SP 500 and NDX Futures Daily Charts - Whipsawed

Yesterday's late afternoon Fed rally that ran up so sharply faded just as sharply today.

Yesterday the Fed's dovish tones had American stocks partying like it was 1999. And today, after the cold water was thrown on the global economy by more dire outlooks from Europe, traders reconsidered and thought, 'yes the Fed is dovish, because the economy is not recovering. Hey, the economy is not recovering. Sell!'

The Fed's jawboning giveth and the Fed actions or lack thereof taketh away. At least in terms of money manipulated wealth.

I don't want to give these markets too much credit for thought though, considering that the average holding time of a stock trade is now measured in seconds. These sharp moves ought not to surprise one too much. This is a very speculative, hot money driven, technical market. It reminds me of a description I read of the stock markets volatile up and down moves in the Summer of 1929.

We are now in earnings season. It was not auspicious that Alcoa beat on earnings and came inline on revenues last night, put out a rosy forecast, and the stock sold off today.

Well that's today. And here in the United States of Amnesia, we only live in the now.  

And it doesn't matter if the broad swath of people, thriving, as long as they are surviving.   It matters that the things that really count to the power players look good.  And baby, our one percent look marvelous.

Have a pleasant evening.

Robert Johnson: US System Is Broken and Heading Toward Social Conflict

"We are on an unsustainable financial trajectory, the financial system has been unmasked as unstable and unfair, and that contributes to inequality, part of which comes from the operations of the financial sector, and is a formidable, formidable cause of social instability in the medium term."

Robert Johnson

The English-speaking people are marvelously unaware and uninformed of what is happening in their own countries. 

Peaceful demonstrations and grievances such as Occupy Wall Street are systematically stifled and crushed.  Non-sanctioned opinions are marginalized and ridiculed.

A vocal minority is energized by stimulating their fears, hatreds, and paranoia.   The majority are 'diverted' and confused.   The professional class is acquiescent to the status quo.  The intellectuals hide in their studies.

The plutocracy's standing order of the day is 'keep a lid on it.'   Until when?  The increasing use of force? And then what?

There will be change in finding the right issue, the fulcrum of change that will enable diverse groups with different perspectives to come together and energize themselves in a common cause.   Favorite causes and individual egos will continue to be an impediment to this.  The Occupy movement lost focus because it chose to protest in favor of everything and became enamored of process over substance.

I thought Johnson's idea of eliminating private schools was in the wrong direction.  Consolidating the schools and eliminating diversity while giving them to an unreformed and corrupt political regime does not seem to be in the first priority for change.  Social engineering tends to be longer term, divisive, and debilitating.  And I don't think eliminating choice is the key to achieving progress.  It sounds somewhat statist.

The focus of effective reform needs to be struck at the root, which is the financial sector and the mechanism of financial looting, and the money corrupted political process which is how injustice is propagated.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

Related: The Problem In One Picture

Gold Daily and Silver Weekly Charts - Quod Erat Demonstrandum

Gold and silver were under some serious pressure after a mid morning hit that was particularly blatant and clumsy.

The pressure continued steadily most of the day with silver really taking it hard.

The Fed minutes came out around 2 PM, and the equity and the precious metal markets headed north like scalded cats, because of the decidedly dovish flavor of the Fed talk.

Is there anyone, and I mean anyone, who reads what I write here who is surprised by this?   If so, then I must not be doing a very effective job of explaining that The Recovery™ is not yet sustainable, and the Fed must continue 'priming the pump' in a somewhat neurotic attempt to invoke the appearance of growth and vitality where none exists.

And why is this?  Because the system has not been reformed, and the financial sector and the one percent continue to take, by far, the greatest share of this monetary stimulus and shove it into their own tax avoiding pockets, and the public be damned.

After the Fed minutes came out, a few of us crossed emails saying, 'is there any doubt why they hit gold and silver this morning?'

There is almost NO doubt in my mind that the Fed and their Bankster owners are actively managing market perceptions while they continue their failing policies, all in the virtuous name of  'instilling confidence.' 

But a portion of the Rest of the World seems intent on calling their bluff.

Well, let's see what happens.

 

It is far too early to call the 'triple bottom' in place. We must see a breaking of the downtrend of lower highs and lower lows.  But the fundamentals remain in place, and for longer term investors, that is what matters the most.

As for stocks, I have mixed emotions. They are running on Fed money expansions, but the organic growth from the economy really is not there yet.

A true stock market junkie and advisor making their living from stocks will keep reciting the 'stay fully invested' mantra.   I became intimately familiar with this mindset as I chose to liquidate a substantial tech stock portfolio prior to the tech bubble crash of 2000.

I remember the big house broker almost yelling at me to 'stay fully invested, these are good companies!'    I liquidated everything and took my money as far away from that firm and Wall Street as I could manage.

And in less than six months I saw many of my friends who took that sort of advice being virtually ruined, as their stock heavy retirement plans evaporated. And even if they had held they would not have gotten even in the subsequent bubble, because they were not able to toss the losers out of their portfolios as the indices like the Dow, the SP and the NDX so often may do.

And you know what was said on financial television to these people who had been ruined?  "No one MADE them buy those stocks."

And we saw a similar cycle of run up and crash in 2007-2008.  Many were decimated, but Wall Street continued on, keeping its profits, and socializing its losses to the public trust.  Hi ho.

Neo-liberalism breeds sociopaths.  The markets are gods, and people get what they deserve.  If they are tricked, if they are destroyed, they had it coming because they were stupid and weak.   To each as they deserve, and what they deserve from the strong is subjugation and death.

 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Easy FOMC and Here Come the Earnings

After the bell Alcoa kicked off earnings season by beating estimates for profits, and coming in-line for revenues.

For the entirety of the earnings season take profit results lightly, but key in on the top line numbers.  They are harder to engineer using accounting gimmicks.

The Fed minutes were decidedly dovish, and they caused the equity markets to take off.  

This is not due to any recovery,  but to the Fed's indication of keeping zero interest rates in place for a considerable amount of time.  Why is this important? Because it compels one to calculate the risks somewhat differently.

Have a pleasant evening.