SP 500 Daily Chart and The Planet of the Apes

The SP futures declined to briefly touch a channel trendline that goes all the way back to the intraday spike lows of October 2009!

The market is rallying sharply now, and if it can retake the old support, now resistance, around 1105 it has a good chance of setting a new uptrend back to the top of the channel. This could just be a dead cat bounce. I was looking at some of the indicators last night, and they were at record oversold levels going back at least four years, including the crash.

Was all this a trading gambit mixed with petulance over the financial reform package? In a normal market I would say "nonsense." But this market is thin, like a Ponzi scheme, driven by high frequency trading and artificial liquidity. The few genuine investors are being chased and shot down like the human beings in The Planet of the Apes. The Wall Street gorillas have all the horses, nets and rifles, courtesy of the government, the regulators, and the Fed.

The smackdown in gold and silver ahead of option expiration next week, and the miners' option expiration today, was some of the most blatant and heavy handed market manipulation I have seen in a long time.

The US is badly in need of adult supervision and behavioural modification. Not the much maligned people, the long suffering public which seeks only to go about its daily business creating wealth in the real economy in the face of mounting hardships, but rather the corrupt and irresponsible government, and the pampered princes of Wall Street, who are engaged primarily in wealth extraction and redistribution, primarily for themselves.

Washington can pass all the reforms it wishes. But until it obtains the will and the regulators to enforce the laws, including the existing laws, it is all merely a show to placate the public and maintain a misplaced confidence in 'extend and pretend' sustained by self-serving neo-liberal economic mythology.

"Meanwhile, the financial sector is to be enriched by the translation of junk economics into international policy. Living in the short run is the financial sector¹s time frame ­ while distracting the attention of indebted populations from calculations that Wall Street understands quite well: the debts cannot be paid in the end.

But they can be paid in the short run, with promises to pay someday ­ as if any economies ever have been able to grow by imposing austerity! It is all junk economics, of course. But it buys time for the bankers to pay themselves yet more bonuses this year. By the time the financial system collapses, they presumably will have put their money into hard assets.

Bank lobbyists know that the financial game is over. They are playing for the short run. The financial sector’s aim is to take as much bailout money as it can and run, with large enough annual bonuses to lord it over the rest of society after the Clean Slate finally arrives. Less public spending on social programs will leave more bailout money to pay the banks for their exponentially rising bad debts that cannot possibly be paid in the end. It is inevitable that loans and bonds will default in the usual convulsion of bankruptcy."

Michael Hudson

As the crisis continues unreformed, the frauds will become increasingly outrageous, and obvious, to all those with a willingness, and yes the courage, to see things as they really are.

The Horizons AlphaPro Dennis Gartman ETF and Its Narcoleptic Returns

"The investment objective of the Horizons AlphaPro Gartman ETF (the “ETF”) is to provide investors with the opportunity for capital appreciation through exposure to the investment strategies of The Gartman Letter, L.C. (“Gartman”), founded by Dennis Gartman. The ETF will use equity securities, futures contracts and exchange-traded funds to provide the ETF with long and short exposure to multiple asset classes which may include but are not limited to global equities, commodities, fixed income and currencies.

The ETF provides long or short exposure to multiple asset classes including global equities, commodities, fixed income and currencies."

The ETF seems to be underperforming the major indices and precious metals, and mostly everything except for Obama's approval ratings. It did perform a little better than the TLT 20 Year bond index. At least their performance is consistent.

In fairness to Mr. Gartman I do not know how faithfully this ETF follows his philosophy and market 'calls.'

Perhaps this is like one of those Krusty the Klown franchise deals where the product only involves his name, philosophy, pictures, quotes, and trademarks, with no responsibility or genuine involvement in the content. I would suppose he is getting something out of this deal.

I mean look at their returns for the past year. It defines 'mediocrity.' A passbook account at .25% offered better returns with less risk.

I did think that it was cute that they blamed "President Obama's attack on the financial sector' for their lousy performance this year. LOL The Congress could not reform a schoolyard with a SWAT team if the kids had enough leftover lunch money to make it worth their while.

The Gartman ETF seems to be doing a little better than Goldman's advice to its retail clients, which has been wrong 7 out of 9 times according to recent stories from Bloomberg. Gee, do you think they are doing so well because they are doing what they do best, and taking the other side of the trades for their own book? Oh no, I forget. They are "market makers."

At least the Gartman ETF managed to get a memorable symbol for the ETF, HAG:TSX. I suppose DEDMUNI:TSX was out of the question.

When someone sent this chart and fund description to me I thought it was a hoax. I guess you really can't make this stuff up.

Oh well. Another Wall Street legend, shot to hell. Still, tomorrow is another day.

SP 500 June Futures Daily Chart at 1:00 PM EDT, and NDX Futures into the Close

Having broken lower from the first decision point, the US equity market has continued lower, presumably towards the support at the lower end of the long term trend channel.

As a reminder, option expiration is tomorrow for stocks, and next week for Comex precious metals options.

Did the Flash Crash probe the way lower? Traders, and I am one, are notoriously superstitious and suspicious about such unexplained movements, suspecting that they are exploratory and will likely be retraced.

