilson had introduced the US into World War I at the behest of the newly established Federal Reserve Bank. Lending in war times is good for bank profits. Then the flu pandemic began to spread. Needing troops for war carnage and population control, needing to keep Americans focused on a German enemy, President Wilson could not afford to let the flu disrupt his plans. Besides, the US citizenry had the FDA (Food and Drug Administration) to look after their health and welfare. (Readers can’t see me right now but my head is cocked to one side and I am winking rapidly with one eye while sporting a maniacal smile of sarcasm.) In truth, the American government doesn’t do anything for the welfare of its citizens. Like all departments of government, the FDA is a sham and a shill for big pharma.

To put this story in perspective, the flu pandemic of 1918 killed more people than those who were killed in WWI and WWII combined.

What did the US government do? It did what it always does. It lied. The government lying machine kicked into high gear led by the so-called health professionals. The author of the story I am citing, John M. Barry, put it beautifully.

“What proved even more deadly was the government policy toward the truth.” President Wilson created the Committee on Public Information. Wilson was influenced by an adviser who wrote, “Truth and falsehood are arbitrary terms…The force of an idea lies in its inspirational value. It matters very little if it is true or false.”

Wilson then passed the Sedition Act making it unlawful to ‘utter, print, write or publish any disloyal, profane, scurrilous, or abusive language about the form of government of the Untied States’ or to do anything to hurt the US war effort. The government urged citizens to report other citizens ‘who spread pessimistic stories, cries for peace, or belittles our effort to win the war’. The penalty? 20 years in prison. No, I swear this is not Nazi Germany I am writing about. It is the United Banks of America. Uh, I mean, uh, the United States of America.

In other words, it is the official policy of the Untied States government to pathologically lie to the american people about everything. President Obama was particularly adept at this. Jimmy Carter was elected President in 1980 after famously staring into the TV cameras in a speech to the American people, “I will never lie to you.” But America IS a lie. The government IS a liar by law. The government employees media minders like CNN to constantly lie to the public. 

As the flu pandemic progressed in 1918, public health officials obliged the government. They reported no fatalities and told the public there was nothing to be concerned about. Yet, 60 million people died from the pandemic. You know, kind of like what happened a few months ago in Las Vegas with 56 people getting murdered and over 500 getting wounded in a concert venue mass shooting covered up by the FBI and CIA. Nothing to see here. No worries. One guy did it all. He’s dead now. We even erased his ’13’ tattoo on his neck. Yeah, sure.

The flu virus of 1918 killed an estimated 60 million people worldwide including Frederick Trump, President Trump’s Grandfather. What did the US government do? It lied to the american people. What did health officials do? They lied to the american people. What rock is the republic now resting? The lie. 

What is the FDA doing today concerning the opioid crises, marijuana, electronic cigarettes, and everything else? They lie. Why? Lying is big business for big pharma. The FDA does not represent the people. The FDA is a stooge for big pharma. Flu season is here and what does the lying vermin of government do? They encourage all of us to get a ‘flu vaccine’.  Why? Because the flu vaccine is a multi-billion dollar business for big pharma. Yet, truthful medical professionals will admit that the vaccine is only at best 40% effective in flu prevention. More taxpayer money is stolen for big pharma.

How did America reject truth and embrace the lie? Thomas Paine also said the following:

“A body of men holding themselves accountable to nobody ought not to be trusted by anybody.”

Do readers think that the American government tells the truth about anything? This is what the perpetual lie gets us. It is generally accepted that there are some 195 countries in the world. According to Wikileaks, the US military is deployed in about 150 of them. In other words, US taxpayer money supports military occupations in 75% of the countries on the planet. Why?

This is what happens when citizens are not represented in government. We no longer have Andrew Jackson to fight for us.

Thanks again to John M. Barry who wrote the article of truth titled, ‘Journal of the Plague Year’ in Smithsonian’s November, 2017 issue.