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Wednesday, May 31, 2017

THE GRAND ILLUSION


“If the stock indices had a face, this would be it.”

With exactly 3 hours until the open, word went out, bids got placed in the FANG stocks, and “pajama” traders panicked all at once to the upside, on this last day of trading for the month of May. And since we can expect the institutional Chipmunks to rush into stocks at the open for “window dressing” purposes, cuz they want all their clients to see in their 13-F filings that they’re in the “right & proper” MoMo stocks of the moment, why wouldn’t stocks rally pre-market to get these morons to buy at higher prices? EXIT QUESTION: “What changed in the world over the last 90 minutes to get the largest equity indices market on earth to go up 0.1%? What? Somebody enlighten my sorry donkey, cuz if it’s not manipulation from the deepest pockets on earth [a/k/a central banks], then what was it? And so, the “illusion” continues day-in, day-out as otherwise “normal” people rack their brains to try and figure this crap out and can’t do it.

And even if they can, most won’t believe it cuz they can’t square the implications in their head of the consequences in other parts of their life of challenging Wall Street orthodoxy. Sadly, I’ve known liberals who can’t face facts and accept reality; they make lousy traders; just as sadly, I’ve known conservatives who can’t see the hypocrisy in their own “facts” and are just as delusional about trading as others. “Fact is, until you accept the fact that these markets are manipulated and that you have to figure out how to get their manipulations to “work for you”, you might as well be Alfred E. Nueman”.

So, here we are today facing end of month money flows, and a crude oil inventory report that has the potential to crater crude below $48 / bbl. rather quickly; the key question, of course, is will the oil “Plunge Protection Team” show up and save the day if this happens? I’m betting they will, cuz stocks must go higher without any real cracks in the dam, and a plunging crude oil price threatens the energy industry that is overweight energy to begin with. We’ll see what happens, but under no circumstances will the equity markets be allowed to go down the “rabbit hole”; we know this from the FED Pie Hole after yesterday’s interview with CNBC head FED apple polisher S. Liesman.

Turning to today’s market … a funny thing happened after the Chipmunks failed to show up and buy at the open … seems crude oil has the market spooked after breaking $48 … and whaddaya know, NDX finally discovers gravity … I mean, what’s wrong with the market’s favorite stock at $1,000 per share @ almost 200 PE? First trade of the day directly below; I had to take some heat, but it finally rallied some before oil stabilized, so I treated it as a scalp.


As you can see, I was a hair early; didn’t count on crude oil plunging to take out stops below $48 before the oil inventories report that I thought was coming at 10:30. For now, the market is on hold. Oil doesn’t waterfall, so stocks take this as a positive and immediately rally. But apparently, I’m wrong about the API oil data @ 10:30, cuz I can’t find it anywhere; fact is I don’t know when it’s going to be released now except that it’s today sometime … great … this is what pisses me off about oil … they change everything around at the drop of a hat, and I can never get a handle on when shit is reported that affects the market. And once again, it bites me in the ass, cuz it causes me to treat the Dow30 trade as a scalp when it didn’t have to be; it makes a large gain into a small gain, and once again the oil Gods make me look like an idiot. “Hey, I don’t need your help to be an idiot; I can do it all by myself, OK”?

Well, now that the retail sell stops have been flushed out of the SP500 & NDX100, along with the Dow30, and the fact oil didn’t plunge after taking out stops below $48, means stocks are set to rally with nothing in there way except pesky facts of economic gloom & doom with terrible home sales & PMI figures; but, as I have said before, news doesn’t mean Mr. Jack Squat. The marching orders were given yesterday by the FED Pie Hole for the correction, and now subsequent rally. EXIT QUESTION OF THE DAY: “Can they rally this stuff back over 21100 – 21110 or do we retest the lows at 20940”?

Well, that escalated quickly; market is at 21110 within 45 minutes of the low 70 points ago. Frickin’ oil a-hole industry; OK, happy thoughts, like puppies or something … “no, you ain’t gettin’ a Beggin’ Strip now”! … “dog is readin’ my thoughts and it’s freakin’ me out here” … I find it hard to believe they’re gonna bring it back today over the opening level of 21047, but since the central planners don’t email me to let me know for sure, the market has got to be careful of more shoes to drop here, especially in NDX100.

Once again today, we see the first leg down be the bottom, with no test of the low or even anything remotely considered a move down after the low is put in; as I said yesterday, this is rare, but it is happening with increased frequency lately [last few months]. This most likely due to the fact the first leg is simply long liquidation and there isn’t anything left when it’s over; in other words no follow through on the sell side.

Also again today, the crude oil “Plunge Protection Team” hard at work after stops get taken out below $48; after that it’s straight up to support equities until the API inventories report at 4:30 P.M., after equities close, and by then who cares about oil? Better two-way action in the Dow30 today, only because 1) NDX100 rediscovers gravity, 2) the economic data is horrible, and 3) the FED Pie Hole yesterday gave the “green light” for a correction with his “it’s healthy” seal of good approval from the central planners. Still, it isn’t anywhere near where it should be and has been in the past.

Now I see on ZH, that the PMI numbers that came in this morning that were abysmal have been changed due to a “reporting error”; “sure thing; and I’m supposed to believe this”? Here at 17:18 server time the market takes out the previous 100 minutes of action in about 5 seconds to the downside; this is exactly what concerns me about being long from the first leg down and also being below the opening New York level. It’s a dangerous trade, especially in a complacent market that has been conditioned these last couple of months to view this first leg as “that’s it” when it comes to the daily bottom; well, I got news for you, history says otherwise. Granted, we got the central bank planners preventing a meltdown or even a mini meltdown, but they aren’t going to prevent a correction, especially when the day before one of their very own said it would be “healthy” if the market had one. Well, here it is … here’s to your “health”!

Here in the early afternoon, the Dow30 really doesn’t act like we’ve seen the bottom of this correction; the market is only about a dozen points from my earlier liquidation exit from the waterfall drop. It should be higher than this, but isn’t; I think it’s too late for new lows for the day, simply cuz the planners really don’t want an end of day panic on their hands to the downside. On the other hand, unless there is some catalyst for the Dow30 to rally up to the New York open, all that is going to do is rob tomorrow’s trading of some firepower the market needs tomorrow. So, it looks like serious “chop” the rest of the day, with spikes up, then down, to get people to do what they don’t want to do.

I’m somewhat miffed I got bad info about the oil report today; it cost me money. But, it is what it is, and I can’t dwell on stupidity otherwise I’d already be insane by now … I hate in when I’m logical like this. So, we take another small gain and move forward to tomorrow.

PAMM spreadsheet directly below.


The dog is driving me nuts again; ever since he read my thoughts earlier… the beach beckons … I’m so outta here … until tomorrow.

Have a great day everybody!

-vegas

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