So far no entries following up on my alert on Saturday
Here is the Russell 2000 Index and as you can see Friday's low did not get taken out yesterday, so there was no short entry for me. I also do you see one for today, but I am watching this closely here to see if one sets up. As I listen and observe what is happening in the foreclosure business, it seems eerily similar to the financial markets. It is my understanding that foreclosures in the legal system are state matters not federal. Yet Barry and company move on. Do they truly think the laws have no application to them? Apparently so. Keeping power is worth breaking the law.
Well here he goes again I bet some people are thinking, but hang on for a moment. This is relevant because what he and his minions the PPT are doing in regard to the stock market is exactly the same. If you and I were able to manipulate the stock market they way they are ( if we had the power ), we would all be thrown in jail on a number of different charges. It is just shocking to me that more people are not completely up in arms over this. This is completely unbalanced, and will lead to a monster crash at some point. As long as volume stays so light their games work, but if we ever get a big selling wave, they will not be able to stop it and it is why these "flash crash" types of things keep coming up. The market is being kept artificially away from it's true equilibrium level.
However, this needs to be kept in mind because in the near term you can literally buy any dip of 30 minutes or less knowing the PPT will come in with buy programs to prop it back up. Once the mid term elections are over, I expect this to change quite a bit. Net net, I think longs are correct but you need to have an exit strategy with a short leash, and don't go to sleep without having it in place every night. We might just sail along, but there is going to be a day where you will wake up and we will open down heavily and just roll like the infamous day earlier this year. History has shown us time and time again, that artificially forces prices to certain places does not work in the long run and creates large counter reactions. Can you say real estate?
Also you can look back in time at a lumber chart where the government tried to artificially keep the price down and the explosion that took place there. Oil and it's crash, another manipulation of price. Gold will befall this fate as well at some point.
I will continue to watch for a sell signal here but don't have high hopes for it. I have never in my 20 + years of trading seen anything like this, so I guess this is a new horizon. Who knows if in 2 years when Barry gets kicked to the curb if the new leader won't continue the same game. If he gets away with this for that much longer we will be in new all time high ground in stocks, and I doubt the new guy would want to be the guy who presided over the implosion. Time will tell.
In the meantime, there is one other development that might give us a hint on where stocks are going. My apologies, my genesis software just imploded so I can't get a chart in here. It was going to be of the Dollar Index and how it appears to be possibly putting in a low.