Quadruple witching day for stocks,options,futures,and commodities kicks off with a big lie, concerning housing starts, Core CPI.  Of course these govt. figures will all be adjusted next month when no one is looking. Did you  know that it was also time to re-balance, re-distribute, the stocks in the current indies,… sp500, rus2k, and to throw the bad performing bank stocks out of the index.  Of course it is all in the interest of “fairness”, with respect that the markets are being propped up by the Federal Reserves’ plunge protection team.

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The “plunge protection team” has been busy buying the dollar, causing the dollar index to rally 4.5% for the last 18 days.  It will be time for the currency traders to take their profits before the national disastrous health plan bill is passed.   Any sane person who votes for the destruction of the u.s. economy, by putting bureaucrats in charge of 1/5 of the economy should be tried for treason.  I mean, the excellent track record of the govt managing  private business is 100%… for losing money.   Am-track, medicare,social security, Fannie Mae/Freddie mac/Sally Mae,war of poverty, war on drugs, border control, immigration, tax collections, education, Tarp.  How about the missing billions from the Stimulus Bill… they can’t even spend without losing some of it. …. I can’t think of one thing the govt bureaucrats have managed better than a private business, can you?

In other news, Shockingly “helicopter Ben”  Ben Bernanke was named “man of the year” by Times..oh.. excuse me… Person of the Year. (p/c )  The category of “runner  up” included :  General McChrystal, A Jamaican Sprinter, Nancy Pelosi, and… The “Chinese Worker” who were the slaves to the American consumer and are now owners of the American people’s debt.  When Tiny Tim Geithner visited china early this year, he told a group of Chinese business students that America could grow our economy fast enough to pay off the 11  trillion dollars in debt…. the roundly laugh at the idiot tax cheater.  I challenge you to find the laugh track anywhere on the news channels.

Now the Geniuses in Congress, raised this year debt ceiling to `14 trillion plus dollars.   Now, my 3rd grade education, says that if our GDP is 15 trillion and our debt is 14 trillion… no way in hell can we ever pay off this amount of debt.  Can you?  If your credit card debt is equal to your income, could you ever pay of the debt?

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Obama ticks off the Chinese, during a special meeting with Obama and Hilary at copenhaus global climate change meeting, only 3 low level government officials attending . Meanwhile, “Ben Burn-ake” was printing more money, so Hillary could pledges another 100 billion, to give to the false religion of “Global Climate Change.” Addding more fuel to the  burning dollar’s collapse and causing more pain to the American worker through higher deficits.  Mother nature  gets it’s revenge on  Copenhagen  and Washington by dumping a blizzard on both, cooling the urgency for global warming.

This time next year, just remember why you voted for OBAMA, JUST SING ALONG WHILE YOU ARE OUT LOOKING FOR A JOB!

Related articles I found:

• More Good Economic News (Is Helicopter Ben Listening?) (kudlowsmoneypolitics.blogspot.com)
• Mean Street: A Sham GDP for a Sham Economy (blogs.wsj.com)
• Bernanke is Time’s Person of the Year [News Bits] (austinist.com)

Technorati Tags: Ben Bernanke, Global warming, plunge protection team

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God Bless America

Doctrader

The Butterfly Effect.

Being ahead of the curve means that sometimes you have to exercise patients. Six months ago I wrote about program trading and it effects on the market. Nothing has changed with over 50% of the daily volume ruled by program trading. Today market commentary mentioned program trading as the cause for the triple digit drop in the market. I warned long term investors about the “IDES of MARCH“, which happens on 3-8-04 thru 3-24-04 causing the sp500 index to drop 69 points and the Dow index to drop 671 points.
While some would say program trading was the cause, why isn’t program trading to blame for inflating the market? The precipitous drop only violated the 50 day moving averages in 2004. Meanwhile, there was ample support at the 200 day moving averages for the market to recover the lost ground in 2004

