Friday, July 12, 2013

What Bernanke said on Wednesday (English Translation)

This is the English translation of what Bernanke said on Wednesday night:

Man, did I get scared when that market dropped 700 points in 4 days.  I thought it was over!  I will never talk again about tapering.  I will never bring it up anymore.  This economy really sucks.  What it told me was that I forced the economy up with monetary easing by printing money and buying treasuries; forcing everyone into the stock market and the minute I stop doing that, everybody is leaving the market and we could give back all of the 104% gain we have had in the market.  I didn't realize how lousy the economy is.  The stock market didn't go up because companies are doing well and top lines are getting better. The only reason the stock market went up was because I was forcing it up. I forced it up by printing money, and by printing money, I'm screwing all the little people and all the poor people at the supermarket [inflation]. From now I'll blame rising prices on demand, not inflation.

We have 2 great stories we can tell the American people.  As interest rates rise, just say its going up because the economy is doing well and the housing market is strong.  All we have to do is push the banks up next week and we will have a big run!

Wednesday, July 10, 2013

Quick market thoughts

The dollar is higher by taking the bid out of gold.  $GS can take the bid out, drop the gold down to push the dollar up.
They are doing this because the dollar was collapsing because every time Bernanke printed dollars to buy the bonds, it weakened the dollar.  He was printing so many of them, it was killing the dollar and causing the price of groceries to go up.

The dollar will collapse, but in the meantime short gold and mining stocks.

The story is the economy is hot because the housing industry is on fire.  The truth is applications are dropping on the vine.  Everyone was buying out of fear a while back as interest rates started up.  The banks will drive the stock market.  While the S&P is between 160 to 168, you can trade, but you can't invest.  

$GS reports next week, it has to go above 165 in order to get this market moving.  If they run the banks next week, then the market goes higher, if not, then it's all over.

The economy is not in good shape if you look at the GDP.  We are sitting at 1.8% growth.  The stock market is going well, but not the economy.  

If $XLF goes above $21, then buy it because the banks will be rigged.  If the banks are rigged, we can go higher till September.

Best bet for now is to do nothing until next Wednesday, then we will know based on what happens to $GS what the market will do.

Sunday, June 30, 2013

Current Market Conditions

The market will continue to go down, it has no choice.  Probably down to 152 to 153 on the $SPY.  It should hold at the 10% correction, this should set us up for the next rally.  We had the same action to occur in May and November of last year.  The patterns should repeat as long as the fed continues to play its games in the market.  Don't miss it. (Click on image to enlarge)

Thursday I watched the market closely.  I noticed 5 attempts to break the 50 day moving average.  All 5 failed. Then on Friday morning about an hour before the market was set to open the S&P Futures were up over a point, but by the time the market opened, not only were all gains wiped out, the $SPY was down over a point on no news.  My only assumption is the market was expecting Ben Bernanke to issue a Friday statement that never came to pass.  Back in 08, the Fed was really good about making those Friday announcements that would send the market spiking.  Oddly enough most of those announcements always came on the 3rd Friday of the month (options expiration).

As for now, Bernanke is boxed in.  If he continues to buy treasuries to get the rates down below 2%, it will continue the inflation at the Supermarkets which is harming the poor and middle class which will eventually lead into harming the economy.  If Bernanke doesn't continue to buy treasuries, since the money that was printed was not used for the purposes they told us it would be used, we cannot sustain a 2.6% interest rate with a ~1.3% GDP and the market is headed for a good 10% to 20% correction.

We can't change what the clowns in Washington are doing, but we can still create wealth.  If the dollar starts to go down and the market continues to go with it...(both must happen Dollar Down AND Market Down, that's the key!) and gold mining stocks will soar! If Bernanke decides to bring the rate down below 2%, the stock market will go up and inflation will be horrible.

Sunday, June 2, 2013

The Fed Stock Market Bubble

There is a lot of talk about the stock market performance.  Lately, the market has been worried about the Feds 'tapering' off their buying plans which has buoyed the market.  The real problem is what happens when the Fed decides to sell all of the securities they have bought!

As the now, however, as long as the SPY hold over 164, the bull market should remain alive.  It is breaks 167, it should give the all clear signal, but it is breaks 164, it will be time to short the market.