Best of the Week
Most Popular
1.Election Forecast 2015 - Opinion Polls Trending Towards Conservative Outright Win - Nadeem_Walayat
2.UK Solar Eclipse - End Time Sign, Judgement Day, Doomsday! - Nadeem_Walayat
3.Gold And Silver - When Will Precious Metals Rally? Not In 2015 - Michael_Noonan
4.Preparing for the Next Stocks Bear Market - Forecast 2015-2016 - Gary_Savage
5.Is a Stock Market Crash Imminent? - David Eifrig
6.Gold Price Slumps as US Dollar Soars, What's Next? - Nadeem_Walayat
7.US Dollar Forex Pairs and Gold Chartology - Rambus_Chartology
8.Election Forecast 2015: The Day Labour Lost the General Election - Nadeem_Walayat
9.The ECB Should End QE Next Month - EconMatters
10.Silver Price Poised to Surge - Zeal_LLC
Last 5 days
Ashcroft Poll Forecasts Nick Clegg to Lose Sheffield Hallam, But Tories to Rescue Lib Dems - 2nd Apr 15
Is the U.S. Headed for a Recession? - 1st Apr 15
Did The Fed Just Admit to Deep Uncertainty About Our Financial Security In Retirement? - 1st Apr 15
Gold Price Flat In Quarter In Dollars But 5% Higher In Pounds - 1st Apr 15
Financial Market Extremes: Expect Consequences - 1st Apr 15
Iceland Ponders Radical Banking Plan to Eliminate Fractional Reserve Lending - 1st Apr 15
How Traded Options Can Power a 300%-Plus Gain on Twitter - 1st Apr 15
You Can’t Afford Not to Invest in This Latest Yesla Technology - 1st Apr 15
Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - 1st Apr 15
Bitcoin Price Down Move Still in the Cards - 31st Mar 15
No Body Understands Debt - Living in a Free-Lunch World - 31st Mar 15
Will Gold Win Out Against the US Dollar? - 31st Mar 15
Middle East Balance of Power Matures - 31st Mar 15
Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - 31st Mar 15
Gold and Misery, Strange Bedfellows - 31st Mar 15
Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - 31st Mar 15
Don’t Celebrate the U.S. Housing Market Recovery Yet - 30th Mar 15
A Middle East Nuclear Holocaust - 30th Mar 15
Peak Gold? – Goldman Sachs Research Warns of Peak Gold Production - 30th Mar 15
With Yemen Burning, Arab Spring II Is Underway - 30th Mar 15
No FED Bets From the BIS - 30th Mar 15
Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - 30th Mar 15
Economic Recovery, Geopolitics and Detergents - 30th Mar 15
U.S. Dollar, Commodities and the Gold Miners GDXJ ETF Analysis - 30th Mar 15
Stock Market Short-term Downtrend - 30th Mar 15
David Cameron Election 2015 Debate Facts Check - Employment, Immigration, Debt & Deficit - 29th Mar 15
Stock Market About Ready to Crash! - 29th Mar 15
Reflections in a Golden Eye - Gold Market Rejection, Repatriation and Redemption - 28th Mar 15
Stock Market Inflection Point - 28th Mar 15
Gold And Silver - What Moved Price? Bab el-Mandeb And Uranus Square Pluto. What?! - 28th Mar 15
Stock Market Investment Parachutes; Do You Have Yours? - 28th Mar 15
Peak Gold Misunderstanding, is Gold About to Run Out? - 28th Mar 15
Deflation Watch: Key U.S. Economic Measures Turn South - 27th Mar 15
The Hard-Earned Truth About Recreational Real Estate - 27th Mar 15
Bitcoin Price Still in Important Territory - 27th Mar 15
Stocks Bear Market Conditions - Index Market Range Warning - 27th Mar 15
BEA Leaves Q4 2014 U.S. GDP Growth Essentially Unchanged at 2.22% - 27th Mar 15
Brazil Economy Victim of Vulgar Keynesianism - 27th Mar 15
Gold to Fuel Silver Price Upleg - 27th Mar 15
Gold and Silver Stocks Will Rise Again! - 27th Mar 15
Risk of ‘World War’ between NATO and Russia on Ukraine as Yemen Bombed - 27th Mar 15
FOMC Minutes Turned The Gold Tide - 27th Mar 15
Sheffield Hallam Election Battle 2015 - Lib Dems Go to War Whilst Labour Sleeps - 27th Mar 15
Gold Effect On Mining & Shale Wasteland - 27th Mar 15
How Stock Investors Should Play the 2016 Presidential Race - 26th Mar 15
MidEast Energy Alert: Why the Crisis in Yemen Could Get Ugly Very Fast - 26th Mar 15
Stock Market Downward Spiral of Dumbness - 26th Mar 15
The Monetary Approach Reigns Supreme - 26th Mar 15
Stock Market Large Gap Down, Despite the Algos' Push Back - 26th Mar 15
Crude Oil Surges, Gold price Spikes as Middle East Tensions Escalate - 26th Mar 15
The U.S. Housing Market Recovery Is Fabricated Optimism - 26th Mar 15
Why Yemen Is The Next Saudi-Iranian Battleground - 26th Mar 15
The Crude Oil Price Crash and China Economic Slow Down - 26th Mar 15
Global Financial Markets Are More Distorted Than Ever Before - 26th Mar 15
One More Stock Market Rally and Then a Huge Drop Expected - 26th Mar 15
Danger Will Robinson - Stock Market Crash Warning - 25th Mar 15
Learn the Basics of Corrective Elliott Waves - 25th Mar 15
Why CNBC Is Hazardous to Your Financial Health! - 25th Mar 15
Will Your Retirement Accounts Survive The Coming Tax Code "Revolution"? - 25th Mar 15
US Dollar - Americas Phoenix - 25th Mar 15
California’s Epic Drought: Only One Year of Water Left! - 25th Mar 15
What’s Wrong With Silver? - 25th Mar 15
SPX Futures Appear Weak. WTIC and Gold May Be at Max Retracement - 25th Mar 15
We’re at the Dawn of a “New Energy Age” - 25th Mar 15
A Very Weak U.S. Economic Recovery - 25th Mar 15
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing - 25th Mar 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy Still on Life Support

