Friday, February 5, 2010

PPT Fingerprints All Over Late-Day Rally

If you're unfamiliar with the term "PPT," you haven't been reading about economic conditions very deeply. The Plunge protection Team (PPT) stems from a presidential order (Reagan) that gives the Treasury Secretary, Fed Chairman and others extraordinary powers to combat financial firestorms, one of which is direct intervention into capital and equity markets, and, presumably, any other market.

Stocks began the day trying to overcome the lingering effects of Thursday's drubbing, and, after January Non-farms payroll data turned out to be more confusing than anything else, began to sell off, until, by 2:00 pm, the Dow had sunk another 167 points, pounding resistance. The S&P, already shattered, was being likewise battered.

That, however, proved to be the bottom for the day, and the week. Stocks quickly re-gathered and regained momentum without any catalyst, a tell-tale sign of intervention, something the PPT has been doing with regularity since 2000. From 3:00 to 3:15 pm, the Dow gained 100 points, putting the index near unchanged. The rest of the session was spent by the underpinning PPT and their henchmen making sure the Dow finished above 10,000 (it did) and all fears would be soothed over the weekend.

Their work is a fool's gambit, always has been and always will be. The problem is that they can play it because nobody is auditing them or their activities. The banks and the superstructure above it are irresponsible because they've been allowed to be and they will continue to be irresponsible until they destroy the economic system (almost did) or are destroyed themselves. But don't start holding your breath. The powers that be are incredible entrenched. Prepare for the worst four years of your economic life.

Dow 10,012.23, +10.05 (0.10%)
NASDAQ 2,141.12, +15.69 (0.74%)
S&P 500 1,066.19, +3.08 (0.29%)
NYSE Composite 6,782.75, -5.11 (0.08%)

As more evidence of the manipulative element in today's trading, consider that decliners beat advancers handily, 3476-3039. 149 new lows beat 96 new highs. Both of those indicators are contrary to the headline numbers. Volume was magnificent, owing both the the depth of selling and to the amount of financial heft necessary to keep the market from collapsing. But make no mistake about it. The decline will continue. The markets put in new lows which must be tested before any meaningful advance can occur. Chances are, today's lows will be surpassed to the downside within short order. Todays' reprieve was only necessary to avert a panic and to give insiders more opportunity to profit from the next leg down.

NYSE Volume 7,762,321,000
NASDAQ Volume 2,836,146,250

Oil closed at $71.19, down $2.98, at its lowest price since mid-December. Gold finished down $9.50, at $1,053.50 and silver finished down 47 cents, at $14.88. The commodities were only benefitted after their New York closes, not quite as fortunate as the equity markets.

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