Wednesday, September 1, 2010

Stocks Pop, But Will It Last?

Based on some rather dodgy assumptions, like growth in China and Australia, which have some limited impact on some multi-national listed firms, and a better-than-expected ISM Index reading for August, traders sent stocks soaring out of the gate and continued to float them high above Tuesday's closing levels on the first day of September.

The fact that a new month had dawned probably had more to do with the sudden appetite for stocks of all flavors than any foreign or domestic economic news. After a dismal August, buy-siders were looking for anything that might boost their prospects and supposedly, a measly 0.8 rise - from 55.5 in July to 56.3 currently - in the ISM Index was sufficient to get traders all excited about equities.

Of course, we've been warned about "irrational exuberance" before, but the Wall Street masters of the universe can't be expected to take a crumbling global economic system lying down, so they conveniently ignored all previous data, including the morning's most important number, a loss of 11,000 private sector jobs in August, according to ADP. Also unnoticed was the 1.0% drop in construction spending, also worse than estimated.

No, the stock jockeys had their horses all set up and ready to rock at the open this morning, and nothing short of nuclear war was going to keep them from bumping up all prices on the first day of the month. Let's not forget that monthly stock options expire in just eleven more trading days, that being where much of the profits are being generated these days.

Yes, things are going well in China and Australia, but that doesn't say much about prospects here in the land of the free ride and the home of the knave. We still have wicked structural imbalances, a cratering infrastructure, worsening unemployment and a real estate market that is an absolute disaster of the first order. So, let's go out and buy some more stocks, hang the valuations and damn the skeptics. This is America! Money rules!

What a bunch of absolute rubbish. The crooks are still in control and leading the masses, pied-piper-like, to the brink of insolvency. While they expect mutual funds, pension funds and individuals to follow their lead, they are hedging and shorting every gain. They know what's up. They are aware of the severity of the crisis from which we have not recovered, yet they continue to herd the masses into ovens burning with stock certificates on top of faulty mortgages and promissory notes.

March on, idiot sheeple! These one-day events are typical in bear markets, and we are in a bear market and have been since August 2007.

Dow 10,269.47, +254.75 (2.54%)
NASDAQ 2,176.84, +62.81 (2.97%)
S&P 500 1,080.29, +30.96 (2.95%)
NYSE Composite 6,910.98, +206.83 (3.09%)

As one would suspect, advancing issued danced all over decliners, 5340-1091. It was one of the most lopsided A-D lines of the year. New highs paraded past new lows, 376-75. Even volume was a bit better, with the best overall showing in three weeks, though still well below levels consistent with a healthy market.

NASDAQ Volume 2,160,659,000
NYSE Volume 5,142,812,000

Making sure that all the greedy bastards in the world got a piece of today's action, oil spiked $1.99, to $73.91, while gold was lower by $2.00, to $1,246.30 and silver down 4 cents, to $19.36.

Here's a note to remember. When stocks are up massively, like today, gold and silver would normally be down quite a bit. Today's trade shows that the rich and powerful can actually have their cake and eat it too, as they are now hoarding gold and silver while chumping everyone with stupid stock bets.

Word to the wise: equities are a racket controlled by an unregulated Wall Street mob which is hedging its bets, buying gold and silver with part of every dollar they skim off the uninformed investors. The only way to play this is as I've suggested in the past: hold cash, buy arable land, tools of trades, gold and silver and prepare for radical changes over the next five to seven years, as they are unavoidable.

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