Stocks zig-zagged their way through options expiry, drooping in the morning and early afternoon, but gaining a little ground in late trading, eventually closing marginally in the red, but strongly higher for the week.
The major indices had a banner week, with the averages closing higher for the seventh time in the last nine weeks. The Dow Jones Industrial Average has rocketed nearly 2500 points in just about two months of trading. It's an impressive run, though likely not to be sustainable. At the very least, it's all just paper, which can be blown away on a whim.
For the week:
Dow: +320.36 (1.82%)
S&P 500: +33.11 (1.62%)
NASDAQ: +87.53 (1.80%)
On the day:
S&P 500: 2,080.69, -2.09 (0.10%)
Dow: 17,897.25, -29.18 (0.16%)
NASDAQ: 4,938.22, -7.67 (0.16%)
Crude Oil 40.36 -2.75% Gold 1,235.90 +0.77% EUR/USD 1.1284 +0.18% 10-Yr Bond 1.75 -1.63% Corn 380.00 +1.60% Copper 2.15 -0.94% Silver 16.26 +0.57% Natural Gas 1.91 -3.25% Russell 2000 1,130.62 +0.18% VIX 13.84 +0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4198 +0.33% USD/JPY 108.7350 -0.66%
More important news follows...
While this news may be rather stunning to the average investor, those who don't own any silver and/or gold, Deutsche Bank agreed to settle litigation accusing it and other banks of manipulating the price of gold and silver, to the detriment of investors worldwide.
Terms were not disclosed, but this much we now know: banks are crooks, plain and simple. The world's largest banks have been found guilty of manipulating everything from mortgages to libor to interest rates to oil prices.
The sad part about this story is that while Deustche Bank will pay a fine (which will be a fraction of what they made by rigging the markets for themselves and friends), and is supposed to turn evidence on the other banks accused of collusion with them in the rigging, not a single trader or executive will face criminal charges.
Don't believe it? Try reading and going through the myrid links in this article posted on Zero Hedge.
That's why nobody trades in the stock market anymore, except for hedge funds, mutual and pension fund managers and others with inside information. It's all rigged, and it's been that way for a long time - maybe 20 years - but now it is worse than ever.
Money Daily has repeatedly warned that there hasn't been a mechanism for price discovery since the bank bailouts of 2009, and there sure aren't now. How much should you pay for a whole chicken? A used car? A house?
With markets routinely monopolized and manipulated by a criminal cartel, with the blessing of the world's central banks, how can anyone know what is fair value.
This is exactly why Money Daily often has little comment on markets or the commentary is decidedly of a negative tone. Markets are all rigged by players with a lot more money and information than the average investor. It's all a big con game. The only true stores of value are gold, silver and certain real estate, especially farm land. At least, when everything goes belly up, you can grow your own food and feed your family.
Good luck.
Showing posts with label rigged markets. Show all posts
Showing posts with label rigged markets. Show all posts
Friday, April 15, 2016
Monday, March 7, 2016
Seven Years Out, The Great Recovery Is Over As Eric Andrews Is Awarded $55 Million She'll Never See
Flash back to March 6, 2009 and what does one find?
The S&P 500 was trading at 666.79, which would eventually become known as "the bottom," the intraday low for stocks after the great crash which began in earnest in October of 2008.
As late as September 19, 2008, the S&P had traded as well the mid 1200s, closing, on that date, at 1255.08. Nearing the end of October, the same index was in the 800s (October 27: 848.92), nearly a 33% haircut in just over a month.
Gains that had taken years to produce were dissipated in less than 30 trading sessions. That was only a sideshow. The slide that began in 2007, started from a high point of 1565.15 (the close on October 9, 2007) had taken a full year to gut the S&P, cutting the valuation nearly in half. The rest of the damage would be done in the fall and winter of 2008-09, for a total rout of 57.4%, wiping out the savings of millions of Americans and foreign investors.
Most people aren't aware of the extraordinary measures taken by the Federal Reserve and other central banks around the world to stop the plunge, but perhaps the most instructive - and eventually damaging - measure was taken by the FASB (Federal Accounting Standards Board) on April 2nd, 2009, to suspend rule 157, relieving financial institutions - primarily the too-big-to-fail banks - of the rigors of mark-to-market accounting. The banks would no longer have to value assets at any perceived market value, but at any value they deemed "reasonable" or otherwise flattering to their balance sheets.