Well, we're there. Wash and rinse. Wax on, Wax off. Make it on the way up, and on the way down. As long as you are fleecing the sheep. That is how you gain a perfect trading record, if you are dealing the cards, playing with guaranteed house money, and peeking in everyone's hands, if even only by milliseconds before they make their plays. Get them buying hope, and then selling panic. It's all good if you can keep the money moving across your tables.



If that support does NOT hold, we're not in Kansas anymore Toto. But some sort of bounce seems more likely at the moment. Ben has not yet begun to print. I think they're just negotiating terms and turf right now.

Later: Here are the NDX June Futures going into the NY close of trading. The futures were selling off HARD led by the financials. The SP futures were looking for traction again around that key 1070 support and barely hanging on, with a similar story around 1800 support on the big cap tech NDX. The SP futures have a definite shot at the prior lows in the overnight trade.

Gold and silver spot was holding the exact levels where I would have expected them to find something to hang on. Let's see stocks go into option expiration tomorrow. There are a lot of calls that are going to be expiring worthless. I wonder if they will try and jam the puts for a little whipsaw action.

I will be a little surprised if they let gold up for air before its own expiration next week.

Wall Street Threatens Washington as Reform Vote Approaches; Europe Acts Pre-emptively Against Fraud

Naked shorting is illegal in the US, and for very good reasons. On a larger scale, it is used for price manipulation, and is the equivalent of counterfeiting. The removal of the uptick rule by the SEC on July 6, 2007, which had been created in 1938 as part of the New Deal regulatory reforms, cleared the way for its more heavy handed uses and control frauds.

The ban on naked short selling was not enforced by regulators who were willing to turn a blind eye to blatant market manipulation. Under the DTCC regime it turned epidemic. The alarm was raised by many whistle blowers who were either ignored or vilified by the corporate media.

Let me be clear on this. I am not opposed to short selling. It is a trade that has many legitimate uses. It is naked short selling that lends itself so readily to abuse, particularly when there are not limits on position sizes and massed selling to drive down prices. The deregulatory movement, based on such lofty principles, has become nothing more than a means to a fraud, systematically knocking down all the regulatory safeguards that were put in place to protect the public during the Great Depression.

And this was the result of a long and expensive campaign, led by the wealthy elite and the Wall Street banks, to lobby the Congress and dupe the people to energize their frauds. As such, it shows premeditation and deliberate intent, the organized corruption of one of the most connected of all global resources, the US financial system and control of the international monetary reserves.

It became so outrageous that the US had to intervene during its banking crisis that triggered this global financial crisis, and selectively enforce the law to protect its banks from each other and the packs of unregulated hedge funds led by Goldman Sachs.

Germany recently stepped in to ban NAKED short selling, which was being used to attempt to take down certain prices to trigger the highly lucrative and largely unregulated Credit Default Swaps.

And commentators were outraged and even hysterical over this action by Germany, which was the kind of responsible market regulation that the US reserves to itself, and only when it is in support of protecting its banking oligarchs.

This surprise and shock indicates how low our standards have fallen, and how given over to Stockholm syndrome so many otherwise intelligent people have become regarding the speculators and the banks. Death by professors, chief strategists, and the pampered princes of the corporate media.

I found it interesting that the heavy selling today in US equities, triggered by the selling of large tranches of SP futures near the open, in addition to news indicating the recovery is not gaining traction, and the threat of another flash crash was tied by traders this morning over ‘unease the the Congress has not yet killed Blanche Lincoln’s amendment to prohibit the banks from dealing in Credit Default Swaps.’

Regarding the recent gold action John Brimelow says:

"Waves of selling hit gold on Wednesday in the European and NY midmornings. As noted earlier, apparent CME volume pre-open was 90,000 lots, and estimated volume between 9AM and Noon NY, during which time gold dropped some $21, was a heavy 95,000 lots. ScotiaMocatta simply refers to gold being “bludgeoned down” and Reuters quotes a COMEX gold floor trader, “the big banks just put in sell orders that hit the market."

Anyone close to the market can see this manipulation. It is neither sophisticated nor clever. That is the shame of the regulators and insiders, who find their coverage in pleading ignorance. And what they do in gold they are doing in equities and other markets, while working their way up the food chain to the sovereign debt markets. None are safe when corruption partners with government.

All this pain and uncertainty is designed to maintain their impossibly perfect trading results for their proprietary accounts as their customers bleed for their bonuses. And what makes this such a perfect con is that they are bullying the public using the money taken from the Federal Reserve and the Congress, the public's own money.

I would that Obama and the Congress had half the courage of Merkel. And that commentators and the middle class would realize the sorry state that their economy is in, held hostage by a bunch of spoiled brats and well heeled thugs, and a government by and for the highest bidder.

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the Bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst yourselves, and when you lost, you charged it to the Bank... Beyond question this great and powerful institution has been actively engaged in attempting to influence the elections of the public officers by means of its money...

You tell me that if I take the deposits from the Bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin. Should I let you go on, you will ruin fifty thousand families, and that would be my sin. You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, I will rout you out."

Andrew Jackson on The Second Bank of the United States which was the Central Bank of his day.

A dangerously simplistic view? More like common sense, and the plain spoken truth, at last. You have been given a Republic, indeed, if you can keep it, if only for the honor of your fathers, and the sake of your children.