“I’m hungry for your money … feed me!”
I don’t know when, and I don’t know how; what I do know is this won’t end well. The NDX100 is like an anti-gravity machine, and with today’s high “rational" for using printed QE to own the world’s largest tech companies, there comes a point when you hit the “Bunker Hunt moment”.
For those of you too young to know, back in 1979, Bunker & his brother H.L. [Lamar] Hunt attempted to corner the silver market. Although we didn’t know it then, they were in cahoots with the usual middle eastern Sheiks to create a new world currency backed by silver; seems the Arabs didn’t trust the U.S. fiat currency for their oil transactions since Nixon took the U.S. off the gold standard in 1971. Anyway, at the time everybody and their brother were calling for $200 - $ 500 per Oz. silver; they bought up everything they could get their hands on sending the price from about $5 up to the infamous January 1980 high of $50. EXIT QUESTION: “Is the SNB [Swiss National Bank] the modern incarnation of the Hunt Brothers”?
In some ways, I would say yes, but in one important respect there is a major difference, and that difference is that the SNB are their own central bank and can print money, while the Hunt Brothers couldn’t. What that means, is that this could go on for a very long time.
But, it will end the same way … i.e. an NDX100 “crash & burn”; remember, the last time NDX100 crashed was 1999, and Greenspan intentionally tightened interest rates to kill the Nasdaq bubble; however, the Dow30 & SP500 didn’t go down that much. That’s because, at the time, both indices weren’t “tech heavy” in their weightings; this time will be different.
And while all the naysayers are getting killed trying to “pick the top”, and almost daily forced at the end of the day to cover and drive the index ever higher, I can assure you of 3 things; 1) this market will suck in every last dime of new money at the top, 2) at that unknown top there most likely won’t be anybody around who has the money or the gumption to sell it cuz they’ve got burn marks all over themselves, and 3) this time around because of the FED’s QE, the damage will be 10X greater and the pain a lot higher than that. And what all of this means, is the graveyard of traders which at the moment is a large place, will get exponentially larger led by the assclowns at the SNB. The Hunt brothers thought they were invincible; the SNB thinks it’s invincible; what does history teach us about people and/or institutions that carry such hubris? To ask the question is to answer it … people never learn from history and are therefore doomed to repeat it; this time will be no different.
Turning to today’s market … again, looking at the pre-cash market open, it looks like the SP500 is much stronger than the Dow30, and only a few points below 2400; we could be in for one of those slow, glacier like moves higher … we’ll see what happens after the open here in an hour.
More soft data telling us all what we know … literally the economy is imploding … that means of course buy more stocks, just ask the SNB! First trade of the day, sees the SP500 race to a new high over 2401, and after I’m long the Dow30, it doesn’t do Mr. Jack Squat; this tells me it’s time to liquidate cuz when the SP500 backs off even just a couple of tenths of a point, the Dow30 will back off more. Directly below, the first trade of the day.
And here, a couple of minutes later, the SP500 is now a full 2 index points higher and the Dow30 is unchanged from where I sold it; something has to give here, either the Dow30 explodes higher to catch up, or the SP500 backs off quickly. Either way, it’s a big “red flag” for being long the Dow30 at this moment. This large divergence among the 3 top U.S. indices is not a welcome sign, as it means more concentration in stocks like Apple, google, etc., is siphoning money away from the others; yes, it’s “rotation”, but not the kind you want to see for higher prices. And checking prices quickly, as I write the SP500 is 4 full index points higher and the NDX went up and hit 5700, while the Dow30 is only 7 points from my liquidation. So, here a few minutes later, the SP500 backs off a point and the Dow30 goes down 23 to below 70 where I liquidated; my point is proven.
Again, for Newbies especially, the setup here absolutely stunk; outside of the open madness, where daily you got institutions of all stripes doing buy/sell market orders, the setup here for higher prices wasn’t good. I mean, how many index points does the SP500 have to rally to get the Dow30 to go up 5 points? Normally it would be about ½ an index point; today it was over 4; you see this, and you have to know there’s something rotten in Wisconsin and it ain’t the cheese. And the stupidity isn’t stopping, as the NDX100 continues to fractionally hit a new daily record high, the SP500 is on the high, and the Dow30 then pops and drops; “yea, what a great trading market … NOT”!
