WHO ARE THESE PEOPLE?
One of the great Seinfeld phrases that rings in my head when I see things like this is the above post title. I mentioned in the last post how often this exact scenario seems to happen. The dumbest money in the markets has to be the short sellers in the first 30 minutes of the Sunday globex session. How many times have we seen this type of reversal off weakness on Sunday's? The only exception is when we have a very strong down trend. The weak opens in those cases can at times follow through. There is a trade here for those willing to do their due diligence and study this pattern. I will get to it but I have so many things on my plate I just have not had time yet.
If we get another 4 with the current regime they may let these opens go since a re-election will not then be at stake when stock declines take place. There is really no way of knowing what these people are thinking exactly when they reverse declines. Also not every decline that rallies is the result of manipulation just some of them. It is my hypothesis that they have shifted to the night sessions because they can reverse moves and spend far less money doing it due to the light volume. I have no proof of any kind on this I am merely stating an opinion. I think most people now realize some of this is not legitimate so I don't really have to get too heavily into that aspect of things anymore. Just remember that I was one of the few who were out in front on this and willing to stick my neck out and state what is going on before it became main stream.
I am not a huge fan of day trading but when we see a pattern as prominent as what we see above, that is based in a fundamental, I do think it should be traded. You might argue that this is not a fundamental but I think it is. If we know there is one trader out there bigger than anyone else, has no position or liquidity limits of any kind, why wouldn't we want to follow what they are doing. Trading is all about getting edges and exploiting them. The governments interventions do represent an edge so we all should be using this. The trick with this is that you cannot just blindly buy at a certain time or day and magically take advantage of this. I have tested out a lot of these scenarios and it is not that simple.
It is also not as simple as just buying the ES every Sunday when it is down 5 points, this does not work either. I think in reality we can complain all we want about what should or should not be happening. However, our job as traders is to make money using what we have in front of us. If we see an edge regardless of whether it should or should not be happening we should trade it. Here is a real life example of something I am about to do.
I have had a bank account at B of A for a very very long time. I recently decided to call and ask a question about my debit card. I talked to two of the dumbest people I have ever spoken to in a customer service department. I thought to myself as I got off the phone that this is on me if I leave my money there and something happens. I got to thinking about what Bank should be the safest. I concluded after considering many things that it is JPM Chase. The main reason I concluded that is they clearly have some type of back door arrangement with the government. They get off scott free every time they seemingly do something wrong. They become secured creditors in bankruptcies when they should not be. It just seems that every time it is possible for them to get a great "break" they get one. Why complain just go with it. I am opening an account there soon and closing my long time B of A account. JPM Chase has an edge so I am not going to complain I am going to take advantage of it.
I have not been able to get back after my mission to make a killing shorting their stock but as I stated before that emotional goal is what wound up saving me in the PFG fiasco. Having a good chunk of money set aside in an equity account waiting to assault that stock is what kept me out of bankruptcy when PFG stole all my money. Some very good traders have not been so fortunate. When your money is frozen for this long and you make your living using it, surviving is very difficult. Many have not survived and the trustee runs his mouth complaining that people are criticizing him while he makes millions and others go bankrupt. Poor baby he has been so abused! I feel so bad for some traders I know whose lives this theft has caused irreparable harm to. In some ironic way I owe B of A one for being so repugnant that I hate them. That hatred saved me and my family. How is that for logic?
I don't think the PPT reversal today means anything in the bigger picture. I am still hoping for some weakness to show up in the next couple of weeks to setup a buy for a year end rally. I think the initial look now is to sell rallies in the short term. After that buying a dip for a longer hold should be the play.
Here is a chart I showed the other day stating that I had seen good declines in the past come from this type of look, Silver.
I hope some of you made some Hay here this has been a nice move so far and has surprisingly detached to some degree from the stock market. I am sure the two will come back in line with one another shortly. I am not sure in which fashion that will happen. Will stocks go down to catch up or will this rise to catch up?
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