Wednesday, March 7, 2012

Who Goosed the Stock Market? The PPT Did, That's Who

The more one endeavors to make sense of the movements of the major equity indices, the more one becomes convinced that there is major manipulation going on behind the scenes and today was just another prime example to throw into the conspiracy hopper.

While the Dow gained 78 points today, all of the gains were produced in roughly a one hour period, from 10:30 am to 11:30 am ET, on extremely light volume. The Dow moved from barely unchanged (12,760) to a gain of nearly eighty points (12,340), which just so happened to be roughly where it closed.

Did Greece's private debt holders agree to a deal at that hour? No.

Did ADP report a gain of 216,000 net private job gains for February. Sorry, that happened at 8:15 am, and the response was pretty muted.

So... let's see. Low volume (if today wasn't the lowest volume of the year, it was certainly close), stocks sliding back near unchanged right after a major selloff the previous session... like the calvary riding to the rescue in a cliche old time Western movie, the PPT - otherwise known as the Plunge Protection Team and officially known as the President's Working Group on Financial Markets has been hard at work ever since 1988, keeping US stock indices safe from free-falling collapses and lately, from even slight declines that might make the markets appear to be as weak as they really are and boosting stock prices when the trading activity all but dries up.

While Joe and Jane Sixpack reads just the headlines and understands nothing except, "honey, our retirement pension fund is up again!" out in the real world its endless money printing and insider stock manipulations that keep the American Dream alive and well.

It's become so blatant and obvious that it is rarely commented upon by even the most suspicious bloggers and underground financial writers. The mainstream press never mentions that the PPT has offices right in New York's financial district - the easier to send orders flying into the fray - or that said offices are owned by the NY Fed.

So, forget everything you just read and move along. You are not supposed to think, analyze or ask any questions. There's nothing to see here, or at least nothing you're supposed to see. In ten seconds your computer will automatically destroy this posting, and your brain will be wiped clean of the heretical commentary presented.


Dow 12,837.33, +78.18 (0.61%)
NASDAQ 2,935.69, +25.37 (0.87%)
S&P 500 1,352.63, +9.27 (0.69%)
NYSE Composite 7,979.83, +59.69 (0.75%)
NASDAQ Volume 1,560,044,000
NYSE Volume 3,515,704,500
Combined NYSE & NASDAQ Advance - Decline: 4287-1316
Combined NYSE & NASDAQ New highs - New lows: 93-43
WTI crude oil: 106.16, +1.46
Gold: 1,683.90, +11.80
Silver: 33.58, +0.80

Tuesday, March 6, 2012

Individual Investors Not Buying Growth and Recovery Myths

Institutional investors, like hedge funds, mutual funds, retirement funds and the like, have a vested interest in keeping stock prices on the rise, such as has been seen in the first few months of this new year.

On the flip side, individual investors have shied away from equities in a meaningful way since the economic collapse of 2008 and few have ventured back. Their reasoning became evident today as stocks were hard-hit globally, beginning overnight in Asia and accelerating with large losses on the european exchanges. By the time the opening bell rang in New York, Wall Street was bracing for a world of hurt.

Remember that disturbing, repeating pattern mentioned at length here yesterday? The one in which stocks fell sharply at the open, only to gradually improve throughout the remainder of the session?

As it appears today, those dips and rises might have been nothing more than smart money getting out ahead of the carnage to come. The repeated attempts and failures for the Dow to close over 13,000 were at least a set-up for a trend top in stocks and may have signaled an impending correction or even outright rout.

The reasons for weakness in stocks could have been predicted by the constancy of low trading volumes, mixed to negative economic data and the non-confirmation by the transportation index. Wall Street's professional prostelitizing over the need for individuals to "get back into the market" or "stay invested" has been running contrary to evidence for quite some time, and it may finally begin to sink in that continual growth is an impossibility and the US "recovery" is nothing but a well-managed myth, propagated by the control freaks in Washington and New York and promulgated by the whores of the media.

Wall Street's five-month-long, liquidity-fueled bogus rally is coming to a quick end. All the cheerleaders for "dow 13,000" are going to look pretty stupid in coming weeks and months as the widely-watched average hovers closer to 12,000 and possibly even lower. How low it will go nobody knows for sure, though there are elements already in place, like Greece, Europe in recession, slowing economies in China, India and Brazil, high food and fuel prices, that could plunge the world into a re-enactment of the 2008 crash, only that this time, fed funds rates are already at zero and tens of trillions of dollars have been thrown at the problems without results.