At the time, the banks were saddled with billions of dollars worth of nearly-worthless mortgages, which they themselves had originated, or bought, in the bubbly real estate market of the early-to-mid 2000s. The entire bubble they created had burst, assets were impaired, homeowners were walking away from commitments they should never have made on houses they normally could never had qualified to buy.
Eventually, the Fed came in and rescued the banks further, buying up all the toxic paper in various rounds of QE, the last one ending in 2014. By then the markets had recovered, stocks had soared to new, unimaginable heights, and the global economy was pronounced "saved."
But, the FASB has never reinstated rule 157, meaning, in simple terms, that bank assets are still, to this day, based on fictional valuations.
To get an idea just how far down the rabbit hole price discovery has gone, just contemplate for a moment that Erin Andrews has been awarded a judgment of $55 million for being peeped upon in a hotel and having a video of her distributed online. Some models have posed au natural for significantly less.
Seriously, is anybody's body, or their pride, worth $55 million? The hotel she is suing isn't even worth anything close to that amount of money, so, in effect, this jury basically awarded the victim the entire assets of the hotel, and more.
Andrews will never see that money, however. Nobody has all of it. She will get some, her lawyers will get a third or more, of whatever she can recover, but, in essence, Erin Andrews is now a hotel owner.
Yes, she was wronged, but the point is that price discovery was done away with in 2009 with the suspension of rule 157, and nobody can place accurate valuations on anything.
Is gold worth $1200 an ounce, or $600, or $30,000. Is your car worth $35,000? Who knows? It's all relative now.
And relativity, in the sciences at least, is still theoretical.
So is existence. And we're back to where we began. Whoever can set the prices, dictates the terms. For now, the markets - as rigged and manipulated as they are - sets the prices. That's not going to last.
Good night.
S&P 500: 2,001.76, +1.77 (0.09%)
Dow: 17,073.95, +67.18 (0.40%)
NASDAQ: 4,708.25, -8.77 (0.19%)
Crude Oil 37.87 +5.43% Gold 1,268.40 -0.18% EUR/USD 1.1014 -0.0018% 10-Yr Bond 1.9020 +1.01% Corn 359.50 +0.35% Copper 2.28 +0.24% Silver 15.67 -0.15% Natural Gas 1.69 +1.56% Russell 2000 1,094.15 +1.13% VIX 17.35 +2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4257 -0.04% USD/JPY 113.4160 +0.03%
The S&P 500 was trading at 666.79, which would eventually become known as "the bottom," the intraday low for stocks after the great crash which began in earnest in October of 2008.
As late as September 19, 2008, the S&P had traded as well the mid 1200s, closing, on that date, at 1255.08. Nearing the end of October, the same index was in the 800s (October 27: 848.92), nearly a 33% haircut in just over a month.
Gains that had taken years to produce were dissipated in less than 30 trading sessions. That was only a sideshow. The slide that began in 2007, started from a high point of 1565.15 (the close on October 9, 2007) had taken a full year to gut the S&P, cutting the valuation nearly in half. The rest of the damage would be done in the fall and winter of 2008-09, for a total rout of 57.4%, wiping out the savings of millions of Americans and foreign investors.
Most people aren't aware of the extraordinary measures taken by the Federal Reserve and other central banks around the world to stop the plunge, but perhaps the most instructive - and eventually damaging - measure was taken by the FASB (Federal Accounting Standards Board) on April 2nd, 2009, to suspend rule 157, relieving financial institutions - primarily the too-big-to-fail banks - of the rigors of mark-to-market accounting. The banks would no longer have to value assets at any perceived market value, but at any value they deemed "reasonable" or otherwise flattering to their balance sheets.
At the time, the banks were saddled with billions of dollars worth of nearly-worthless mortgages, which they themselves had originated, or bought, in the bubbly real estate market of the early-to-mid 2000s. The entire bubble they created had burst, assets were impaired, homeowners were walking away from commitments they should never have made on houses they normally could never had qualified to buy.
Eventually, the Fed came in and rescued the banks further, buying up all the toxic paper in various rounds of QE, the last one ending in 2014. By then the markets had recovered, stocks had soared to new, unimaginable heights, and the global economy was pronounced "saved."
But, the FASB has never reinstated rule 157, meaning, in simple terms, that bank assets are still, to this day, based on fictional valuations.
To get an idea just how far down the rabbit hole price discovery has gone, just contemplate for a moment that Erin Andrews has been awarded a judgment of $55 million for being peeped upon in a hotel and having a video of her distributed online. Some models have posed au natural for significantly less.
