NOT FOR THE FAINT OF HEART
Here is an intraday chart yesterday of the ES, and you can see the vintage PPT move once again. These guys are just the best there is, no question about it. Of course yours truly was short when they showed up. My entry was an overnight trade so I did not exit on the PPT move, but they did come reasonably close to stopping me out. This morning we have come back down so I suppose it is time for them to prop this back up again, and they probably will in the last hour if we are still down at that time. As I stated in the title, shorting this market is not for the faint of heart, it is groundhog day over and over. There is almost always an initial move that makes the market appear to break down, then the "mysterious" rallies that always happen.
It is very interesting to me, and I am surprised it does not get more press, that the Trim Tabs folks "cannot identify" where the moves are coming from. They track all sorts of categories as the premier tracker of various funds and their volume. They cannot explain in any of the categories, who is driving this. I think we all know who that is, and that is more anecdotal evidence about what I rail about in here constantly.
What is very interesting to me is the insider trading investigation that is now ongoing. Apparently this guy leading this did not get the memo, and he is dancing on dangerous ground here. Let's watch this and see if it fizzles. The ultimate insider trading has to be the investment banks that house the PPT trading accounts who execute their trades. Might they be front running the futures buy orders in individual stocks knowing the push is coming? I would certainly think they are, I would be if I were sitting in their shoes. They know huge volume is about to come into the market at certain times in futures, which will move all the premiums to areas that will generate institutional stock buy programs. Wouldn't it be a reasonable risk to take as a trader to buy across the board with a close stop, when the futures programs are just about to kick off? It is hard for the rat not the eat the cheese, as much as he may innately fear it is a risk. Somehow I doubt the insider trading investigation will ever get to this part of all of this scheme, TOO BAD.
I have no proof of any of this, but I think people can see the way things are happening, that something very irregular is going on here. The story is going to break some day, and Clouseau may have stumbled his way onto this. The damage control will be bellisimo if this story breaks. It probably won't, but if a very detailed investigation were truly undertaken, I think what is under the hood on the feds books would be must see TV. It might be like the CIA and be such that it is better if we don't really know.
Meanwhile back at the ranch, shorting this market has been an incredible challenge. I have been doing it only because my techniques say to do so, not because I am some wise guy or doomsayer. I just take the signals as they come up with some discretion of course. However, I cannot just ignore valid signals because I think the PPT is controlling the stock market. That is an opinion, not an objective filter. However, it is very difficult to make any money on the short side which should tell us something about the strength of this trend overall. I hope buy signals show up because shorting this market is impossible. We do have some seasonal up biases that should be kicking in here shortly. They have been pretty consistent over time. The individual days however that usually have been bullish in the SP 500 this month have not been accurate, nor have they been in the Bond Market. I used to rely very heavy on seasonals and do not use them much anymore. It does appear to me though just by watching every single dip of any kind get quickly bought, that dips in general are buys in this market not reasons to get overly excited about a big drop.
The fly in the ointment is the US Dollar which has been showing some strength. If that were to continue upward, we could have some bigger trouble with stocks. I have been long in the DX but do not have any real expectations either way in that, it is just another trade. In general I think this dip whether it lasts just a few hours or a few days is likely a buying opportunity and not a huge rollover.