Today's drop was the first triple-digit decline for the Dow of the new year and the largest percentage decline since November 23. That it comes a day before the release of the ADP private employment data report - which serves as a proxy for Friday's NFP call - is probably not a coincidence. Neither is it coincidental that private bond investors in the Greek bailout will vote on whether or not to accept the terms of a debt restructuring (read: haircut) on Thursday. Bad news might remain in the shadows for a while and might be purposely ignored, but eventually it surfaces, and by then it's usually worse than expected.

In the globally-connected world created by the Keynesian genii central bank economists, Greece's problems are Europe's and our own, and Chinas and everybody's. The contagion which will proceed from Europe will engulf all markets and all countries. Central bankers will have two options: lying and printing, which has been proven ineffective, or, bank liquidations, sovereign defaults and global deflation. They will likely opt for more "pretend and extend" tactics, leading to more inflation and more phony markets in which people of common sense will not participate. The other, proper, Austrian-style solution may be more painful at first for some, but once the toxic debts and zombie banks are flushed from the system, real recovery can begin.

This week and the next two may prove to be as pivotal in terms of the survivability for the entire global economic structure as any time in the last thirty years.

One should not be worried unless one has a job, a pension or most of one's wealth in stocks because the one-percenters of the world are about to become even more vilified than ever as the world's problems are brought out into the open and some may even join the ranks of the feeble top 20 percent. What the global nanking and political cartel has wrought will almost surely destroy more than a few ill-gotten fortunes and many more honestly-made ones, but, whatever path is taken, more economic pain is nearly assured, though this time it will be more evenly distributed.

In fact, those clinging to the bottom rungs of the economic ladder may fare best of all.

Dow 12,759.15, -203.66 (1.57%)
NASDAQ 2,910.32, -40.16 (1.36%)
S&P 500 1,343.36, -20.97 (1.54%)
NYSE Composite 7,920.13, -171.14 (2.12%)
NASDAQ Volume 1,870,041,375
NYSE Volume 4,171,692,250
Combined NYSE & NASDAQ Advance - Decline: 724-4956
Combined NYSE & NASDAQ New highs - New lows: 50-82 (flipped, finally)
WTI crude oil: 104.70, -2.02
Gold: 1,672.10, -31.80
Silver: 32.78, -0.91

Monday, March 5, 2012

Troubling Pattern Continues on Mixed Data

For some reason, stocks continue to take on the same daily trading pattern that has persisted for roughly four weeks now. All of the major indices will start sharply to the downside, only to gather momentum throughout the session.

How stocks go up, after being down early, is a matter for some conjecture. It could be simply a function of the HFT computers which account for 70% off all trading action, it could be an algo designed to take profits early in the day and reinvest later, or it could be something sinister, like market manipulation via the PPT (Plunge Protection Team), which, despite scary market conditions and a shaky economy, still wants to give the impression that the US is in the midst of a recovery.

Whatever the case, it's disturbing to see the same or similar patterns, day in and day out, but conclusions cannot be drawn on patterns alone. Suffice it to say that it's out there for everyone to see - like a zombie market rising from the dead - and until there's a positive catalyst or the wheels fall completely off this liquidity-fueled rally (now into its sixth month without even a five percent pullback), there's little anybody can do about it except confirm its existence.

There were plenty of reasons to sell off today, as China lowered its 2012 GDP estimate from 8% to 7.5% (we should be so fortunate). That half percent may be insignificant, though it is largely understandable, as global growth has pretty much stalled for the past two years and China has been the major exporter during that time. As the People's Republic turns its attention more to the domestic side of things, it should be a signal that the export boom that was largely fed by the US and Europe has come to an end.

European PMI fell to 49.3 in February from 50.4 in January, another sign that Europe is careening toward a recession, and that certainly cannot be good news for the US, either. Besides the absurdity of their dragged-out debt crisis, high prices for fuel and food, and the necessity for structural reform, Europe continues to appear as the proverbial straw that will break the back of the global economic camel. All bourses in Europe finished in the red on the day.

Here in the US, the ISM Services Index showed some resilience, gaining to 57.3 after a print of 56.8 in January, leading some commentators to suggest that strong data in the services sector should result in a lower unemployment rate for February when the BLS issues its non-farm payroll data set on Friday.

One of the more reliable indicators, however continues to display weakness. That would be the Dow Jones Transports, which has not followed the rally of late. After peaking on February 3rd, the index has lost close to 5% since, and any Dow Theory analyst worth his salt will tell you that if the Transports don't confirm a move in the blue chip, there's almost certainly trouble ahead.

And again today, trading volume was absolutely dismal.

Then again, the world didn't end in 2008, but the road back has been long and hard. Food for thought.

