OK, I'm going to give your inbox a rest for now before you report me for spamming. This appears to be what we've been looking for. We'll have to see how it reacts at support levels and watch the volume
Friday, September 3, 2010
False Breakout
OK, I'm going to give your inbox a rest for now before you report me for spamming. This appears to be what we've been looking for. We'll have to see how it reacts at support levels and watch the volume
7 comments:
In Wisconsin we like to call this "unFarvingbelievable". Either we are missing something or there is news to break after the market. Not sure what, but sure make you wanna know if all those brokers the FED is hiring are also trading stocks now as well.
Jack,
Agreed. It's been well documented that the FED has been buying stocks and therefore propping up the market for quite a while now with their freshly printed money, all in the name of propaganda. I'm certainly not convinced that there are many 'retail' buyers in the market.
A disappointing day, and an end to a disappointing week really. The market finished near highs on good volume going into a long weekend. Doesn't look like convincing that stocks are going to plunge soon (i.e. early next week)?
As i said before, what's going to be the catalyst? After all we've had pretty big bad news and the market has rallied strong on estimate beats. What possible news could 'top' the recent bad news and therefore be the catalyst for a strong down turn?
In the last 3 days we've basically recovered the majority (a good 90%) of all the fall seen for the entire of August.
I think we need to see this bounce reversed early next week, otherwise it looks like it's more than a 'bounce' and this up-grind could go on for quite a while.
Is a sell-off early next week the most probable outcome Brandt despite the strong close to the day/week?
If the big boys are getting out and the FED is taking over, we all are gonna get screwed. The Fed is in a bind and can't let interest rates go up or their balance sheet takes it in the shorts. At the same time they need the stock market to remain stable or rising to give everyone the perception that all is ok. I must admit that it was terribly disappointing to see an up day.
Jack,
Well it's quite obvious that the psychological DOW 10,000 and S&P 1040 levels are being defended by all means possible for propoganda reasons.
Everytime it looks like the market is going to collapse down, there is a miraculous 'stick save', which reverses all the downside within a few days. It's been the same play all summer.
Any and every excuse is used to take the market higher... It's usually estimate beats on bad numbers (the numbers are still bad, just not as bad). If they can take the DOW up 400-500 points in a couple of days on 'bad estimate beats', what will they do when a good number is delivered? It looks like they are propping the markets up at all costs until good numbers come through.
There is no way on a Friday afternoon, in the last half an hour of trading going in to a long holiday weekend that it is retail buying stocks (and on good volume of too). If 3C is detecting institutions selling, then it must be the FED buying... what other explanations can there be? Who else has that sizeable funds to move the market so much?
Even Zerohedge has shown that there has currently been 17 consecutive weeks of mutual funds outflows:
http://www.zerohedge.com/article/can-you-hear-me-now-17th-weekly-fund-outflow-equity-fund-redemptions-accelerate
Is this the 'smart money' 3C picks up on? Well, despite huge outflows, the market has been running sideways all summer really.
BEN said they would do all they can and in unconventional ways to keep this going. Maybe he showing his hand.
I'm going to address all of this in a big post that's taking some time to put together.
As for FED TRADERS, ABSOLUTELY! In late 2008 we called it the PPT "Plunge Protection Team". There's no doubt that there are very good traders on staff at the Fed, we (David DT from TTW and I) traded together and it got to the point where we could call a surprise Fed policy announcement within 10 minutes. Every time the market reached the last support before breaking to new lows, the Fed would say something to support and rally the market so they have traders on staff.
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