Seriously, is anybody's body, or their pride, worth $55 million? The hotel she is suing isn't even worth anything close to that amount of money, so, in effect, this jury basically awarded the victim the entire assets of the hotel, and more.
Andrews will never see that money, however. Nobody has all of it. She will get some, her lawyers will get a third or more, of whatever she can recover, but, in essence, Erin Andrews is now a hotel owner.
Yes, she was wronged, but the point is that price discovery was done away with in 2009 with the suspension of rule 157, and nobody can place accurate valuations on anything.
Is gold worth $1200 an ounce, or $600, or $30,000. Is your car worth $35,000? Who knows? It's all relative now.
And relativity, in the sciences at least, is still theoretical.
So is existence. And we're back to where we began. Whoever can set the prices, dictates the terms. For now, the markets - as rigged and manipulated as they are - sets the prices. That's not going to last.
Good night.
S&P 500: 2,001.76, +1.77 (0.09%)
Dow: 17,073.95, +67.18 (0.40%)
NASDAQ: 4,708.25, -8.77 (0.19%)
Crude Oil 37.87 +5.43% Gold 1,268.40 -0.18% EUR/USD 1.1014 -0.0018% 10-Yr Bond 1.9020 +1.01% Corn 359.50 +0.35% Copper 2.28 +0.24% Silver 15.67 -0.15% Natural Gas 1.69 +1.56% Russell 2000 1,094.15 +1.13% VIX 17.35 +2.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4257 -0.04% USD/JPY 113.4160 +0.03%
Monday, February 29, 2016
Stormy Monday Portends Trouble for Bullish Case
It's the last day of February. The market bulls could have added a little window dressing to make their case, but, instead, stocks vacillated from the open until just before noon, with losses mounting through the afternoon and into the close.
Not only is this an end of month Monday, but it is also the start of "jobs week," wherein all eyes will be peeled open in anticipation of Friday's non-farm payroll report for February. The structure of the market and the charts suggest that the rally of the prior two weeks has not only stalled out, but lost its bearings, since oil was markedly higher on the day. Stocks did not follow.
The problem with the oil/stocks pairing is that they are not and should not be aligned. Lower oil prices, have, over time, proven to be a boost for economies, but not necessarily the stock market. In reality, lower oil and distillate prices should be an overall boon for businesses, lowering a variable cost, thus potentially boosting profits. With the massive, global oversupply of crude that exists presently, the natural price of oil should be closer to $20 per barrel than $30.
Since the oil/stocks dichotomy is likely a false paradigm, the decoupling exposes the rigged market for what it really is: front-running algos, insider trading, forced trades at stops, short-covering rallies on vaporish volume and insidious surprise rebounds off questionable low points.
That's what makes today's slide all the more concerning. Perhaps the masks are coming off and the knives are coming out. We are undoubtably at the beginning of a secular bear market, with the long-toothed bull dying back in May of 2015. It's been downhill - with assorted fits and starts - since then, and markets are still in a search for the bottom.
Perhaps a one-off isn't enough to convince the bulls that the party is over. Stocks may well resume their rally as the week continues. As noted in Money Daily's weekend recap, the rally should have legs through the FOMC meeting before capitulation commences. However, it won't be the first time to be proven wrong, and surely not the last.
S&P 500: 1,932.23, -15.82 (0.81%)
Dow: 16,516.50, -123.47 (0.74%)
NASDAQ: 4,557.95, -32.52 (0.71%)
Crude Oil 33.89 +3.39% Gold 1,239.30 +1.55% EUR/USD 1.0877 -0.50% 10-Yr Bond 1.74 -1.25% Corn 357.25 -0.63% Copper 2.13 +0.19% Silver 14.94 +1.50% Natural Gas 1.71 -4.63% Russell 2000 1,033.90 -0.32% VIX 20.55 +3.74% BATS 1000 20,677.17 0.00% GBP/USD 1.3919 +0.41% USD/JPY 112.7050 -0.88%
Not only is this an end of month Monday, but it is also the start of "jobs week," wherein all eyes will be peeled open in anticipation of Friday's non-farm payroll report for February. The structure of the market and the charts suggest that the rally of the prior two weeks has not only stalled out, but lost its bearings, since oil was markedly higher on the day. Stocks did not follow.
The problem with the oil/stocks pairing is that they are not and should not be aligned. Lower oil prices, have, over time, proven to be a boost for economies, but not necessarily the stock market. In reality, lower oil and distillate prices should be an overall boon for businesses, lowering a variable cost, thus potentially boosting profits. With the massive, global oversupply of crude that exists presently, the natural price of oil should be closer to $20 per barrel than $30.