Dow 12,962.81, -14.76 (0.11%)
NASDAQ 2,950.48, -25.71 (0.86%)
S&P 500 1,364.33, -5.30 (0.39%)
NYSE Composite 8,091.28, -33.90 (0.42%)
NASDAQ Volume 1,677,286,125
NYSE Volume 3,402,625,250
Combined NYSE & NASDAQ Advance - Decline: 2383-3225
Combined NYSE & NASDAQ New highs - New lows: 132-49 (trending toward convergence)
WTI crude oil: 106.72, +0.02
Gold: 1,703.90, -5.90
Silver: 33.70, -0.83

Friday, March 2, 2012

Down Day All Around as Week Ends; Spain says 'No' to Austerity

Either everybody and their brothers-in-law were taking profits on Friday or there's some kind of disturbance in the Force, because not only were stocks down, but so were oil, gold and silver.

Just for the record, it was another brutally low volume day in equities and very light on economic data. Sure enough, however, our friends in Europe attempted to make things interesting as Spanish Prime Minister Mariano Rajoy defied his EU overlords in Brussels by setting a softer budget target than originally agreed upon.

The targeted budget deficit for 2012 was supposed to be no larger than 4.4 percent of GDP, but Rajoy targeted a deficit that will amount to 5.8 percent of assumed GDP.

Of course, the numbers game is a nebulous one, especially considering Spain's unemployment rate hovering around 20% nationwide.

As EU leaders prepared for a summit beginning Saturday in Brussels, they were greeted by hundreds of union protesters railing against austerity. Similar protest were held in Greece and Spain. Across Spain, students protested cuts to education budgets and the demonstrators clashed with police in Barcelona.

The Spanish demonstrations were large, estimated in the tens of thousands.

Back here on planet America, there were no protests of any size to speak of, though it seemed like everyone was more in a mood to forget about money and budgets and just go home for the weekend.

Dow 12,977.57, -2.73 (0.02%)
NASDAQ 2,976.19, -12.78 (0.43%)
S&P 500 1,369.63, -4.46 (0.32%)
NYSE Composite 8,125.17, -49.94 (0.61%)
NASDAQ Volume 1,754,632,875
NYSE Volume 3,346,330,500
Combined NYSE & NASDAQ Advance - Decline: 1748-3844
Combined NYSE & NASDAQ New highs - New lows: 185-42 (beginning of convergence?)
WTI crude oil: 106.70, -2.14
Gold: 1,709.80, -12.40
Silver: 34.52, -1.14

Thursday, March 1, 2012

Metals, Stocks Rebound; Oil Continues Relentless Rise

After a one-day hiatus from the usual upward trend, stocks, and especially gold and silver rebounded in the midst of the liquidity-fueled rally, though the move in the metals - especially silver - was stronger than the one in equities.

Keeping the lid on stocks somewhat throughout the session were lingering fears of an oil price shock, as WTI crude rose again, mostly on nothing but idle speculation over the situation in Iran, which is largely unfounded and without credibility as the closure of the Strait of Hormuz by the Iranians would be tantamount to economic suicide since they also use the strait to ship their oil produce.

Nonetheless, oil was up almost $2.00 on floor trading and wholesale gas prices rose by another nine cents, a cost which will almost all be passed along to the (un)happy motorists.

The national average for unleaded regular stood at $3.78/gallon according to AAA, with the highest price on the mainland being found in California ($4.33) and the lowest in Wyoming, at $3.17. The states of Oregon, Washington, New York and Illinois are closing in on the $4.00 mark, despite national consumption having dropped to historic low levels over the past six months.

Also putting a damper on investor enthusiasm was today's big miss on the ISM Index, which came in at 52.4 for February, after a reading of 54.1 in January and expectations for 54.7, though that was tempered with another solid reading on initial unemployment claims, which again came in at 351K. Last week's 351K was revised upward to 353K.

Even though gold didn't even come close to recovering the losses from Wednesday, it is still above its trend line and the price of silver moved back above what everyone believes to be key support/resistance at $35.50.

With little on the calendar for Friday, traders will be looking for any kind of catalyst. Perhaps our friends across the pond in Europe will provide some theatrics. They've been eerily quiet for almost two full days... seems like an eternity.

Dow 12,980.30, +28.23 (0.22%)
NASDAQ 2,988.97, +22.08 (0.74%)
S&P 500 1,374.09, +8.41 (0.62%)
NYSE Composite 8,175.20, +61.95 (0.76%)
NASDAQ Volume 1,887,835,875
NYSE Volume 3,910,319,750
Combined NYSE & NASDAQ Advance - Decline: 3532-2096
Combined NYSE & NASDAQ New highs - New lows: 244-30
WTI crude oil: 108.84, +1.77
Gold: 1,722.20, +10.90
Silver: 35.66, +1.02