Take a look at the chart below if you think yesterday’s monster short-squeeze meant something. The Dow Industrials were up 326 points at their apex, making plenty of noise but signifying little or nothing. Some saw the buying spree as a bet that everything will turn out all right for Europe. Yeah, sure. And Obama’s “jobs program” will turn the U.S. economy into the muscular dynamo it was in the 1950s. In actuality, Wall Street’s latest buying riot was simply one more ‘up’ in a tedious series of ups and downs that are being used by the Masters of the Universe to distribute stocks to widows and pensioners before They pull the plug.
The usual bunch of rascals and thieves timed this dog-and-pony show so that it was nearly impossible for anyone to make more than chump change after stocks opened in New York. The big money had already been made overnight on index futures that closely tracked similarly meaningless effusions in Europe and Asia. The rally was of course the mirror image of last week’s hellish collapse (see chart below), which, like Monday’s spasm, was all but spent before traders who keep New York hours had downed their first cup of coffee.
These pointless, machine-driven panic attacks are managed so that only a small handful of traders can make money on them. However, a bigger picture of gratuitous swings that have been occurring since early August explains why long-term bulls and bears alike have effectively been prevented from profiting. What bear who was short when the week began could possibly have withstood the fright-mask lunge of the last two days? And what bull could have held steady when the Dow plummeted an even more frightening 950 points last week in just three days?
Not that the markets are even supposed to function any longer as vehicles for investors and long-term traders. What they have become, as the global financial system itself slouches towards Bethlehem, is a money-crazed circle jerk for a bunch of digital prodigies recruited by the likes of Goldman and J.P. Morgan to milk the last ounce of “free” money from what remains of the world’s precious capital. It should be obvious to all by now that this capital will not survive the machinations of Wall Street’s clever ringmasters. Most likely is that it will vanish overnight, vaporized by an all-too-real flash crash that will make the May 2010 version look like the rehearsal that it was.
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The Second Coming – W B Yeats
http://www.youtube.com/watch?v=nXe6JakBwkk&feature=related