Is This Rally Rigged?
Posted by
Jeffrey Ziegler in
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January 26, 2010 |
17 responses
Wow – You want to watch this! I’d Love to hear your thought about this so make sure you leave a comment.
JZ
17 Responses to “Is This Rally Rigged?”
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Of course it is… they wouldn’t dare voluntarily admit to their true colors and agenda this early into their term, if even ever… With that in mind, they absolutely have to rig it up. I submit that the global community knows/thinks the same.
Jeff – at this point I can believe our government will do anything and this could just be another example. On the surface Obama goes after Wall Street bonuses while at the same time (if this is true) making those same people rich beyond their wildest dreams. So much for the little guy.
- Jeff W
Yeah…makes perfect sense to me! This guy does sound like he knows what he is talking about. I have reading much about the US economy and current & past debt/credit bubbles to think that this rally is generated by real buyers of any kind. The FED has manipulated the economy by TARP and other means, the current Obama administration is corrupt (ACORN, ISEU, TidesFoundation by George Soros, and the Progressives) so the idea of market manipulation doesn’t surprise me!
Trimtabs often has a unique perspective, and this one is no different. However, claiming that the Fed is propping up the market in the background is a huge issue if true. But even if it is, I don’t think we have to worry about them unwinding too fast. In the short term its about earnings, intermediate term jobs, and long term the drag of deficit & taxes on the economy.
This doesn’t surprise me at all. I know a Goldman Sachs (GS) employee who told me last June in an indirect way that GS was telling all their large clients that the rally would last at least until the first of the new year (2010). GS has been a heavy trader and was the recipient and middle man of a large amount of TARP money.
There has never been a public disclosure of what has happened to all this $.
Hey Jeff, of course it’s rigged – thanks for passing this on. There is no doubt in my mind that we are being deceived and manipulated – this video makes sense to me.
I am a fan of Greg Roy and he believes this too. I can’t get my mind around the fact – no wonder they don’t want to release what the fed has done with the money
GS has been a leader. Using stimulus money they have done a lot(probably more than a 100) million share trades for themselves last year. Can you move the price of a stock with that size trade. GS has been front running and making a ton. It’s illegal but with
Geithner and Bernacke in charge who is going to arrest these crooks?
hey jeff,
I have suspected this or similar from the govt for many months now…the s and p website used to post pe ratios and it stopped last oct or nov @ 138 to 1…can u imagine? now might be around 90 or 80 to 1…looks like crash is coming! i would be prepared with at least 25-50% of a portfolio in physically owed silver or gold…what do u think? why else won’t the fed let an audit take place? but good time to be a spread trader…plus by crash insurance…
Jeff,
This sure backs up what you have been saying this last few months about the inconsistances between the Economy i.e Companies going bust, unemployment and retail and the stock market prices going to silly levels.
Could be woth putting some Puts on before a possible down turn you have been predicting.
Peter
This is a rally like no other. Gloomy news is transmuted into higher prices based on the fact the it is “not as bad” as expected. WHOSE EXPECTATIONS? So-called, anonymous “Analysts”. C-R-A-Z-Y!! I can’t wait until the truth comes out, which it must!
This rally is definitely rigged. The President’s Working Group on Financial Markets (Plunge Protection Team) made up of the Head of the Fed, Treasury, and SEC are all in on it. The president gives the word and the Plunger Team goes to work with Goldman Sachs and Pimco that buy futures to prop up the market at the open, and Goldman Sachs has software that front runs the market to drive the market during the day.
The FBI caught a Russian programmer about 6 to 8 months ago who was working on the software for Goldman Sachs. This programmer stole a copy of the front running trading program from Goldman. The FBI said that it was a good thing that they caught this guy as he could manipulate the markets with this software. They returned the software to its “rightful owner” Goldman Sachs. So, I guess it is OK for Goldman Sachs to be able to manipulate the market.
Any wonder why Goldman Sachs had record profits a quarter ago during one of the worst recessions in history… it was from all the trades that they were making in the market using their proprietary (and illegal) software.
Who cares though… I use credit spreads and am consistently making 5.5 – 7% very conservatively every month.
Regards
Jeff P.
You have been looking for a sell off for months. If the Government is buying the futures, that could be why the rally hasn’t stopped. How long can the rally continue?
It really is a hard pill to swallow. When the top comes and things begin to plummet, get out of the way because it’ll be like catching a falling knife. What goes up must come down. Who knows how far it’ll go. Some are claiming a double dip…either way it doesn’t matter, just keep the probabilities on your side and sell those fat juicy premiums…. like all you savvy option traders.
JZ
Hi Jeff,
Here’s an article from another option trader named Jeff Clark from Standberry and Associates Investment Research that goes hand in hand with your blog post:
Is the Government Manipulating Stock Prices?
By Jeff Clark
January 21, 2010
After a 20-year career trading S&P 500 futures contracts on the floor of the Chicago Mercantile Exchange, my friend Charlie suddenly retired last November.
“There was no way to protect yourself,” Charlie said to me over lunch a couple weeks ago when I asked him about his unexpected decision. “This guy would walk into the pits and just start buying. It was unconventional. He’d buy at times when it really didn’t make any sense – at least not to those of us who’d been around for a while. And he’d buy HUGE.”
“It got to the point,” Charlie continued, “that we’d have a bunch of our interns just watching the guy when he was off the floor. We’d know if he took a phone call. We’d know if he’d gone outside for a smoke. And we’d know if he started walking in the direction of the pit. That was our cue to start buying futures contracts ourselves – just to get in front of the guy.
“I knew it was time to retire,” Charlie sighed, “when I started planning my trading day around this guy’s bathroom breaks.”
For the past 20 years, conspiracy theorists have engaged in stories about the “Plunge Protection Team” – a group of traders funded by the Fed whose sole purpose is to prop up the stock market. I never really bought into the argument, though. After all, an awful lot of people “in the know” have to stay quiet in order to keep the conspiracy going. And it’s unlikely any group of people can maintain that sort of silence for two decades.
But Charlie’s story got me thinking.
Then, last week, Charles Biderman, CEO of TrimTabs – one of the most respected and widely read financial research organizations – published a report that raised the possibility that the Fed is actively involved in boosting stock prices.
In the article, Mr. Biderman suggests it would only take $5 billion to $15 billion each month to buy enough S&P 500 futures contracts to boost the market 70%. Surely, with all the hundreds of billions of dollars used to prop up the real estate, auto, and banking industries, it’s reasonable to suspect the Fed might use a few bucks to prop up stock prices, too.
At least it’s something to think about.
I’m still not sure if I can completely buy into the whole conspiracy theory just yet. There is, however, one thing I do know for sure…
If the Fed has been actively engaged in manipulating stock prices higher, then it can manipulate them lower as well. You won’t want to be the one left holding the bag when that happens.
Best regards and good trading,
Jeff Clark
Jeffrey,
This is exactly what is going on. One of my sources explains it quite a bit. Visit http://www.philsgang.com where about a week’s of radio show archives are present.
You will be doing a number of bear call spreads pretty soon.
Jack
Thanks for the info Jack.
I’d love nothing more than to see the VIX above 40 again, and just clean up on Bear Calls for 2010.