Up 1.25% is very impressive.
Unless, of course, you look at the volume, which is what we usually get on a holiday. This is why, for the most part, we are sitting on the sidelines with plenty of CASH!!! – as these low-volume market moves do not make us very confident that the "rally" will hold once activity picks up. As noted by Dave Fry last night:
As markets were weak the previous two weeks it was the perfect time for a short squeeze and we’ve seen this numerous times over the past many months. There were also some supposed bullish comments from the IMF and (yes, them again) Greece as the Germans caved for another rescue.
But, another true thing is there was little volume in trade Tuesday, and this means little participation which to me is a negative.
We knew this going into the close, of course and I said to our Members last night (6:56 pm):
As long as the Dollar is over 94, the Nikkei can hold up but 16,900 is our shorting line on /NKD (you are on your own in /NIY). On the others, /NQ is a great short at 4,398 because 4,400 should be tough to cross – so a good stop. Matches with 2,080 on /ES (another good short) and 17,850 on /YM and 1,125 on/TF so those are the confirming lines.
Oil is going to be a good short tomorrow if we're lucky enough to be over $45 at inventory. The supply interruptions (Canada and Nigeria) are coming back on-line and it's going to be hard for traders not to be disappointed on inventories, even though it's too soon to see an effect from the outages (that's not the way traders think).
As you can see from the charts, the Nasdaq bottomed out at 2,070 for a $500 per contract gain and the Nasdaq bottomed at 4,375 for a $460 per contract gain – not bad for after hours trading and, of course, we have Members all over the World, so it's not late-night trading for everyone. In fact, when I retire, I plan on living in Europe as I feel the best time to trade the US Futures is when the EU markets open, around 3am, EST. In Europe, that's 9 or 10 am so I can sleep in, wake up, make a few trades and head off to the pub – that's what I call retiring!
We're done with our index shorts (for now, but probably back in if we test the highs or fail our next levels) but oil is right where we wanted it, at $44.95 despite the fact that API showed a build of 3.4M barrels last night. It's a little tricky to play though because the EIA Report is at 10:30 and Cushing CAN'T have a 3.4Mb build – because it's full – they can't physically fit 3.4M more barrels into storage there. That means the EIA will not likely be as bad as the API indication and some traders may take that as a bullish sign so we'll play it by shorting here into inventories (with stops over $45), probably getting out ahead of them and then back in short on any spike up – we'll make the final decisions in our Live Member Chat Room.
At the moment, the Dollar is being taken down rapidly in an attempt to support the fake market action. Now 93.92, it's down 0.4% from yesterday's high, which essentially reprices the market 0.4% higher (because you trade stocks for Dollars), as well as commodities, like oil. So we're not too enthusiastic with the shorts until the Dollar action stabilizes but that shouldn't be so difficult with other Central Banks coming apart at the seams.
Stepping through the looking glass into the land of the rising sun, we have Bloomberg reporting that we are now officially close to Japanese banks PAYING people to borrow money with negative interest rates. As crazy as it sounds, lending is all about making a spread for the bank and if the Bank of Japan is giving money to their Member Banks at -0.6%, then the banks can lend money at -0.1% and make a profit. I've already put in my application for a 1Tn Yen loan, which I will pay back 999Bn Yen of and keep the 1Bn Yen ($9.2M) as my payment for helping Japan extend and pretend for a little while longer.
If that sounds insane in the brain and unsustainable to you – that's because it is. This is what we've come to as we near the end game for Central Banking. It's the same mechanism that let people flip homes for 10% profits a week after the bought them in 2005 and 2006 – these things tend to run to extremes as they overheat and then the whole thing blows up and collapses and it takes a decade to clean up the mess.
Meanwhile, while other Central Banksters are taking the easy path, our own Fed is talking tough (but, so far, no stick) with Fisher going so far as to tell investors to "suck it up" and deal with the fact that there WILL be a rate hike – one day. Meanwhile, the madman across the water, Mario Draghi says the problem is a "global excess of savings" and that negative rates are a tool to punish savers with and force them to spend money now to increase demand.
REALLY??? When did it become the Central Banks mandate to punish saving? When Banksters began making more money trading than lending – that's when. Clearly, as you can see from the chart below, consumers are not doing their job on the spending front, with gains in Retail Sales less than 1/2 of last year's levels and downright negative for the first 3 months of 2016 – and it's not like we had tough comps because Jan and Feb of last year were negative too!
The Central Banks are not "encouraging you to spend" – THEY ARE ROBBING YOU! Stop listening to all the BS from the Corporate Media and consider what is actually happening. You spend your life saving money from your hard work, scraping together what little you can after taxes and expenses and you put it in the bank and, once upon a time, we got 6% interest AND a toaster for doing that. Now they have taken away the interest and have devalued the money you've saved and now they are actually going to CHARGE YOU for giving them money to invest while forcing you to go out and spend money on the companies they are investing in.
Oh, and by the way, they will share none of the profits with you and will, in fact, reward the drug companies and oil companies and restaurants who are able to charge you the biggest margins while providing you the least possible services for your money. THAT is what our economy has come to!
I'm not joking, folks – how much of this crap are we actually going to take? This is not the way it's supposed to be – WE are the ones working and making money and contributing to the economy – THEY are taking our money and shuffling it around in exchange for outrageous fees that add nothing to our economic growth. Banking has become a cancer on our society and the people who want to do something about it are silenced by a media that has been entirely consumed by 6 Top 0.001% Corporations that DO NOT have your best interests in mind.
You only accept this BS because you are constantly being told on every TV show, in every newspaper or magazine that this is the way it's supposed to be and that you should be THANKFUL because the great and powerful Corporate Kleptocracy is keeping the terrorist boogeymen away from you – or whatever crisis du jour they manufacture to keep you scared and complacent while they tighten the screws and steal more of your money. It's not a victimless crime – YOU are the victim!
Of course, if you are in the Top 10%, you benefit more than you are victimized so we shouldn't worry about it and just keep investing in the companies that rob and steal on our behalf. "Don't hate the player, hate the game" is the motto for the 21st century investor and I don't want to depress you but, in order to play at this game, we need to understand how it's being played and that, unfortunately, is sickening!
Be careful out there.
