Saturday, September 19, 2009

Stock Market Review - 9/18/2009

Recession Ends with a New Bubble in Place

The Dow will hit 11,428 by the end of 2009. How's that for a prediction? Well, it's not so much a prediction as much as a realization that that's where the Fed wants the Dow before year's end. Why? Below is a seven year chart of the Dow. It shows the second hump of the enormous double top suggesting a reading of zero for the Dow eventually. But for now, our bankers need to get their stock options back in the black so the PPT needs to run the markets a bit higher. Since fundamentals have long been deemed useless and unnecessary, we have to turn to technicals. Fibonacci retracement levels are Ben's target so they are now mine as well. Ben can't just buy the bank stocks or even the stupidest investor will catch on that the market rally isn't really about 'economic recovery' or 'market rallies' or any of that crap. It's all about bank domination and banks can't dominate until they have everything. They soon will including CEO options.

I take Dow 7000 as a low and assume that the 6500 mark was just a shameful low that Bernanke and company let slip through their manipulative hands. Long story short, a 50% retracement puts the Dow at about 10588. They should have that by mid-October. Now, remember, Dow 10800 was a tough level to penetrate on the first bubble the Fed blew in the markets but we finally blew it out to 14000. 11428 would the magic 62% retracement but more importantly, that level would break up the downtrend line. Even more importantly, the banking con men will all have their stock options back in the black. Who says, 'crime doesn't pay'? All they had to do was to get the Fed to give them their money back through stock manipulation and give their banks their money back through the Treasury stealing the money from the country. They didn't even have to use a gun. All they had to do was threaten stock holders with further losses. Stock holders have literally given up everything for the current rally. Anyway, look for the next jolt to push the Dow to the mid 10000 range and then the final push to over 11000 that will of course be based on some ridiculous lie conjured by government incapable of truth.

This past week enjoyed yet another week of market gains. As you can see from the chart below, the kitchen sink was thrown at the markets in March and April with the Fed taking center position in stock purchases. Just look at the volume. Who else had that kind of money to throw at a market plunging to zero pushed by a bankrupt financial sector? Every week since, every month since, has seen less and less volume. Worse, almost half of the daily trading volume of late has come from government owned and government bought and government manipulated stocks - Citigroup, Fannie and Freddie, and AIG. The bottom line is that the Fed has killed the sellers. Onward and outward with the next Fed bubble. When it pops, it will be and it will feel just like 2000 all over again. Ebulliency turns to depression in a nano second. We will likely experience an unabated 60% plunge from the popping point. What will instigate it? Perhaps truth and reality.

Heck, government has yet to impose the new government insurance tax. It is incredible that the new government led by some of the stupidest people that have ever walked the planet are so convinced that government can cure anything and that government needs to control everything but they don't see the need for government to control one thing. The currency. They leave that to the real power - the Federal Reserve. I would suggest, as many before me have, that if you don't control your currency, you don't control your destiny. Doesn't it seem incredible that the Fed head, Bernanke, declared the recession dead this past week yet hints that interest rates will remain at zero forever? Isn't it incredible that the recession has ended while members of dumb and dumber Congress are contemplating expanding house buying subsidies to as much as $15,000 per purchase? Are they purposely trying to spiral us into a depression by depressing asset values for everyone that played by the rules and saved and invested? Are they purposely trying to devalue the currency to a point of worthlessness?

Speaking of worthless currency, the stock market is obviously rising as the currency is falling. The bad news is the currency can only fall to zero and it is getting there fast. Gold and silver have awakened from their slumber and now look to be joining other metals in a race to the sky as currency alternatives. Again, if the dollar is worthless, it will be reflected in the interest coupons attached to currency debt. If you borrow the worthless dollar from the worthless Fed at zero percent, you can then sell it and buy another currency like the Aussie that pays an interest coupon. That's called a 'carry trade'. That's how you know that crap in your wallet is useless. It is merely a tool that is used to blow bubbles. All the stupid people like bubbles because they don't know they are bubbles. All the people looking to make a buck on the con job like bubbles because all you have to do is be on the right side of the con men blowing the bubbles. Blow on, Ben. Blow on...

Dow 7 yrs ending 9/18/09 (weekly)
Chart courtesy

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