PPT Manipulates the Market, Bureau of Labor Statistics Does the Same with Data
The odds have always favored the “casino,” but now we can say with a high degree of confidence that the US stock market is rigged at certain times.
SPX Will Hit New Highs Before Reversing
The Generals obviously put some new Q4 money to work Monday, and it was in the most oversold sectors. But they can play the average down game, they have deep pockets.
Negative October Bias on Top of New $US Dollar Lows
The actual inflation factor for the real-world necessities of life for the consumer, like food, energy, health insurance, education, property taxes, clothing, etc, is obviously much higher than the bogus CPI numbers put out by the government.
3rd Quarter Mark Up Will Set Up October Reversal
There has been no real buying pressure since that high last week, so anything we get these next 3 days is just a blatant mark up by the Generals and hedge funds into the end of the quarter.
Fed Loses Game of Chicken to Declining $US Dollar
Either the other markets will reverse and get in sync with the stock market, or the most likely scenario is that the stock market will reverse again and head south, as the $US Dollar comes under more selling pressure. The Fed action on 9/18 is a band-aid, and the credit, subprime and housing problems will continue to weigh on the markets, and the short-term game of chicken will most likely be won by a declining $US Dollar, not the Fed.
The Fed Choked and Decided to Inflate the Problem
The primary trading focus before the rate cut other than the major indexes and ETFs were the multinational energy and commodity stocks, in addition to some of the bigger technology stocks. After the rate cut, with the inflationary implications that go with it, there is more reason to maintain this focus.
Rate Cut, Option Expiration Plus Time Symmetry Equals Volatility This Week
This all adds up to what should be a very active daytrading week in the major indexes and ETFs. The primary individual stock focus should be on the blue chip multinational stocks, and also the energy, commodity and bigger technology growth stocks.
The Consistent Market Strategy
The trading focus continues to favor the energy, industrials, commodity and selected technology stocks. The underperformers, and consequently, the short candidates on pullbacks to declining EMA’s have been in the brokers, banks, retail, homebuilders and consumer discretionary stocks.
PPT Is Masterminding the ‘Game’ This Week
Unless the market turns its focus to the new lows in the $US Dollar, the PPT (Plunge Protection Team) will keep this market from selling off much before the President addresses the nation on Thursday, which precedes any Fed rate cut action next week.
A Market on the Ropes
The reality is that the business cycle has not gone away because of the “global economy,” and we will continue to have bull and bear markets.
Powerful 1st Hour Reversal Strategy
The tail (news) continues to wag the dog (market), and the price moves are very erratic because of the lack of electronic execution liquidity, as buy-side traders are all hitting the same algorithm buttons at the same time.
Traders’ Short-Term Reversal Zone
The unknown is how hard will the PPT (Plunge Protection Team) fight to keep that from happening before the 2008 elections. My bet is that they will start their election manipulation from lower lows, but it will accelerate a very tradable long move for position traders, as the Generals and hedge funds push hard to save performance for 2007.