Since the oil/stocks dichotomy is likely a false paradigm, the decoupling exposes the rigged market for what it really is: front-running algos, insider trading, forced trades at stops, short-covering rallies on vaporish volume and insidious surprise rebounds off questionable low points.
That's what makes today's slide all the more concerning. Perhaps the masks are coming off and the knives are coming out. We are undoubtably at the beginning of a secular bear market, with the long-toothed bull dying back in May of 2015. It's been downhill - with assorted fits and starts - since then, and markets are still in a search for the bottom.
Perhaps a one-off isn't enough to convince the bulls that the party is over. Stocks may well resume their rally as the week continues. As noted in Money Daily's weekend recap, the rally should have legs through the FOMC meeting before capitulation commences. However, it won't be the first time to be proven wrong, and surely not the last.
S&P 500: 1,932.23, -15.82 (0.81%)
Dow: 16,516.50, -123.47 (0.74%)
NASDAQ: 4,557.95, -32.52 (0.71%)
Crude Oil 33.89 +3.39% Gold 1,239.30 +1.55% EUR/USD 1.0877 -0.50% 10-Yr Bond 1.74 -1.25% Corn 357.25 -0.63% Copper 2.13 +0.19% Silver 14.94 +1.50% Natural Gas 1.71 -4.63% Russell 2000 1,033.90 -0.32% VIX 20.55 +3.74% BATS 1000 20,677.17 0.00% GBP/USD 1.3919 +0.41% USD/JPY 112.7050 -0.88%
Tuesday, May 25, 2010
Money At Risk: Dow Plunges 290, Recovers, Gives Investors False Hope
Just like the "flash crash" of May 6, there will be no explanation given for the reversal of fortunes today in stocks. When all of the other major global markets - Japan, China, Hong Kong, Korea, France, Great Britain, Germany, Brazil - were down anywhere from two to four per cent, and US markets initially crash, but then recover to walk away barely bruised, what does that tell you?
That we're special, somehow? That the US is in so much better shape than the rest of the world that if their economies all imploded, ours would receive hardly a scratch? Anyone who buys into such cockeyed logic should have "MORON" stamped upon their forehead.
No, what that tells anybody with any knowledge of how deeply corrupted our stock exchanges have become, is that they are a massively rigged game, and the winners are mostly insiders at banks and brokerages pushing the market in whichever ways delights their fancies and fattens their bottom lines.
Stocks fell to levels below both the 1000-point flash crash and below all preceding 2010 lows. That happened right out of the gate, within 15 minutes of the open. Stock futures had been forewarning a brutal open, with Dow futures down as much as 250 points prior to the bell-ringing. These kinds of gap opens serve only to benefit inside traders, to the detriment of individual investors and fund managers who cannot move massive amounts of stock without really rattling markets.
The average Jane or Joe who doesn't keep an eye peeled on CNBC all day long may only notice the Dow was down 20 points and be happy with that, never knowing that it was lower by 290 just 15 minutes into the session. The S&P 500 actually finished with a fractional gain, after being down by as many as 32 points.
Possibly the most egregious display of manipulation was in the NASDAQ, which was down by as many as 73 points but recovered to finish down only two points.
Did the issues which hammered all other markets simply go away by the time US markets were trading? No. Those issues were belligerent behavior by North Korea toward their neighbors to the South, a slowdown of economic activity and a potential real estate bubble in China and the continuing fiscal woes of the entire continent of Europe, though more specifically, the potential default of the governments of Greece and Spain.
What most casual observers and investors may not realize is that the markets will return to those lows. Whether they do that tomorrow, Thursday, Friday, next week or next month is immaterial. The major indices all fell below their 200-day moving averages last week and continue to mostly reside there. One day's action will not change the fact that new lows were set in place and such lows will almost always be retested. The Dow and S&P were in the throes of a triple bottom breakdown, falling below the lows of February and early May. That kind of violation of support just doesn't go away, stocks have to be handled to erase losses and fresh bottoms.
Call it whatever you like, but today set up a new bottom and one of the more severe head fakes ever seen. Downside risk is still predominant and there's a high likelihood that the final push - after 3:00 - was caused mostly by short covering. US markets should not be considered a safe haven for any investor, simply because they are so obviously rigged. They may move strongly in one direction or the other - or both, like today - without reason.
