This page has been archived and commenting is disabled.

Fraud & Technicals Converge to Make US Stock Markets Ripe for a Sell-Off

smartknowledgeu's picture




 

A brief but very important post today. The S&P 500 appears as if it’s ripe for a significant pull back right now. However, anyone that’s been following us for years now knows that we don’t believe technical charting patterns alone are good predictors of future stock market or asset behavior due to its "completely-rigged-by-the-PPT" nature.

 

 

 

 

Follow this link and you’ll find incontrovertible visual proof that the big Wall Street banks have been using their HFT algorithms to artificially pump US markets higher. Combined with the bearish rising wedge formation above and the very low daily trading volume that’s easy for the HFT machines to rig, one thing about fraud never changes. Fraud can often last much longer than one would be believe to be possible, but growth based upon fraud is unsustainable and will always eventually break down. Due to these rigging games, it's become incredibly difficult to predict the timing of these inevitable sell-offs, but right now, the dam looks ready to break. Of course, if its imminent break is countered by the Feds funneling trillions of new dollars into the market, either covertly or openly, any possible continued rise in the market can only happen on the back of rapidly devaluing dollars, which in the end, means one will just have a greater amounts of worthless USDs.

 

Consequently in real terms, if a continued rise in US markets is accomplished through these means, ironically one will grow poorer as the nominal dollar amount of one’s US portfolio rises, as possession of greater amounts of USD will translate into a lower standard of living as one will be able to purchase less goods and services with greater amounts of devalued dollars. Just ask citizens of Zimbabwe if they were ecstatic during the years the Zimbabwe stock market was the best performing stock market index in the world courtesy of hyperinflation of the Zimbabwe dollar. That’s why, despite sentiment still being ironically low in gold and silver, gold and silver will still serve as your best protection to preserve and accumulate true wealth.

 

Stay invested in broad global stock market indexes and you have lost, as the S&P 500, the FTSE 100 and the ASX 200 have respectively declined -14.32%, -15.72% and -30.50% over the last 4-1/2 years, not including the devaluation of the Euro and USD during this time. Stay invested in broad global stock market indexes, and rise or bust over the next few years, and you will continue to lose, likely at an even greater pace than during the last 4-1/2 years. Greater amounts of worthless fiat currency will not preserve your wealth as politicians and bankers continue down their path to destroy the USD and Euro.

 

 


About the author:
JS Kim is the Chief Investment Strategist of SmartKnowledgeU, a fiercely independent consulting & research firm with a relentless drive to uncover the truth about global capital markets. Last month, in January 2012, the SmartKnowledgeU Crisis Investment Opportunities newsletter posted a one-month +28.51% rise.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 02/11/2012 - 14:28 | 2149449 dogismyth
dogismyth's picture

Just like most would run up their credit cards if they knew they were going to file bankruptcy, the gov is doing the same.  They have no intention of paying off the debt, creating hyperinflation (altho it is a consequence of their actions) or reducing the deficit.  The ballgame is in the ninth inning and sometime soon investment into gov bonds/tbills will be realized for what they are....a poor investment.  The gov is going bankrupt and no one can stop it.  Obama will finish off the nation sometime in his second term.  In the interim, they'll be buying like there's no tomorrow.

Sat, 02/11/2012 - 14:28 | 2149448 dogismyth
dogismyth's picture

Just like most would run up their credit cards if they knew they were going to file bankruptcy, the gov is doing the same.  They have no intention of paying off the debt, creating hyperinflation (altho it is a consequence of their actions) or reducing the deficit.  The ballgame is in the ninth inning and sometime soon investment into gov bonds/tbills will be realized for what they are....a poor investment.  The gov is going bankrupt and no one can stop it.  Obama will finish off the nation sometime in his second term.  In the interim, they'll be buying like there's no tomorrow.

Fri, 02/10/2012 - 12:58 | 2146311 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Bond Bubble?

The New York Fed, which coordinates the central bank's market operations with primary-dealer banks, declined to comment for this article.

There are worries that the end of Operation Twist, scheduled for this summer, could introduce volatility and catch the legions of investors in 30-year bonds off guard. "If the Fed ends the Twist 'cold turkey' at the end of June," asks Ward McCarthy, chief financial economist at Jefferies & Co., "will long-term rates snap higher? Policy makers will start to think about this before the end of June."

 

http://finance.yahoo.com/news/feds-operation-twist-tangles-treasury-0501...

Fri, 02/10/2012 - 12:53 | 2146278 Bansters-in-my-...
Bansters-in-my- feces's picture

You wanna see some funny charts..?

Check out Kitcos gold lease rate charts.

They used to have big "V"'s in the graph where they (CB's)  paid the Bullion banks to lease their gold.