It's about Noon in New York, and like so many trading days these last couple of months, outside of a couple of days out of 30 – 40, the Dow30 in the New York session simply cannot put in a decent “open to close” rally of any substance before drifting lower. In addition to that, there simply is no “trade flow” here … it moves to a level, then stays there for hours on end before it decides to move to another level; rinse, repeat, you get the idea. Outside of the drop last week, it’s been weeks [as in “many”] since the index has seen any kind of up/down trading action. This is truly pathetic, thank you very much Fed Pie Holes.
And now that manipulators like the SNB have bid the stuff up today on terrible economic news [what else is new?], and are sitting with bids below the market, you be the first one to start hitting the bids and see where it gets you … and that’s the problem, cuz there isn’t anybody who is going to “take the lead”, and therefore we sit. “Why hit the bid, when tomorrow they are more than likely to raise their bids yet again; so if you want to sell, simply wait for the bids to show up tomorrow at a higher price … duhhhhh”.
Since a few minutes after the open, and since I liquidated my long position, we haven’t moved ±20 Dow30 points, and I’m wondering besides a selling panic with sell stops, what’s going to make this stuff move … cuz it isn’t. Except when the bids get pulled, what makes it move? Right now, I’m startin’ to wonder. Meanwhile, in the real world, things that are supposed to affect & influence stock prices don’t; nothing matters except the central banks priorities and stock buying; news doesn’t matter … it never did, but now at least it’s obvious to all.
Of course, making the day a complete confusing clusterfark, now the Dow30 is making a new high and the SP500 is nowhere near its earlier high; I guess somebody thought the Dow30 was “cheap” all of a sudden, so why not bid it up? Earlier I wrote about the slow, glacial bid up; you can’t buy it and you sure as hell can’t sell it … it makes for impossible trading conditions simply because there is no movement, and nothing tells you where support or resistance is that has any meaning. And what makes the Dow30 “all of a sudden” want to rally 10 points while nothing is happening? Easy Peezee: the SNB raises their bids for Apple and a couple of other Dow30 stocks.
For the life of me, I don’t know why the SNB feels like they have to “pay up” for these mega giant companies; simply wait for the panic sells and buy the offers. But when you stand there and telegraph to the entire world you are buying, it all sounds pretty stupid to me; almost counter productive. “Just because you run the ‘CNTRL-P’ button doesn’t make you a genius. At some point, and I think we’re close, all of what they are doing becomes totally unproductive [at a minimum] and quite possibly very damaging, and at some point, in the future leads to a total collapse of the market. It’s not a question of ‘if’, it’s a question of ‘when’, and that is very tricky if not impossible scenario to predict.
What I do know, is not to buy on break out rallies, or sell on break out breaks … you simply have to have the patience & discipline not to care what the index value is at any given moment in time; yes, your future is tied to the value, but that value is a date that is as of yet undetermined, so what’s the point of caring where it’s at any time soon? As I stated the other day, it’s all about the “setup” … and without the proper setup, nothing will work!
Here we are half hour before the close, and really … put this puppy out of its misery and close this stuff … wandering aimlessly in the low 70’s after hitting it’s high in the Chicago Noon hour, something I have repeatedly told people means 90% probability of no new high in the last 2 hours … so it should be no surprise the market did not go anywhere. Simply put, over the course of the day, literally no breaks to buy. The one trade I did do made a few pennies, but it was essentially a scalp due to the fact the Dow30 wouldn’t rally as the SP500 & NDX100 were racing to new highs; talk about a “red flag”, this was it. All in all, another pathetic trading day all around the MT4, with nothing really happening anywhere but crude oil, and that was very early in the day. So, tomorrow is another day, and we’ll see what happens.
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Time for the beach … the dog and I are outta here … until tomorrow.
Have a great day everybody!
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