Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Midnight Rider

Sleep a few hours and research a few hours.  It works.

Head a lot clearer and emotions of the trading day and life in general are muted.

Ok.  Status.

Power Elite premise for yankup.

China is so bad that now the Chinese will reverse and everything will again get good.

I mean Chase, is that not Orwellian thinkspeak in a near perfect form?  The Chinese in brute force fashion rammed through a stimulus in 2009 resulting in a massive glut of non purchasable or usable real estate and consuming massive amounts of commodities in the process.

The graft and corruption of a single party system insures that a nice chunk of that slosh of cash got dumped on the gaming tables in Macau, thus boosting WYNN and making Adelson worth 20 billion.

Then, they slam on the brakes a year ago and the western Power Elite choose to ignore the coming reality.

And now, the tool to complete the current necessary yankup in the 'global markets' is "China is in such dire straits that they will restart the same process only this time they will make purchasable and usable real estate".


Keynes had it nailed.  An economy is simply paying one guy to dig a hole and another guy to fill it.  A "trusted" authority creates the 'money' used for these payments.  As long as the rest of the people who do things that actually are useful, like produce food and toilet paper, ACCEPT that the 'money' they receive from the 'hole' workers is equal to their work's value, everything is fine.

However, if the 'real' workers ever decide that they should get 'more' than the hole workers, the world is screwed.


Where are we daddy? 

Today's Asian markets are topping up.
European markets also.
Copper has the go-go on China.
USD Index yanked up to 82 by Mon 1/16, now down to 80.50.
Brent to 112
Light Crude to 102
Ag prices dropping across the board
Iran drumbeat lowered
Europe drumbeat lowered
EUR down to 1.26 on 1/16 now back to 1.28
Gold/silver maintaining paper steadiness
Commodity exchanges suffering from MF Global
Not a word about USA political issues ie tax cut expir end of Feb
All msm news outlets are shrilling the call, "it is ok to jump in"


Power Elite cannot maintain the illusion unbroken from Jan all the way thru Nov with a nice steady flow of say only a 120 point increase in the SnP500 over 10 months.  Will not work because market complacency would mo-mo all the way to 1450 in a month or two and then utterly collapse if anybody sneezes.


Today is the rocket launch.  All in risk on let's go to the moon type stuff.  14 points yesterday on top of 7 from tuesday and 12 from friday's open is 26 points in 3 days and with 11 more today (1320), would bust the floodgates with over 30 points this week and 120 since 12/19 or one month.  Obviously, the snp500 will not go up 120 points monthly.


Today is it.  Tomorrow maintains, but little or no increase.  Monday small bump up, then lay down Tuesday waiting.  Waiting for Wednesday.  No concrete Fed action coupled with more Q4 2011 earnings misses and guidelines not great, market BEGINS reversal.


The Power Elite must get the political goals achieved in Europe and the US.  With Sarkozy out in April, they must cast Europe into a horrible crisis to force the formal breakdown of individual government power with an acceptance of an ECB which can TAX!!!!  to support a Eurobond.  A small tax but nevertheless, a tax.

Only crisis will achieve this so I maintain a very very very grim view of its effect on world markets in late Feb, early March.  Coupled with the US shenanigans and a whole lot of Alfred E. Neumans looking at their recent runup buys getting decimated, bye bye 200 points.

Sell the 10% OTM calls today.  Make the list early.

Sell at least 5000-10000 longs and short another 1200-1500.

Buy the ATM puts today.

Harvest some gains from mother's accnt.

The dollar index to 85 and the euro will break 1.20 by March 5.