Now the big drops in lese rate NO LONGER apperar on the charts when you view them.

Even when viewing the past 6 months chart....

The dips in lease rates have been "Vaporized" off of kitcos lease rate charts.

Intentional....????

Well,you all know Jon the Nerd Nadler....

Fri, 02/10/2012 - 12:30 | 2146128 SheepDog-One
SheepDog-One's picture

A 'sell-off' implies people will buy, just at a bit lower than here. I dont think there are any buyers at all out there to sell to, I dont know anyone myself who is willing to touch this crap at all anymore. 

Fri, 02/10/2012 - 12:16 | 2146076 MrBoompi
MrBoompi's picture

Half in stocks, 40% in bonds, and 10% precious metals works OK for me.  But I could do much better if I had inside information......

Fri, 02/10/2012 - 11:11 | 2145759 toros
toros's picture

What going to happen to the market when Uncle Ben doesn't pony up?

Fri, 02/10/2012 - 11:52 | 2145947 Manthong
Manthong's picture

They just might let this one go a ways..

They need a crisis for to cement support for the next wave of undisciplined printing, government spending, genenrational indenture and re-election support..

and it would be a good distraction from the Iran moves. 

Fri, 02/10/2012 - 10:57 | 2145712 YesWeKahn
YesWeKahn's picture

I asked a neighbor's kid: "who do you want to be when you grow up", then answer was "Bernanke". I asked why, he said: "he has unlimited power. whatever he does, people have to praise, it is so cool"

Fri, 02/10/2012 - 11:47 | 2145921 mkhs
mkhs's picture

Really?  What?  Was the neighbor's kid 19 or 20?  You must live in the financial district.

Fri, 02/10/2012 - 10:37 | 2145610 JPM Hater001
JPM Hater001's picture

The interesting part is...If the Fed could have done HFT trading in 29 could it have propped the market then?

Because that's all thats happening now.  In 87, 2001, etal there was no way to trade instantly into slipping stocks but today...

This starts to make Lehman and Bear Stearns make more sense.  They had nasty flash crashes right before the real deal.  Was that the HTF Fed testing...or testing the ability to stop...a flood of disaster?

Fri, 02/10/2012 - 12:40 | 2146191 SillySalesmanQu...
SillySalesmanQuestion's picture

+1

Fri, 02/10/2012 - 10:25 | 2145547 rsnoble
Fri, 02/10/2012 - 11:08 | 2145753 Randall Cabot
Randall Cabot's picture

It broke through., attempt by the manipulators failed to bring it back up so far.

Fri, 02/10/2012 - 10:16 | 2145494 dcb
dcb's picture

Dear Mr. Kim, I have vbeen reading your posts for a long time, but the real classic zerohedge article came out years ago (which deserved a pulitzer in my view) showed the amount of trading done by each big wall street bank. This data used to be public knowledge, but as ZH started to expose what was going on the prop desk data was removed from the public domain. there were time when goldman was trading something like 35% of the total market volume, and critical inflection points when you knew the market shouldn't have been doing what it did. It clearly showed goldman sachs was directly causing the huge drop moth after month from Jan to april 09. God knows what was happenig other times. It was clear this crisis was caused by people with a vested monetary interest and it paid off for them in getting QE, and no strings attached bailouts. It aqlso explains why the market has gone up back so far so fast. the whole thing is a scam, and the powers that be are owed so they aren't going to expose it. What happend to the algo where goldman sachs admitted it could be used to manipulate the market. not in the headlines anymore.

please;

Fri, 02/10/2012 - 11:39 | 2145891 Manthong
Manthong's picture

 "real classic zerohedge article came out years ago"

Anybody got the link to that archive?

Fri, 02/10/2012 - 10:45 | 2145657 Liquid Courage
Liquid Courage's picture

goldman sachs admitted it could be used to manipulate the market

Right. And to all those fools who dismiss "conspiracy theories" on the grounds that "someone would tell" ... well, fool, someone did and it went right over your fool head.

Fri, 02/10/2012 - 10:12 | 2145476 Shizzmoney
Shizzmoney's picture

Considering there is a story today that Wall Street traders may be taking anabolic steroids and testosterone injections (ala baseball in the 90s/early 2000s), this all makes sense.

 

Fri, 02/10/2012 - 09:47 | 2145382 rsnoble
rsnoble's picture

For instance notice the large bear flag of epic proportions that started forming at the end of July and continued to form for a few months was negated and didn't play out to it's calculated outcome.

Also........anyone that knows technical levels would be aware of what it takes to get thru them to the upside.  This market is one huge gap in which overnight future pumps take the market over the next hurdle and the previous resistance is now support when you wake up in the morning.  This has been going on the entire rally.  Not to mention the low volume is easier for them to manipulate.  Of course there are other implications asides from protecting the bankers asses.  Politicians won't be real favorable when everyone's retirement goes bust. 

