(I wrote here recently that the stock market is almost completely driven these days by algorithmic trading and prop-desk automotons who couldn’t care less about whether the ups and all-too-infrequent downs of the broad averages accurately reflect “reality.” Following is a post from the Rick’s Picks forum by “3 Lions” that nicely frames the insanity of it all. The theme is especially timely given the mini flash-crash perpetrated in bullion Monday night. This brazen, quasi-criminal shakedown not only allowed DaScumballs –aka the Night Shift – to steal gold and silver futures for far less than they were to fetch later that morning in more liquid markets, but to pick off widows and pensioners in some key stocks that trade round-the-clock, such as Apple, IBM and Google. RA)
Unequivocally, we have reached a watershed in the history of the U.S. stock market and therefore global stock markets. Never mind whether traders or investors are making money or not; the stock market has now become nothing more than a casino where the “table” almost always wins. Business-news channels in the USA are nothing more than offshoots of Hollywood sitcom studios which 20 years ago would have been rejected for children’s TV as being too dumbed down. The U.S. stock market has become so far detached from reality that justifiably it cannot be called a stock “market.”
Those of us who believe that one of the best ways to keep proper tabs on the financial charade is by perusing the consistently accurate touts in Rick’s Picks should spare a thought for those still bogged down in ancient trading methodology, such as Elliott Wave analysis, that began life when the stock market was indeed a “market.” A trading/investing friend of mine had 24 years in a row of profits until 2009/2010, when his proprietary trading method failed dismally. During the last 18 months, Bob Prechter has had more wrong calls than the Shanghai telephone exchange, and Dr. McHugh likewise. (I must point out that I have great respect for both of these men — they are still as clever as they always have been, it is just that the rules have changed).
What Hindenburg?
It even looks like the otherwise invincible Charlie Nenner has got the top wrong (some say he is a secret agent of Goldman Sachs, but he does get it right 90% of the time). There are so many charting indicators (i.e., no fewer than six Hindenburg omens) that say this market should be collapsing — but it isn’t…so far. To cap it all, the infallible and rare VIX Bollinger signal almost two weeks ago signaled “down, down, down,” but in fact we have gone up, up, up! Meanwhile, the latest figures reveal that U.S. corporate insiders are selling 1411 shares (!) for every share they’re buying.
Undoubtedly, this market will not go down until “Da Boyz” are totally overwhelmed by some kind of trigger event that sets off a chain of events that will see the legs of their “table” collapse. It will be a “flash crash” of immense proportions rather than a “stair-step” decline. The only thing that is still favorable to Main Street is low interest rates, so when they start to rise, that will most likely be the trigger.
Good trading.
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Steve,
Seeing as how my sort of peeved response has irked you, I feel owe a response. In a nutshell…
Q: Well? Does history have anything to teach or not?
A: If so, then we must accept that history was no Eden. If not, then we can only learn what history has to teach by repeating it, which is logically and realistically impossible because we can’t repeat what was never there to be learned in the first place. So I vote for no Eden 🙂
In more detail, during your childhood, markets and politics were already sick. There was nothing at all moral about the BW gold standard, and it was bound to fail, what with gold being under centralized authority as it remains to this day. You just didn’t know they were until later. And why would you have? Things seemed okay.
By the same token, and having experienced those same nicieties as you did growing up, I never would’ve guessed that the 80s that I grew up in were some seriously troubled times. Throughout the 90s to today, I’ve come learn otherwise and the why behind it. Some people from your generation haven’t figured it. Some people from mine haven’t.
So we’re no different from one another nor do we come from different times. Not from my perspective, anyway, which is why all I am say-ying… is give perspective a chance, warts and all. The past saw silver demon(et)ized, followed by a purposeful and successful attempt to do the same to gold; the efficient and free agrarians handed themselves over to the government bailout gallows, upon discovering Liberty (but all eggs in one basket) leads to over-abundant and unprofitable production; same as industry when it’s efficiencies became such to overwhelm it’s own profitability alongside all the other social memes; the present sees a desperatation to keep all these problems from coming back to bite in the keester.
Lots of mistakes, all coming to a head now, are going to need correcting. But that we haven’t put it out and rewired yet means we’re no better than anyone in the past who miswired it, not worse (not that I don’t have my moments where I fantacise differently).
As to why Edenism bothers me… Well, pretty much all my life I’ve been getting an earful about how (then) “you kids these days”. And after a while, you get tired of hearing about it from the elders that, because social security didn’t turn out that way, have to take it out on the fact that you can’t give them as much they would like (god bless the royal highnesses). Boxer worked harder, then Atlas shrugged. And now, many kids, being dumbfounded in all this, too confused and broke to even try… all the while, the adults do nothing better, reminisce about a overly glorious past that wasn’t, and mire themselves at a Hell’s Gate of today that, while it’s partly true, is not so thoroughly hopeless as they would like.
Escapism and scape-goating, that’s why. It had nothing to do with the post I responded to, but it wasn’t intended to be taken that way. What I was getting at was that yesterday, there was gold, so maybe that was why there were flash crashes. Today, the fall seems painfuly slow and drawn out. No gold to give an indication. I don’t know, but it makes sense to me. We’ll have to (on the whole) agree to drop this fiat system. Until then, it will crush and kill, crush and kill… just like it’s doing.