SOMETHING I FOUND INTERESTING
The most significant factor about this immediate convenient “magic rally” of about 90 points off the 1074.77 low is that 70% of the rally came in the last 50 min on Tues [44 points], +8 points in the last 35 min on Wed, and about +11 points in the last 35 min today. It certainly looks as if the PPT was involved in pushing this rally, because the last thing the Obama gang needs right now is a significant market collapse, which would seal the deal for making him a one term President.
This is a quote from Kevin Haggerty out of the trading markets website commentary he posted last week. He is one of my early in my career mentors, and the person who first made me aware of the PPT and what they do. This goes back many years, way before even the Bush Administration. I am not picking on Barry for this, it did not start under his watch, and he utilizes this tool just like any other president in the past would in this situation. I did mention the other day that the huge reversal was suspect because of when it happened, but I was not completely sure simply because it also occurred at an obvious reversal zone. Kevin understands what they do better than anyone, for reasons I will not get into here. Simply stated, he does not allege this, he knows it happens and how they do it.
This brings us to a broader question. If in fact this was them, which is hard to dispute based on that 3 day scenario, which I really had not been aware of, can they reverse this whole thing down here? I have stated in general that the PPT needs a couple of conditions in place to reverse market slides. The first and foremost requirement, is low volume. Just the shear dollars required to reverse a 200 point down day is in the billions. We know they seem to have endless money, via the printing option they have. However, the public seems to be growing weary of money printing finally. Further, the balance sheet of the FED at this point is massive. Adding hundreds of billions in futures positions to it is probably not a prudent move by them at this point. In spite of the publics growing contempt, they have shown no inclination to pay any attention to that whatsoever. As a result, net net, they are going to do what they do regardless of what we think. If you have not figured that out yet, you should wake up.
The rumor has been that they "house" these trades and positions at Goldman and JP Morgan. I have no proof of that whatsoever. I have just been told this by someone. It does seem to make sense to me if you just watch the nefarious relationship the government seems to have with these two firms. It really does not matter, and unfortunately as we trade we can do nothing about these interventions. I am not sure that they do anything other than make short trades choppier. When the big volume selling hits, you can often see their attempts fail time after time. They are obvious most of the time when they show up.
One thing they can do, which is more effective than these late day buy programs they launch where they catch everyone sleeping, then cause a ton of short covering into the closes, is the QE stuff. This is a broad based approach that keeps a bid under the market. Let's just theorize for a moment that they decide to do something like this in the next couple of weeks. We know as Kevin states, that politically, Barry is DOA if the stock market really tanks here. We also know that the manipulators are well aware of this also. Therefore, if I were them, this is a great spot to launch a large "lift the market" attempt again. We are at the time of the year where at the end of this month the market typically makes a low. We are also at a time in the Presidential Cycle kicks in during year 3. They have plenty of cover here to commit the crime. Of course it is really not determined if in fact it is one or not, that is a tongue in cheek comment.
Where I think the PPT makes mistakes is when they do their buy programs. I think if they had a trader advising them, they could launch them at times that would be a bit less suspicious than the last 30 to 60 minutes every day. Nonetheless, we have them operating, and in this case I think they are going to come in handy. Let's revisit the mystery chart once again here. I know it might be aggravating to not know exactly what this is. My apologies for that but I have to keep some things to myself. This is someone else's idea, and I do not feel it is right to freely expose it. The next two charts are just the same thing going back in time to show how this continues to be incredibly "dead on balls accurate."
Look at how incredibly accurate this has called the swings. I have come across many things over the years that had a "look back" feature that were as promising as this, that turned out to be a bust. The difference with this is that these turns are projected one year in advance. The red line is activity forwarded 52 bars. This turn date here this past week was known 1 year ago!
The above chart shows this back another several years, again showing incredible accuracy. I think at this point we have to give this some credibility. I did find one miss, the 95 rally. We know years ending in 5 have rallied every time in history, so I think that was one we could have reasonably ignored this and gone long. It caught the 87 top and bottom, just overall this is quite a tool. It says we rally out of here now and when that is combined with the PPT showing increased interest now, the Presidential Cycle being here, the fall low point basically here, we need to buy dips here.
If we go by this model it tells us to hold the longs into the beginning of March.
Get your buy plan ready, the next dip should be our entry spot, lets hope it is a big one.