The feds aren't oblivious to these patterns as they hire the best technicians in the world.  They are trying to cheat the eventual outcome of SP 400 which appears inevitable and are doing anything they can to avoid this. Problem is they need a "real" recovery (not the crap we have now) to sustain what they have built so they can ease off the throttle and let economic momentum continue on it's own. I personally think it's impossible.  All eyes are on the EU now when the US is the worlds biggest basket case.

If they claim the "stock market is the economy" and things are so great at near DOW 13k(which we know how things really are) then just imagine how things will be at DOW 3k.  It's not going to be pretty. 

 

One final thought is every market in the history of mankind that has been manipulated has ended up in shambles.  This path is not sustainable. I personally feel it's near an end but it's hard telling how long this game can be played. It's plausible they could have half the population in tent city and still be claiming massive economic recovery.  Of course things could be speed up a lot with the Iran/ reserve currency issues, etc.

Fri, 02/10/2012 - 10:30 | 2145573 Liquid Courage
Liquid Courage's picture

But ... but, it's the 21st Century, and we have all those computers and stuff! And J6P has been too dumbed-down and intimidated by all our PhD's and MBA's to go all Crack-up Boomy ... surely this time it has to work ... if only Bennie could stop that damn lip of his from trembling whilst dissembling. And don't call me Shirley.

Fri, 02/10/2012 - 09:33 | 2145339 Stuck on Zero
Stuck on Zero's picture

DOW 100,000.  Coffee and a donut $445.

Fri, 02/10/2012 - 09:10 | 2145270 EyeQ
EyeQ's picture

How does more QE help Obama (like they claim) - more QE means lower dollar - higher oil - higher food, etc.  Average man on the street sees his food and gas prices as a measure of if a president is doing a good job - I hate QE - take the fall and let the markets gradually fix things.

Fri, 02/10/2012 - 10:23 | 2145537 Money 4 Nothing
Money 4 Nothing's picture

Dow 6,000 should do wonders for PM's.. BTW, how's that breakout in Gold workin?

Fri, 02/10/2012 - 11:23 | 2145813 Milton William ...
Milton William Cooper's picture

Pretty damn good! How's that breakout in paper doing?

Fri, 02/10/2012 - 11:34 | 2145854 Money 4 Nothing
Money 4 Nothing's picture

Uuhh.. Not so much.

Fri, 02/10/2012 - 11:37 | 2145877 Milton William ...
Fri, 02/10/2012 - 09:41 | 2145359 scatterbrains
scatterbrains's picture

If your hungry and they ramp gas prices high enough your not even thinking about voting, unless your one of "those"  with terrorist tendencies.

Fri, 02/10/2012 - 09:20 | 2145289 Raskolnikoff
Raskolnikoff's picture

Long vacations every few weeks are what really helps Obama. Remember when the 3 stooges hit the lottery and decided to have a party in the Penthouse sweet of some ritzy downtown five star hotel? My favorite scene was when Curly decided to climb to the top of an expensive bed with a canope on it, thinking it was a bunk bed he had a long drop when he decided to actually lay in it.

Fri, 02/10/2012 - 11:47 | 2145926 RichardENixon
RichardENixon's picture

He was a victim of coicumstance.

Fri, 02/10/2012 - 08:34 | 2145170 dontgoforit
dontgoforit's picture

....if we had some ham, we could have some ham & eggs, if we had some eggs...   what a boner....

Fri, 02/10/2012 - 07:49 | 2145102 falak pema
falak pema's picture

Jack and the beanstalk. Magical beans of QE! Bernanke is Jack!

Why complain if you be 1%, its a bitch if you be 99%!

1% protected from biflation, 99% totally exposed...thats Oligarchy land new NWO mantra since meltdown.

Fasten seat belts.

Fri, 02/10/2012 - 10:34 | 2145588 JPM Hater001
JPM Hater001's picture

Grimm is sadly under-rated.

I mean...even the name say's something.

Fri, 02/10/2012 - 09:01 | 2145244 Raskolnikoff
Raskolnikoff's picture

It's the growing percentage of that 99% that think they can get a free ride out of all this that is preventing the prosecution of some of those in the top 1% that benefit from the policies that portion of the 1%'ers have implemented by the corrupt officials that growing % of that 99% love to vote for.

Fri, 02/10/2012 - 10:26 | 2145552 falak pema
falak pema's picture

stockholm syndrome...

Fri, 02/10/2012 - 12:34 | 2146158 SheepDog-One
SheepDog-One's picture

Sympathy and even admiration for your captors, thats the real 'new normal' in america. Pathetic.

Do NOT follow this link or you will be banned from the site!