mtzianos wrote: They'd could just intervene at key points of perceived support or resistance, and/or pump some money, create momentum, "send the message" and let rest of market participants carry on. Or maybe just buy the futures themselves. Especially when short-interest is at these high levels and squeezing the shorts will fuel the rise. Exactly my point! Fifteen years ago the FED could control a market, not now. Selling at key resistance levels and buying a key support levels, they could control it. Now, they can only intervene, as you say, to send a message. I am certain the FED started fighting the stock market in 1998 to no avail. They had lost control to the dot com and telecom buying frenzy: The New Age. However, today all governements intervene in their markets to help stabilize them. They are part of the equation of mass psychology. Governments, speculators, investors and even swing traders add to the psychological 'collective' of the markets. This is how one interprets overall market trend: measuring the 'collective' investment sentiment. Tony
Here's another take on the issue of US gov intervention in the stock market: http://www.sprott.com/pdf/pressrelease/TheVisibleHand.pdf
Excellent report! Yes we all know that they intervene from time to time to create stability in the markets. I did mention that in 1990 they could actually manipulate markets. Also, everyone knows there is currency intervention, right? However, I totally disagree with the Sprott conclusion. Do they really want to leave the markets to the whims of swing traders, day traders, speculators and hedge fund managers, who account for most of the volume? Who would love nothing better than maximum volatility every single day. If it ain't broke, don't fix it! Thank you Tony
Why shouldn't the market go up for a least awhile. There will be probably 10- 20 billion dollar infusion in the next couple of months. I guess the key is if the 10yr bond holds up. China's got to put it's money somewhere and of course we'll get the old 30 yr percolating again. Why not up.
Hi Stocon, My point is the markets are a discounting tool. They forecast where they are heading before they get there. The fundamental reasoning is not normally known ahead of time. Yet the 'collective mind' of the market knows. It's an amazing phenomenon to watch, as I have doing for decades. Thank you for your response Tony
Its like a communist country, but we can still protest. Free markets thats a joke, no more opportunities of a lifetime for investors, the government wont let the markets fall to create theses opportunities of a lifetime.
I was just kidding about government manipulating markets. I do think banks do it though. The government really doesn't have to manipulate the market, they just step in and bail out all the banks after each crash/blowup. With hedge funds maketing trillion dollar bets, it's in every bank's self interest to prop up the market long enough till most funds get out of their long positions - then let it drop. I think all they have to do is make sure the major support levels hold and step in to take out the major resistance levels. This is really a blessing in disquise - there providing a lot of liquidity, and allowing more time for everyone to start getting short. Just imagine coming in one of the days last week and the market gaps down 10%+ - who really benefits from that except the short-term countertrend guys cause the long term trend remains up.