The Most Crucial Time of Day for Bulls 27 comments
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Watch the last 30 minutes…
Through this year and the last, the last 30 minutes of trading has been a critical point for manipulation. Countless times the market has shown signs of breaking below critical resistance points, only to have stocks rally sharply in the final 30 minutes of trading. Indeed, there were even several days in which stocks actually reversed losses to close at a gain all in the final 10 minutes.
This is not coincidence.
As I’ve noted countless times on these pages, this market is being manipulated… heavily. And these last-minute rallies have come at the hands of JP Morgan, Goldman Sachs, and other large Wall Street firms. I know personally of at least two instances in the last two weeks in which JP Morgan stepped in and bought 1,000 S&P 500 futures at critical points, pushing the market higher just when it looked about to break-down.
You can see this in the chart below of the S&P 500. Stocks staged late day rallies on August 6th, 10th, 11th, 13th, 14th, and 17th (that’s only the last two weeks) The most critical rallies came on the 10th and 11th. Without those, the S&P 500 clearly was heading for 980 in a very rapid fashion.
It’s important to note that this late day manipulation can only last as long as there are equity bulls who believe in it. That is, buying a ton of futures only kicks off a rally in stocks if there are enough stock bulls who believe that someone in the futures market knows something they don’t. Much like in poker, you can only run the table when you’ve got a patsy or two to pony up the cash.
And the stock market ran out of patsies last week.
The above chart shows the S&P 500’s daily action in one-minute increments. As you can see, traders shot for late-day rallies on both the 17th and the 18th. Both days, they failed to get enough bulls to buy into the manipulation (stocks rolled over in the final minutes). They did manage to stage a major rally at the end of the week, thanks largely to options expiration and Bailout Ben pumping $46 billion into the system.
However, now with options expiration out the way… and in light of the turnaround to the downside, I’d argue that:
1) The bulls are out of steam.
2) Reality is taking hold.
Stocks are severely overbought now. And yesterday’s turn-around collapse looks to be a herald of things to come. I wouldn’t be surprised to see the S&P 500 back at 980 very shortly.
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Yes, you guys are right, there are patterns to observe and they smack of "manipulation." But is it manipulation or "short-term trading," albeit the "short-term" may be 1/4 of a second.
GS has a way to shave a small amount off the top and now MS wants to match them. Good for them. These computers aren't all that mysterious. Last year they were selling into the close. This year they are buying. They will continue to do so for some time.
We're being set up by the quant traders.
They'll soon be looking to short the market.
Looks like the futures are now green so we might get another pop this morning...
The link between the economy and the stock market rungs through the pivot of the cost of money and the availability of money.
Economy performance is only used to rationalize this relationship.
Cheap money leads to high stock prices.
Paper money is now as plentiful as it has ever been.
The Obama administration wants to ignite animal spirits to keep the economy moving. They have put the cart before the horse; people spend when they have money; this is the first time in recent history that almost the entire population is broke.
PPT or reality market.
Stay tuned the show is about to start, right after a few words from our sponsor helicopter Ben.
On Aug 25 09:40 AM Michael Clark wrote:
> Or is it the Fed's fund to keep the market from sinking kicking in,
> to keep the 'bull market' going? This is the biggest fix since Ali-Liston.
On Aug 25 09:48 AM Michael Clark wrote:
> Of course the Fed's 'fund' I'm talking about....is tax-payer money
> given to Goldman Sachs, et.al, as a part of some agreement with a
> plan to keep the stock market bubble expanding. The manipulation
> must be coming right out of Bernanke's and Geitehner's office, implemented
> by GS and all their Wall Street cronnies.
On Aug 25 09:40 AM Michael Clark wrote:
> Or is it the Fed's fund to keep the market from sinking kicking in,
> to keep the 'bull market' going? This is the biggest fix since Ali-Liston.
They would like to keep stocks up , possibly because of their now extremely cozy relationship with Wall Street. Secondly because of fear for their political lives. They have spent Trillions to "save the critical financial markets".
Scott Rasmussen of Rasmussen polling called it publicly before the stock market crash. If the economy is the main concern Democrat win, if it is national security Republicans win. A stock market crash meant a Democrat win. If the stock market does not come back before 2010 the Democrats will get slaughtered!!
On Aug 26 12:22 AM realold wrote:
> You guys talk like you know what you say. But, it would seem to me
> that the Fed, et al, would be most concerned with the price of treasuries,
> not stocks. Keeping interest rates down would seem a rational goal
> to help the economy in the short run. Keeping stocks up for what?
> Just looking for some rationale behind your convictions.
Which I have no intention of looking at, given the very negative feedback I have heard to date.
On Aug 25 05:26 PM WAKEUP wrote:
> Your mama keeps going up.
On Aug 25 08:35 AM BPYHO wrote:
> Yes, great article, the ONLY time I have made $$ the past 45 days
> is buying before our now traditional late day run-up and selling
> right before the bell. Other than that I started shorting everything
> early July on the premise that although I knew companies would beat
> their crappy expectations the view taken would be,"things getting
> less bad does not equal a big improvement" and it would kill our
> huge rally we've had. I was completely wrong and it has cost me dearly....
> THerefore I have lightened my shorts and now just daytrade (while
> I am on break from school) making sure I am liquid at the end of
> the day. Can't afford to heavily short this market any longer....
This is THE method of Greenspan-Bernanke and has been all along. Why is this so hard to comprehend?
The Fed is using its 'own' money to buy treasuries in the open market to keep interest rates from rising. Yes. That is their day-to-day concern.
Do you think Bernanke and Geithner are not working with money-centers to try to manage the depression?
Keeping stocks up? Why? Are you kidding? So consumers all over the world can have more confidence, so they can make money through stocks that they can channel into a new car or a new house. So they won't march in the streets and burn buildings and demand an end to government officials who created an economic depression. These guys want to save their own jobs, their own asses, and their own pocketbooks.
On Aug 26 12:22 AM realold wrote:
> You guys talk like you know what you say. But, it would seem to
> me that the Fed, et al, would be most concerned with the price of
> treasuries, not stocks. Keeping interest rates down would seem a
> rational goal to help the economy in the short run. Keeping stocks
> up for what? Just looking for some rationale behind your convictions.
>
GS and MS and others could be going all in on every hand regardless of their cards.
With an unlimited stack of chips, they could be at this table for a long time, regardless of the cards that they are being dealt.
There is still time for a major correction before staging another rally without losing total confidence as long as the Talking Heads will lend a hand in justifying the pull back as necessary for a sustainable, "real" bull market to be launch (which they will).
And then they will be able to sustain the bull because most of us will be ready to join in the fun off the bottom. When no one is left behind, the bull will charge ahead with less resistance.
And we all know that GS, MS, etc. know how to make money shorting the market just as easily as when buying. If you really think about it, there will be much more profit for them if they let the market drop one more time making money all the way down and loading up again at the bottom.
I don't think you're giving them the credit they deserve. We're all being played like fiddles and we're only near the end of the first movement of a symphony containing three movements. Just make sure you're playing the harmony part at the start of the last movement (3rd) probably in the early months of 2010.
Remember: These guys are driven by greed and nothing else. Why would they not take advantage of this huge opportunity?