"Someone" [Jul 14: Our Gospel is Spreading - Jim Cramer References "The Hand"] found it in their power to drive up this thin market, from a 4% drop from noon to 3 PM, to a 4% rally from 3 Pm to 4 PM. I'm sure a bevy of hedge fund managers decided yet again it was a great time to get into the market at that exact moment ;)
And another 8% round trip for the day with with someone wanting to come in in the last 30-60 minutes and buy just as we are about to fall off the cliff (remember the close is what matters, not the intraday trade) Hmmm... wonder how that happened. I haven't seen *that one* before (like every 3rd day lately) I assume the same technical charts are found in D.C. as everything is based on technicals nowadays since fundamentals have become such a moot point. Really makes you question the validity of the casino... ah well, the market is saved again - I guess the quadruple bottom is the new hot thing in technical charts.Miracles never do end around here.... ah well, free markets prices will one day return I suppose. For now, we can look forward to the ever elusive quintuple bottom next time around. Sextuplet bottom after? A certain someone clearly does not want us closing below 840, that's for certain...hanging by skin of teeth...
p.s. the advance decline on the NYSE was 35% up/65% down - yet NYSE rallies 1.8% - yep, that's legit.
7 comments:
I don't get why people focus on PPT or other magical external forces. Even if there was any significant force out there, the market will work its way to where it belongs. I honestly do not think the government is behind all this. The market is emotional and driven solely by momentum, quant funds, day traders. There is no rational here, so people just try to point figures at others in order to explain these moves.
Could be
Could just be magic
I'd point to an intraday chart on the Monday after Bear Stearns and try to come up with an explanation.
There is no magical external forces - the PPT is in part made to support markets in times of distress with purchases
I believe this a time of distress ;)
But again, I love the post Bear Stearns Monday chart - market by every technical measure known should of broken down intraday - hit the same spot, over and over, and over and over all day - I don't think it was quants or daytraders in there buying to support a market when every program, book, life lesson in the market says that level should break.
That day will stay with me forever since the trading was so abnormal. It wasn't the only day.
Market was oversold so people bought. Smart money supposedly plays in the last hour. Maybe they think the auto bailouts will get resolved. Saw an interesting chart the other day where focusing on the first 30 minutes and the last hour you'll see that the dumb money has become very negative and the smart money is now very positive. Maybe this is just a continuation of that pattern.
I find terminology like "oversold" so overused
The market rallied intraday about 10% Thursday. Now, 3 days later its "oversold". Hardly. The only oversold period was early October and the market still kept selling off.
Most days people try to fit a narrative to fit the market action. billions of individual decisions are made, and a narrative is made
As for smart money, do you mean the ones down 30% for the year? I think most of retail is out of the market - do you think mom and pop is in there buying at 9:35 ? No, most of them are gone.
Again, these are just narratives to explain the most random period in our history - ask the computers what they are doing.
Mark you are onto it. You're in the know, stay that way.
The market will be oversold when every commodity stock (who's company keeps turning a profit, but who's stock keeps crashing) is at zero.
That's my rational for the insanity that is our current stock market.
Believing in nothing has set me free as a day trader.
To the doubters, let's see what the Fed says about the PPT:
According to John Crudele of the New York Post, the Plunge Protection Team's (PPT) modus operandi was revealed by a former member of the Federal Reserve Board, Robert Heller. Heller said that disasters could be mitigated by “buying market averages in the futures market, thus stabilizing the market as a whole.”
Since the Fed openly manipulates the money supply every day in transactions that everyone can see, in order for the Fed to hide the activity of the PPT, they would have to take out liquidity by selling treasury notes. Otherwise, the numbers at the end of the day or week would not add up, and someone would notice.
Since the Fed is the “main resource” for buying averages in the futures market the money is injected into markets via the New York Fed's Repo desk, which easily showed up in the M-3. This may explain why the Federal Reserve mysteriously decided to stop publishing its M-3 report.
http://www.gamingthemarket.com/2008/07/front-running-systemic-market-crash-ppt.html
I've come across several blogs and articles that suggest the hedgies are using their cash reserves (meant to ay off redemtions) for short term trading, which might explain the present volatility. It make some sense if most funds have already cashed out ready to pay out. jegan
This is link to one of them:
http://www.bullbeartrader.com/2008/11/is-daily-hedge-fund-trading-and-not.html
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