Discussion in 'Wall St. News' started by trade2live, Oct 14, 2011.
What's with this rally out of nowhere that doesn't want to stop ?
Markets up over 10% in one week!
Thats pretty wild, this is just a bear market rally, how many hundreds of times have we seen the markets break out like this, rally for a few months and drop straight back down. There is absolutely no reason to chase this market, you will realize that when you are able to buy the SPX back under 1100, DO NOT CHASE this market. Markets fall quicker than they rise.
A damn fucking good question!
No, the Fed doesn't buy stocks. Stocks crashed in the first place because of concerns that the European debt crisis would cause massive bank failures. Stocks are rallying now because the market has judged that the Europeans will paper over the Greek losses and probably keep things limping along for another year. (The European debt crisis will then reappear and the stock market will crash again.)
Of course the American debt crisis is looming over the horizon, but since we can print the money the resolution of our debt crisis will probably take the form of massive inflation rather than failing banks.
What Europe is doing is just a quick fix, just like the one they did here int he US, they figure lets release these programs, bailout the losers and keep spending money until the crisis just magically disappears, what they fail to understand is that this credit crisis still exists, its not going away anytime soon.
The market started falling on the US downgrade if I recall.
I wouldn't be so sure about the Fed not being involved, it's pretty clear Bernake is up for anything and desperate.
Some people say they were buying in the second part of 09, if that's the case , why wouldn't he do it again ?
Some people say Britney Spears is an extra-terrestrial alien...
I don't necessarily think that it's micro managed, but I do think that a few well timed "floor supports" can easily do the trick with a market that had the highest short interest in numerous years, not to mention the overall illiquidity of these markets. Throw in the beginning of a new quarter and it was a powder keg about to explode.
Once upon a time not too long ago, big investors left the US and moved overseas
Now these same institutions may be unwinding their overseas positions and bringing it back to the US (less a flight to quality, than it is a flight to less turmoil)
Weâre also near the 30 yr bond cycle (probably not much upside left) â eventually that money will need to go somewhere
The result is â there is a lot of money that needs rolled over â and that takes timeâ¦.
Hence weâre moving away from the recent lows
Question is; do we keep moving away from that recent low, and possibly into a side ways trend, (till the uncertainty clears, the money is rolled, and a direction is identified (which will bring the new money)â¦, or revisit it
If we get through Oct/ early Nov, without making a new low, then revisiting the lows becomes less likely, not impossible, just less likely (lot going on in 012 that is not conducive to shorts)
But if we see 1100 S&P â then I imagine the fear will kick into overdriveâ¦ and remain till the buyers looking for cheap ass deals step up
The above is one possibilityâ¦ the other...
The PPT is working overtime â but then some doubt the PPT even exists (Iâm not one of them â but I do doubt itâs them)
Just an opinionâ¦, nothing more
Bottom line â Always follow the money
Operation Twist is just another name for QEIII.
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