Dow 10,043.75, -22.82 (0.23%)
NASDAQ 2,210.95, -2.60 (0.12%)
S&P 500 1,074.03, +0.38 (0.04%)
NYSE Composite 6,665.83, -0.91 (0.01%)
Market internals offer much better perspective. Declining issues were dominant over advancers, 4334-2242. New lows maintained their advantage over new highs and actually expanded their edge, 369-88. Volume was heavy, owing to the fact that a lot of stock had to be moved around to erase those early losses.
NYSE Volume 8,458,538,000.00
NASDAQ Volume 2,893,359,500.00
Another indication of what really happened today in markets comes from the commodity pits, where July Crude was down $1.68, to $68.75, a fresh closing contract low. Gold finished up $4.00, to $1,197.80, though silver closed down 22 cents, at $17.76.
The deflation trade is still on, meaning one should be either in cash or equivalents, short, living in another country, or all of the above. Money at risk stays at risk, especially in markets so obviously flawed.
Please pay particular attention to anyone who tells you that 1140 on the S&P is a "bottom." You are advised to run - as quickly as possible - as far away as possible from anyone holding that point of view.
That we're special, somehow? That the US is in so much better shape than the rest of the world that if their economies all imploded, ours would receive hardly a scratch? Anyone who buys into such cockeyed logic should have "MORON" stamped upon their forehead.
No, what that tells anybody with any knowledge of how deeply corrupted our stock exchanges have become, is that they are a massively rigged game, and the winners are mostly insiders at banks and brokerages pushing the market in whichever ways delights their fancies and fattens their bottom lines.
Stocks fell to levels below both the 1000-point flash crash and below all preceding 2010 lows. That happened right out of the gate, within 15 minutes of the open. Stock futures had been forewarning a brutal open, with Dow futures down as much as 250 points prior to the bell-ringing. These kinds of gap opens serve only to benefit inside traders, to the detriment of individual investors and fund managers who cannot move massive amounts of stock without really rattling markets.
The average Jane or Joe who doesn't keep an eye peeled on CNBC all day long may only notice the Dow was down 20 points and be happy with that, never knowing that it was lower by 290 just 15 minutes into the session. The S&P 500 actually finished with a fractional gain, after being down by as many as 32 points.
Possibly the most egregious display of manipulation was in the NASDAQ, which was down by as many as 73 points but recovered to finish down only two points.
Did the issues which hammered all other markets simply go away by the time US markets were trading? No. Those issues were belligerent behavior by North Korea toward their neighbors to the South, a slowdown of economic activity and a potential real estate bubble in China and the continuing fiscal woes of the entire continent of Europe, though more specifically, the potential default of the governments of Greece and Spain.
What most casual observers and investors may not realize is that the markets will return to those lows. Whether they do that tomorrow, Thursday, Friday, next week or next month is immaterial. The major indices all fell below their 200-day moving averages last week and continue to mostly reside there. One day's action will not change the fact that new lows were set in place and such lows will almost always be retested. The Dow and S&P were in the throes of a triple bottom breakdown, falling below the lows of February and early May. That kind of violation of support just doesn't go away, stocks have to be handled to erase losses and fresh bottoms.
Call it whatever you like, but today set up a new bottom and one of the more severe head fakes ever seen. Downside risk is still predominant and there's a high likelihood that the final push - after 3:00 - was caused mostly by short covering. US markets should not be considered a safe haven for any investor, simply because they are so obviously rigged. They may move strongly in one direction or the other - or both, like today - without reason.
Dow 10,043.75, -22.82 (0.23%)
NASDAQ 2,210.95, -2.60 (0.12%)
S&P 500 1,074.03, +0.38 (0.04%)
NYSE Composite 6,665.83, -0.91 (0.01%)
Market internals offer much better perspective. Declining issues were dominant over advancers, 4334-2242. New lows maintained their advantage over new highs and actually expanded their edge, 369-88. Volume was heavy, owing to the fact that a lot of stock had to be moved around to erase those early losses.
NYSE Volume 8,458,538,000.00
NASDAQ Volume 2,893,359,500.00
Another indication of what really happened today in markets comes from the commodity pits, where July Crude was down $1.68, to $68.75, a fresh closing contract low. Gold finished up $4.00, to $1,197.80, though silver closed down 22 cents, at $17.76.
The deflation trade is still on, meaning one should be either in cash or equivalents, short, living in another country, or all of the above. Money at risk stays at risk, especially in markets so obviously flawed.
Please pay particular attention to anyone who tells you that 1140 on the S&P is a "bottom." You are advised to run - as quickly as possible - as far away as possible from anyone holding that point of view.
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