Wednesday, March 14, 2012

Bankster Kleptocrats At It Again: Bank Stocks Up, Gold, Silver Down

One of the more tried and true methods of tape-watching is what's known in the business as "follow-through" - the tell-tale next day move in a stock or an index following a bold rally.

A lack of follow-through or extension of the rally usually means that the initial move was either false, poorly-constructed, had less-than-optimal participation or a combination of all of those.

If the tape is correct the day after the biggest one-day upside move in stocks this year, then today's trading certainly did little to confirm the veracity of the rally. With the Dow and NASDAQ up marginally at best, the slight decline in the S&P and the pretty healthy drop on the NYSE Composite reveal the tell-tale signs of a market rally surred on entirely by insiders, those of the Wall Street bankster crowd commonly known as the kleptocracy.

Their aim, obviously, was to instill a desire for individual investors to jump into those juicy big bank stocks like Bank of America (BAC), JP Morgan Chase (JPM), Goldman Sach (GS) and everybody's favorite, Citigroup (C), which incidentally was one of the four which failed the Fed's marginally-constructive stress tests on Tuesday.

The other fairly obvious feature of the Tuesday rally was the often overlooked calendar, which shows clearly that Friday is the third Friday of the month, meaning, yes, siree!, Tuesday's move was decidedly correlated to making oodles of cash on front-end, expiring call options.

Want proof? Take a look at the imbalance of open interest puts to calls on the 40 and 41 strikes of Friday's expiring options in JP Morgan. There were nearly 69,000 calls at those two strike prices, compared to about 25,000 puts. Since we all know there's no free lunch in America - unless you're a school-kid with cheap parents or a bankster will plenty of one-percenter street cred - the imbalance should be a tip as to what happened late yesterday afternoon, when Jamie Dimon jumped the shark and released his firm's (JPM) dividend upgrade before the Fed could expel the stress tests of the other banks. Talk about front-running! Jaime wrote the book with that move.

And for more proof, look below at the Advance-Decline line for today. The rally was definitely sold into by money smarter than that of most people. Volume was at its usual dismal level again today as well.

Just in case anyone thinks the Fed's stress tests were anything more than a call to action from the Fed to individual investors who don't believe a word that comes from ben Bernanke's mouth, one should definitely take a read of Chris Whalen's excellent article at Zero Hedge, Bank Stress Tests and Other Acts of Faith

One needn't be a bank examiner or financial wizard to understand what Whalen means when he says things like,
So when I look at the Fed stress tests, which seem to be the result of a mountain of subjective inputs and assumptions, the overwhelming conclusion is that these tests are meant to justify past Fed policy.
But as we have written over the past several weeks in The Institutional Risk Analyst, the Fed does not want to believe that there is a problem with real estate.

Face it, the Fed's stress tests of 19 of the nation's largest banks were nothing more than a pimp act for their favorite bailout buddies, designed to boost their share prices so insiders could profit at the expense of smaller, less-savvy investors and traders.

If that wasn't enough - and you know it wasn't - the raid on gold and silver today speaks volumes about the un-American policies the Fed pursues. According to the Fed, holding near-worthless scraps of paper like stock certificates of shares in illiquid banks or constantly-devaluing Federal Reserve Notes is far more prudent for us "little people" (or as Goldman Sachs executives like to call their clients, "muppets") than holding onto those relics of the past, gold and silver.

The gloves are off, folks. The Fed, the banksters, the kleptocracy of corporate America has had them off for a long time, bare-knuckling the American middle class like a punch-drunk patsy. It's time Americans with brains (maybe 30% or so of the population) rip off the Everlasts and land a roundhouse on the chops of these wealth thieves.

Close out the 401k, pension plan or whatever vehicle they're "managing" your money in and go buy some silver coins or bars, gold, or land, raise some chickens or pigs, grow some corn or tomatoes or broccoli, but at least stop putting your money into the wall Street Ponzi scheme.

That's going to be easier said than done for a lot of people who have their futures tied into their government sponsored pension plans, which, by the way, will pay out a lot less than expected when the s--- hits the fan, but, if the outflows from mutual funds over the past four years is any indication, you don't want to be one of the last players in the market (otherwise known as bagholders) when the rugs gets pulled out and the bottom drops out of the bottomless pit the financial "industry" has created.

It could be two years, two months or two weeks before the next market "event" but you don't want to be around when it happens and you definitely don't want it all to fall on your pretty little head, now do you?

Tomorrow, we'll take a look at the moves in bonds, and why what they're telling us is very, very bad.

Dow 13,194.33, +16.65 (0.13%)
NASDAQ 3,040.73, +0.85 (0.03%)
S&P 500 1,394.28, -1.67 (0.12%)
NYSE Composite 8,180.17 54.30 (0.66%)
NASDAQ Volume 1,627,102,500
NYSE Volume 4,446,792,500
Combined NYSE & NASDAQ Advance - Decline: 1631-4036
Combined NYSE & NASDAQ New highs - New lows: 318-38
WTI crude oil: 105.43, -1.28
Gold: 1,642.90, -51.30
Silver: 32.18, -1.40

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