08 July 2015

SP 500 and NDX Futures Daily Charts - Brood of Vipers, Farcical Fed

If you have stock gains, now might be a good time to consider raising some cash on any rallies, and sitting on it for a while, until this global equities situation sorts itself out.
As you can see below, stocks are finding a footing near the lower bound of the 'trading range' I suggested that might try to establish.   If they slip this range, barring intervention from the Fed and the Exchange Stabilization Fund, it could be a rough ride here, following China and Europe.
China *might* be finding a footing here.  I am watching the Shanhai composite.  This is not unknown in the pattern by which a bubble breaks.  And have no doubt, China stocks were in a bubble.
I have heard that approximately 70+% of China stocks are no longer trading, having been halted to stem their losses.  I am also seeing the usual abuses of any bubble, wherein people have leveraged up, pledging hypothecated real estate to buy stocks, and companies using their own stocks to secure loans.  
The US kicks off earnings season tonight with Alcoa.  I am told that the rules prohibit US companies from buying their own stocks during the earnings quiet period.  If this is so, then this will remove one of the bigger bullish factors from this distorted market.
The Fed minutes released this afternoon were 'hawkish.'   As if.  
The Fed wants to raise rates off zero by about 50 bp just for their own purposes.  They stopped caring about the real economy quite some time ago.  They make noises to the contrary, but at the end of the day they are the servants and creatures of the Banks first, and the government second.  And the devil take the rest.
Have a pleasant evening.