Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Manipulated Bond & Stocks Markets

Stock-Markets / Market Manipulation Jun 15, 2009 - 01:01 PM GMT

By: Captain_Hook

Stock-Markets

Best Financial Markets Analysis ArticleAs suspected last week, mutual and hedge fund managers could not resist the temptation to push stocks higher in month end window dressing given the opportunity, so they did. And I wouldn’t doubt for a minute the bureaucracy’s price managers were told to make stocks look good at week’s end because of Geithnier’s trip to China, where he is on his first official US paper selling junket. There’s really no other explanation for why stocks mysteriously surged at the close on Friday due to futures buying. (Later Monday we found out it was broker related buying to aid their secondary issues the following week.)


Nobody, and I mean nobody who was spending their own money, would have placed a market order of that size at the close unless they did not care about losing money and / or wanted to affect the price in a meaningful fashion. So, while it’s only speculation this was done in government accounts, never the less, the point is somebody jammed the market higher at the close on Friday in painting a false picture, rendering a ‘paint job’ that even Picasso would have been proud of, no?

The following is an excerpt from commentary that originally appeared at Treasure Chests for the benefit of subscribers on Monday, June 1st, 2009.

Now that we are past month end however, any efforts to repeat last week’s performance will be far more difficult to reproduce, where like Treasury Bonds, price managers would need to increase stock market monetization efforts to levels that might worry even the crazies in New York. Good art doesn’t come cheap though, which is of course why Geithner is in China, attempting to gain increased support for US paper markets. And he may get this support at the expense of the IMF’s gold, which would be the trade off. Such a move would increase Chinese gold reserves substantially in short order, giving them what they want, in exchange for heightened support of US Treasury purchases, which would help to keep interest rates low. If successful, this could help stocks out temporarily in tracing out a more elongated recovery pattern than would be the case under a 1929 to 1932 sequential repeat (see Figure 1). The jury is still out in this regard however, meaning although it’s always possible a stronger bounce higher will prevail, as you will see below it’s not a higher probability based on thoughtful analysis.

Naturally such an outcome would be frustrating for stock market bears with fundamental factors worsening every day. Companies are cutting dividends because earnings are crashing, however right now this doesn’t appear to matter if one is simply looking at stock market performance and not how prices are being artificially jammed higher. Of course manipulations never work for very long, so even if Geithner is successful in wooing the Chinese back into stepped up support of US paper, such efforts will undoubtedly prove futile in the end, as is always the case. This perspective makes a great deal of sense when one realizes that with an estimated $2 trillion in deficits this year the necessary Treasury buying will need to be four times that of last year alone. So you see even though money supply measures are not correctly reflecting this stepped up largesse, as stepped up monetization is occurring already, never the less an exploding monetary base is with us, making the stock market’s lack of response to this condition scary to say the least.

Is this because the bureaucracy wishes to hide the inflation? Perhaps, however as you know from our previous work on this subject matter, money supply growth rates are only part of the equation in equity markets, with the other half of the formula being speculation trends. And as I was alluding to above, with speculators bullish on future prospects for stocks, while it’s always possible the bulls get their way longer, difficulty associated with levitating equity prices should become increasingly apparent as options expiry approaches in three weeks, where at some point such efforts are should fail if history is a good guide. So, while price managers might go the full distance in supporting stocks until Geithner heads home on Tuesday to make it appear the administration is in control (when in actuality they got lucky), with all the shorts blown out of the market now it’s going to be very difficult for these jokers to keep this act up with little buying coming from an increasingly bankrupt public.

This, along with sentiment related considerations is why a sharp decline that would mirror the 1929 to 1932 sequence is still possible if prices start dropping in earnest this week. If you check out the pattern attached above closely however, stocks must begin to drop this week for this to be the case, with continued strength signaling a more elongated recovery pattern is in the cards. In terms of ‘who is leading whom’ when it comes to the larger formula in this regard, I can tell you from previous experience that if history is a good guide, stocks should reverse hard soon and cause the dollar ($) to break back above 80, setting off the next intermediate degree move higher. (i.e. and lower for equities.) This is because its speculation trends in stocks, and how stocks behave on a lasting basis because of this factor, which drives the trade not just in equities, but also in commodities and currencies as well. So, the thinking is as liquidity dries up with falling stocks, speculators will continue to collapse margin / debt levels, which will reinforce continued contraction in equities as a deflationary spiral takes hold of macro-conditions once again. Thus, in terms of annotations on the chart below, the question is ‘are we here yet’. (See Figure 1)

Figure 1

As I write, based on the way foreign markets and the futures are trading, it appears the 233-month exponential moving average on the S&P 500 (SPX) is about to answer the above question with a resounding ‘are you kidding – the future is so bright we should all be wearing shades’. However one must remember the cash market has only been trading for 5-minutes within the context of a 30-point futures related ‘jam job’, so again, in my opinion it’s fair to say the jury is still out in this regard. Myself, although Da Boyz appear determined to take out the 200-day moving average with a flag breakout that can be seen on the daily here, I think this is a good short selling opportunity, where based on historical precedent under similar circumstances / and trading patterns, even if a more elongated recovery pattern becomes reality, the upside from here would be minimal. That is to say although this recovery could last well into next year if the pattern mirrors the post crash Nikki bounce, a period of consolidation should set in soon that will enable short sellers to cover tenuous positions later on if the sentiment picture morphs. So, taking on short positions into this contrived rally is a ‘fair bet’ in my opinion, one that has an identifiable out later on if stocks do not fall off their apple cart here.

Further to this, and in taking a good look at the variable factors that matter, it’s important to note not only are small speculators still at meaningful bullish consensus extremes on the Dow, SPX, and NDX (NASDAQ 100), but that open interest put / call ratios on the tech related indexes (NDX, MNX, and QQQQ) have not increased since last month’s expiry, making out-performance here very unlikely as the next expiry approaches on March 19th. This of course means that comments regarding prospects for the NDX / Dow Ratio discussed in our last meeting should ultimately prove correct, if not immediately. What’s more, we should not forget that from a technical perspective the NASDAQ is presently testing a profound long-term channel break, where even if the test is as sloppy as the thinking down at the Treasury department, it should hold in knowing the sentiment picture outlined above, with the bounce ultimately failing in coming days. (See Figure 2)

Figure 2

Unfortunately we cannot carry on past this point, as the remainder of this analysis is reserved for our subscribers. Of course if the above is the kind of analysis you are looking for this is easily remedied by visiting our continually improved web site to discover more about how our service can help you in not only this regard, but also in achieving your financial goals. For your information, our newly reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

And if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these matters.

Good investing all.

By Captain Hook

http://www.treasurechestsinfo.com/

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2009 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 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