ES SHENANIGANS?

I am fairly sure I was one of the first but not the first to start openly talking about the PPT and their manipulation of the Stock Indexes. I was made aware of this by one of my original teachers and once I learned about it seeing the patterns and the buy programs that made no sense became pretty easy.

It used to be that the discount and premium to the cash market was monitored closely by the big funds and they would launch programs to take advantage of displacements when they got out of whack from one another. They happened at regular times usually 10:30, 11:00 and sometimes 11:30 am PST. You could often see them coming and could front run them once you got the hang of it. The first major change I remember seeing was during the Bush/Gore fiasco in the courts when the stories came out. It has been the function of the PPT since long before that to show up on big down days to try to do late day saves. Often these attempts succeeded. Back in these days volume would give them away. This has changed.

The strategy now appears to be to wait for very light volume times where the price can be moved while spending less money to do it. Ironically the government is finally cutting spending, who would have thought it would be here? They let the moves drift until the volume dries up then out of the blue it moves. These moves often come with no meaningful displacement between cash and futures which tells us it is not the normal suspects and some other "unknown" buyer. It is interesting for someone who has been watching intra day price action for so long, to see this play out this way.

In the 5 minute chart above I see no obvious manipulation by the way I would normally spot it yet I do suspect that during these days it has gone on because of the big dips that were reversed. To be clear not every dip that ever happens in stocks is reversed by manipulation, that is not true. There is an upward bias to the stock market in general. We also currently have a very strong trend, so buying dips is the normal prudent approach to take during times like this. It does not matter what causes the trend, the trend is there and you need to be in sync with it. I will never forget reading an article several years ago that was written about short sellers in a big bull market and how they were actually right and the market was wrong. Really? I beg to differ. The markets are always right and it is we who are wrong when we are not in sync with it.

Shorting markets like this is very tough. There is most likely a sharp break out there that would be very lucrative to be involved with when it comes. However, it is not a great probability play to try day after day to fade a trend this strong. Pick your poison.

I would like to see a bounce in Cotton for a short just as a heads up for one market I am watching. I do have short term sell indications in the indexes but the chart pattern here is unclear to me.