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Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Federal Reserve Bank ‘Guarantees’ Dow Will Not Sink Below 26k

Stock-Markets / Stock Markets 2019 Oct 05, 2019 - 01:49 PM GMT

By: Barry_M_Ferguson

Stock-Markets

Today is an important day for people like myself. I have maintained for years that the Federal Reserve Bank is an evil institution and their only goal is enslavement of humans. They accomplish this task with multiple weapons. Their best weapon is the stupidity of those humans who don’t seem to understand any more about their world than does the burrow harnessed to a grinding wheel. They just keep going round and round and the only person getting anywhere is the owner of the grinding wheel. That would be the Fed.

Another powerful weapon they use is the stock market. As long as the Dow continues to advance higher, no one will question how it got there. And, as long as the Dow advances, the idiots that invest their money will continue to exude arrogance of their investment knowledge. At the end of the day, investors know nothing about anything. The Dow Jones Industrial average is now simply a carrot to keep the burrow walking in a circle.


There is a lot of talk about an impending recession in the markets. President Trump remains under siege attacked daily by wicked forces he does not completely understand. I could lay out a litany of worries that should give investors a reason to at least pause and reassess the landscape. But let me help with a bit of truth.

There are no markets. Nothing trades freely with buyers and sellers setting prices. The world is contrived now. People can pretend to be different genders. They can pretend to be politicians that ‘represent the electorate’. They can pretend that a world dominated by central bankers can be equitable and affluent. Reality is nodding its head.

With stocks and investing, nothing matters except what the Fed is doing. They raise interest rates, they buy stocks, they punish stock sellers, they destroy owners of put options, and they manipulate asset prices every second of every day. I don’t care what they say. They are liars and frauds. People are slaves and idiots for believing them.

It should seem obvious that the Fed sets prices and over time they do so in systematic steps. Being fraudulent, they don’t need silly things like corporate earnings or actual truthful economic data to accomplish their goal. Their corral of greed and ignorance is open and citizens and investors keep running in there apparently none the wiser that they are eventually going to be slaughtered.

These systematic steps can be seen on the charts if one is honest and knows what to look for. The Fed seems to be very comfortable with big round numbers. I have included a chart of the Dow over the last five years with green horizontal lines marking these round numbers. We can see from that chart that Dow 18k was an important level for the Fed to surmount. They finally did so in spite of the Obama disaster of a presidency. Once they achieve a goal, they never give it up.

They then work the Dow like a step ladder 2,000 points at a time. After Dow 18k, the Fed set its next target at 20k. Once achieved, 22k. Once achieved, 24k. They may have overshot their 24k with all their ‘happy talk’ and the Dow ran up to 26k. Now notice the chart below. The Dow sank to the 24k step and the Fed defended that mark and pushed the Dow back to 26k. Again, reality popped out for a moment and selling pushed the Dow below 24k all the way to 22k by the end of 2018. That’s where it really becomes apparent that the Fed goes to work.

Did I mention that the Fed will never give up ground? Or, in our example of the ladder leading to the heavens, the Fed will never cede a step on the ladder that they have worked so hard to construct. The Fed immediately pushed the Dow higher by 4,000 points, or two ladder steps, to get the Dow back above 26k.

Since Q1 of 2019, the Dow has dropped below the 26k mark four times including today. Every time, the Fed immediately unloaded barrages of stock buying to keep the index above 26k.

Why is today, October 3, 2019 important?

One, the month of October can be problematic for stocks and the Fed does not want a mass selling exodus. So, they manipulate the index. This was a PPT day (Plunge Protection Team).

Two, the Dow has every reason to fall. Economic data is eroding and american politicians are trying to destroy the country form the inside out. Manufacturing has been waning for some time now but today the services index, the biggest part of the economy, reported slower activity as well.

So, the Dow fell almost 300 points at the open only to experience a 400-plus point recovery that only took about an hour to complete putting the Dow firmly back into positive territory for the day. I am so confident that the Fed will not allow selling to drive down the market today that I am writing this piece in mid-afternoon knowing there will be no need to edit anything at the end of the day.

We live in a fraudulent world.  Everything is a con and a scam. Nothing is real. Everything is manipulated. The next goal for the manipulators is Dow 28k and then  30k and beyond. Take a look at the chart below to see how this ridiculousness has become reality.

 

 

 

 

 

 

 

 

DJIA 5 year weekly, green bars represent 2,000 point increments
Chart courtesy stockcharts.com

Now, let’s look at the Federal Reserve’s behavior. It is not what they say but what they do. The Fed completely controls the Fed Funds Rate. I have included a 5-year chart of the Fed Funds below. As I have said for years if not decades, the Fed only has one goal and it ain’t the one the media quotes. That crap about inflation and employment is for stupid people. If you are reading this, you know better.

Very simply, the Fed raises and lowers the Fed Funds Rate in response to what the stock market is doing. And, since the Fed is part of the illuminati plan to destroy President Trump, they embarked on a pretty steep rate ascent to respond to the vibrant stock increase no doubt spurred on by President Trump’s election. When the Dow began to stumble in the Spring this year, the Fed responded by cutting rates. They will continue to cut rates until the Dow rises above 28k. Yes, they are evil, fraudulent, and serial manipulators. See the chart below and you will understand the Fed and their actions. Notice the Dow and Fed Funds are very similar patterns.

I haven’t even touched on the latest Fed quantitative easing through the repo market. I love this scam. The Fed exchanges freshly printed money stolen from the citizens through the cost of inflation for stocks owned by banks. The banks use the money to speculate and gamble and the next day the Fed gives the banks their stocks back and the banks give the Fed their money back. In the meantime, the banks can’t lose because the Fed intervenes in the stock market to push stock prices higher to enrich the banks with appreciated shares upon return. That’s the reality of the repo exercise.

Question. Why repo now? My guess is the banks have been riding the Fed’s sidecar buying stocks with abandon and they have run out of money. Thus, stock prices started to slide south again. To keep the party going, the Fed just brought in another keg. Enjoy the rally, suckers!

Fed Funds Rate 5 years

Barry M. Ferguson, RFC
President, BMF Investments, Inc.
Primary Tel: 704.563.2960
Other Tel: 866.264.4980
Industry: Investment Advisory
barry@bmfinvest.com
www.bmfinvest.com
www.bmfinvest.blogspot.com

Barry M. Ferguson, RFC is President and founder of BMF Investments, Inc. - a fee-based Investment Advisor in Charlotte, NC. He manages several different portfolios that are designed to be market driven and actively managed. Barry shares his unique perspective through his irreverent and very popular newsletter, Barry’s Bulls, authored the book, Navigating the Mind Fields of Investing Money, lectures on investing, and contributes investment articles to various professional publications. He is a member of the International Association of Registered Financial Consultants, the International Speakers Network, and was presented with the prestigious Cato Award for Distinguished Journalism in the Field of Financial Services in 2009.

© 2019 Copyright BMF Investments, Inc. - All Rights Reserved

Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. 


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