Faked Stock Markets Waiting for the Real Thing

Stock-Markets / Stock Markets 2014 Mar 31, 2014 - 03:19 PM GMT

By: PhilStockWorld

Stock-Markets

How can you tell when the markets are FAKED?

I've been telling you for years about the various ways the market is rigged and now Michael Lewis has written a whole book about it called Flash Boys, which was featured last night on 60 Minutes.  If you don't have time to read the book – at least PLEASE watch the 60 Minutes video.  


While I find it morally repugnant and I spend countless hours speaking out against it and doing my best to bring these systemic abuses to light, for the purposes of helping our Members make profits at PSW, we live by a very simple rule:

We don't care IF the markets are rigged, as long as we are able to understand HOW they are rigged – so we can place our bets accordingly.  

By understanding the mechanics of the BS that passes for the stock market these days and undersanding the process involved, we are able to line our bets up with the manipulors – or against the manipulated prices to take advantage of the counter-moves when the crooks are done playing with them.  Certainly we never go more than a day without finding a good example!  

While Lewis focuses on the blatant front-running scam by high-frequency traders, we tend to look at the broader picture of the manipulation of indexes and the media by funds who have a whole bag of tricks to stampede the sheeple in and out of positions almost at will. 

We do that by focusing on the VALUE of stocks, not the PRICE and when PRICE becomes removed from VALUE, we look for a trading opportunity.  It's not a complicated system really, once you accept the fact that prices are, in fact, manipulated.  Today happens to be one of the 4 most-manipulated days of the year – the last day of the first quarter, when all the Banksters push stocks in their brochures to levels that will paint a pretty picture on their performance graphs.  

Sure there are some people pushing down and some people pushing up but it's not an even game as the interests of the bulls tend to outweight the interests of the bears so, in absense of some overriding macros to the contrary, we can generally expect an up finish to the day.    

As you can see from the Bespoke chart on the right, about 70% of the best performing stocks outperform the indexes in the last week of the quarter.  That's a 5-year study!  Clearly we are way passed anything that can be labled a "coincidence" by any stretch of the imagination.

Another stupid hedge fund trick to look for is Fund Managers dumping losers today, especially into the bell.   If you don't own your dog of a stock into the closing bell this afternoon – you don't have to show that specific loss to investors in your prospectus, so no one will ever know you bought SCTY in the $70s or NFLX for $450.  Look for stocks that were higher ALL quarter than they are now, those are the top candidates for dumping.  

As you can see on Dave Fry's Nasdaq chart, the entire index is essentially flat for the year at 3,571 (this is the 100, not the Composite) and we're just on the support level of the 22-week moving average.  Of course we expect a bounce – notice we fell 2.23% for the week, which is our 5% Rule's™ expected 2.5% drop and then not even a 20% weak retrace of that bounce.  Generally, that's an indication that we have more downside to come and in Friday's post I told you about our SQQQ (ultra-short Nasdaq) spread as well as our TZA spread.

But, today, we do not expect either of those indexes to drop.  More likely we bounce (weakly) to 1,160 on the Russell and possibly, if the window-dressers are motivated, all the way to 1,170  but we plan to just sit back and enjoy the show today – tomorrow and the rest of the week we'll find out what is real and what's not.

One thing that certainly doesn't seem real is the Nikkei Futures (/NKD) at 14,910 pre-market.  We're still shorting it and we're encouraged by today's Japan Manufacturing PMI coming in at 53.9 (down from 55.5) and Industrial Production at 6.9% (down from 10.3%) and Housing Starts at 919,000 (down from 987,000) with the year/year number at 1% vs a 12.3% reading previously.  It shows Japan's economy slip-sliding down hill and tommorrow the national sales tax goes up 3% – it seems very unlikely that's going to improve things.  

To top it all off, the Dollar fell back to 80.20 this morning and, generally, the Nikkei doesn't like to see a weak Dollar but, today – we're dressing those windows!  

- Phil

Click here for a free trial to Stock World Weekly.

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2014 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PhilStockWorld Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014