This year, 2005, program trading is still ruling the market. During the IDES of MARCH, the Dow dropped only 493. The sp500 dropped only 53 points. Unlike 2004, this market continued it’s drop hugging the 200 day moving average for 9 more days, then dropping another 3% for the sp500 and 4% for the Dow. The FED is still behind the curve, always, still raising interest rates. Alan is playing his clarinet keeping the market bubble from popping until his retirement. Oil has broken the $65 a barrel price tag, gold is climbing higher and the CBOE’s Vix is breaking above the 200 day moving average. I have watched the Fed’s “plunge protection team” supporting the market with buying sp500 futures, causing the market to miraculously rebound from a losing session to preserve the “technical indicators”.

Today’s FED plunge protection team couldn’t save the market today, and maybe they won’t save the market until September comes along. I know the market is very choppy with computer program trading buying and selling, base only on the number of points in the indicies. There is definitely a lack of retail buyers in the market, a sure sign that we could be heading for a 1987 crash. Notice how we have not hit the trading curbs like we did often in 98, 99, and 2000? You know why? Program trading is restricted to less than 10k shares and that will cause these money managers to be locked out of the market. If you are a money manager sitting on a million shares, it will take a long time to sell those shares only selling 9999 shares at time. You also can’t buy and extra million shares to dollar cost average your holding when the market has hit the curbs. The NYSE has some interesting stats if you have time to dig around in this massive site. The important link is this one if you are day trading or a long term investor. program trading
So a butterfly flaps it’s wings in Venezuela, causing a tropical storm to become a hurricane, heading for the oil wells in the gulf, oil prices skyrocket with labor day, back to school, and northeast heating oil production begins siphoning off limited supply of gasoline. Meanwhile, the Fed will hike interest rates another quarter point, causing massive re-financing, home prices dropping, banks margins get smaller like 1929, and so on….

Or the butterfly dies because of the pesticides they are spraying to kill the west Nile virus, there are no more tropical storms, we strike oil in Anwar and the caribou population explodes to record level due to the warm pipeline which keeps them warm in the cold winters. Iraqi vote for a constitution, and there begin pumping and dumping more oil in the market causing oil price to plummet to $30 a barrel. Intel invents a completely new chip, make all computers obsolete. There is a national sales tax and not income taxes, stocks begin to pay dividends, because earnings mean nothing if you are a long term holder stocks unless they pay you for your loyalty. Program trading will be banned, illegal immigrants will buy your parents homes for double their current value, causing a new baby boomer generation of Spanish speaking citizens. There will be peace and prosperity in the middle east.

Or….????

God Bless

Doc
www.doctrader.com

Technorati Tags: Butterfly Effect, Harmonic, plunge protection team, programmed trading, technical analysis

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What can I say, it has never happened before, either we are in one of the biggest up swings on the market, or we are on the verge of one of the biggest crashes in history. The harmonic heartbeat is declining, which would point to an upsurge in the market indices, but we have not moved very high off the lows. The harmonic heartbeat indicator is a contrarian indicator, by it’s low reading, we should expect the market to move sharply down with an expanding intra day trading range. However, the market is stalled, by the June 30th deadline in Iraq and the Fed meeting. Soon, the major players will be off to the Hampton’s, enjoying either their shorts or longs until summer is over. If the market has had 6 straight weeks of 50% or more program trading, what will happen when you remove 50% of the last 6 weeks of volume? I have seen many stock newsletter writers say that now is the time to buy, maybe their readership will replace the 50% of the volume when the program trading falls back to normal. In any case, we can only guess what will happen when earning warnings begin this week. Stay tuned for instructions on how to protect your profits. If you are trader, it will be dangerous to “short” DUE TO LOW VOLUME AND THE PLUNGE PROTECTION TEAM. The powers to be have decided that, for now, the market will remain above 10k, at least until the June 30th deadline.

God Bless

Doc

Technorati Tags: 6th week, market, plunge protection team, programmed trading, stocks, street, wall

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