Early in our trading week the DJIA was on it’s all time high. The mission may have been to have achieve this purpose. My question is will this be enough or not? The overextension continued overnight and rallied prices above 1540. The interesting and bizarre nature of this rally was that 1530 was obliterated on the way up being much less than a speed bump. All of these day’s gains were done with an absence of high plus tick. This is very disconcerting and dangerous. On Wednesday the Dow continued higher crossing 14,300 in trading action. The movement has not energized as the big block trades were lighter being the 4thtrading day of the month.
The computers are gleaning the bond purchases of the fed as a point of resource money for the S&P. It has now become so obvious they have to do it in short time frames since it is creating a circumstance whereby large amounts of money are needed to sustain S&P prices. Reviewing the bonds chart showed the 1st 4 trading days of the week eroded bond prices approximately 3 points. There is someone that is continuously feeding supply into the system on every rally and doing it with overwhelming size. There are many theories to who this somebody was, but it does not really matter. The overall effect is creating a short term severe oversold condition. Thursday’s trading was anything but active. It was nothing short of a boring day through and through. The monthly employment report was most likely the reason behind the docile market.
It was over 30 years ago and I was a young options trader with Merrill Lynch. I remember that silver had rallied like never before then one day as if the world had changed, a major meeting had happened amongst the big securities firms because of a one sided market gone sour. We have reached just shy of $50 an ounce and then the debacle. The reason I mention this is because virtually one entity did the silver squeeze, the Hunt brothers. They were the only entity on the long side at the end and when they were withdrawn, it was an anvil hanging in suspension from an invisible spider web. Not much support! Are things much different today with the Fed on one side? Ponder that!