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Posts Tagged ‘Plunge Protection Team’

The Fed and “Plunge Protection Team”: Are They Manipulating Stocks?

The Fed and "Plunge Protection Team": Are They Manipulating Stocks? 
Rumors are, the U.S. government "is propping up the stock market." 

By Elliott Wave International

You will find many intriguing Q&As at EWI’s Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute’s experts. We strive to answer every Message Board reader, and publicly post the best Q&As. 

By far, the most frequent question we’ve been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter’s chart gives an unequivocal answer:

Buying on Bullish News in a Bear Market

[+] CLICK TO ENLARGE

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn’t stop until March 6, 2009 — after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI’s Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

Get the 33-page Market Myths Exposed eBook for
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The Fed and “Plunge Protection Team”: Are They Manipulating Stocks?

The Fed and "Plunge Protection Team": Are They Manipulating Stocks? 
Rumors are, the U.S. government "is propping up the stock market." 

By Elliott Wave International

You will find many intriguing Q&As at EWI’s Message Board. We offer it as a free way for our Club EWI members and subscribers to interact with EWI and the Socionomics Institute’s experts. We strive to answer every Message Board reader, and publicly post the best Q&As. 

By far, the most frequent question we’ve been asked recently is:

"What is your take on the persistent internet chatter that the Federal Reserve is holding up the stock market via QE2, POMO, etc.? How can stocks ever decline again if the Fed is in control?"

We have several active Message Board posts that touch on "market manipulation." But here is an eye-opening chart that will help shed more light on this issue.

EWI President Robert Prechter published this chart in his October 2008 Elliott Wave Theorist. Review this chart carefully. For too many investors, the crash of 2007-2009 is becoming a hazy memory. And almost no one in the mainstream financial media talks about the utter panic in the markets in September-October 2008, the worst part of the crash.

If you think back to that time, you may remember that the Federal Reserve and U.S. government took many aggressive steps to help stop the collapse. Every time they would announce a new intervention, the market would cheer. Result? Prechter’s chart gives an unequivocal answer:

Buying on Bullish News in a Bear Market

[+] CLICK TO ENLARGE

As you can see, announcements of bailouts, unlimited credit, bans on short sales, etc., were powerless against the biggest stock market collapse in 76 years. The DJIA kept sliding. It didn’t stop until March 6, 2009 — after it had slipped below 6,500.

So: Is the Fed and the "Plunge Protection Team" engaged in market manipulation? You can browse EWI’s Message Board for some answers, but one thing is clear: When stocks were crashing two years ago, few dared to suggest that the Fed was in the saddle. Bob Prechter puts it best:

"When markets go up, the Fed seems to be in control; when they go down, it seems out of control. But the control aspect is an illusion."

Get the 33-page Market Myths Exposed eBook
continue reading


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Meet The Latest Member Of The Plunge Protection Team: The European Central Bank

Courtesy of Tyler Durden

The long-debated topic of whether the ECB intervenes on behalf of the euro can now be put to rest. 120 pip move in a minute is not a short cover. It is, and always has been, forced central bank intervention. Bernanke is so happy Trichet is doing his work for him for the time being. Be very wary of buying stocks on this intervention, as Central Bank involvement now at best leads to a 12 hour temporary "fix" to the market that Bernanke et al want to sustain.

 


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DOES THE GOVERNMENT MANIPULATE STOCK PRICES?

Excellent article by Pragcap – I highly recommend reading. – Ilene 

DOES THE GOVERNMENT MANIPULATE STOCK PRICES?

Courtesy of The Pragmatic Capitalist

Hand in Rubber Glove

There has been a lot of chatter over the last year about the government’s involvement in the equity markets. Yesterday’s market action was certainly odd.  Several large institutions were active buyers of enormous blocks of the S&P on no news.  The volume shot through the roof from out of nowhere.  It was not an unusual occurrence.  We have seen it repeatedly over the course of the last 12 months (see here for more).  Of course, this whole discussion has a very conspiratorial aspect to it, but I think it’s less nefarious than many presume (depending on your definition of nefarious when it come to pseudo-government intervention in markets).

The usual argument with regards to government intervention in the equity markets is pretty simple.  The government, or the “President’s Working Group” (aka, the Plunge Protection Team) purchases securities in big blocks and jams prices higher.  Jamming, gunning, carpet bombing (whatever you want to call it) is quite simple.  In any market there are down times in terms of volume.  If you have the firepower (the capital) and the desire you can knock out just about every asking price on the board.  Have a look at just about any Russell 2,000 stock at around noon as the volume slows to a drizzle and ask yourself what you could do with $10,000,000?  Of course, the same goes for the downside.  You can hit the bids and literally knock them off the board in an illiquid market (exactly what we saw in Fall of 2008 with fund redemptions).

Anyone who has ever traded in size has seen this in action.  It’s like taking a machine gun to a medieval battle or sending the U.S. Army to Baghdad (not that anyone would ever do such a thing).  The point is, you can slice through prices like a hot knife through butter, create a certain sentiment in the market that actually generates attention (liquidity) and then get out on the other side of the trade by selling (or covering) to the crowd you’ve attracted.  Of course, if you’re someone who has a longer time horizon than a few minutes…
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Is the Fed Juicing the Stock Market?

Is the Fed Juicing the Stock Market?

Courtesy of Mike Whitney writing at Global Research

Purple stack of money with stock quotes behind

Is the Fed manipulating the stock market?  TrimTabs CEO Charles Biderman seems to think so, and he makes a strong case for his theory in an article at zerohedge.com.

Biderman focuses his attention on the mystery surrounding the stock market’s 9-month rally and asks, "Where is the money coming from?"  After all, the market cap has increased by more than $6 trillion since March 9. That amount of money should be fairly easy to trace; right?

Wrong.

Biderman: "The most positive economic development in 2009 was the stock market rally. (But) We cannot identify the source of the new money that pushed stock prices up so far so fast.  For the most part, the money did not from the traditional players that provided money in the past."

Huh?  So, this vast infusion of liquidity--which helped the banks to avoid painful deleveraging--did not come from the usual suspects?

That’s right. According to Biderman, the money did not come from (a) companies ("which were a huge net seller") (b) retail investor funds,  (c) retail investors, (d) foreign investors, or (e) pension funds.

What about the hedge funds?

Biderman:  "We have no way to track in real time what hedge funds do, and they may well have shifted some assets into U.S. equities.  But we doubt their buying power was enormous because they posted an outflow of $12 billion from April through November."

Okay; so we’re back to Square One. Where did the money come from?

Biderman again:  "As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures.  Moreover, several officials have suggested the government should support stock prices.  For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.”  In a Financial Times article in 2002, an unidentified Fed official was quoted as acknowledging that policymakers had considered buying U.S. equities directly, not just futures.  The official mentioned that the Fed could “theoretically buy anything to pump money into the system.”

Biderman…
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Manipulation: How Markets Really Work

Click here to sign up for a free subscription to the PSW Report.  It’s easy!  – Ilene

Don’t miss reading this enlightening article. "Thank yous" to author Stephen Lendman ("we need a mass public awakening determined to change a very ugly system"), and Tyler Durden for finding.

Manipulation: How Markets Really Work

By Stephen Lendman, posted at Steve Lendman’s Blog and at the Baltimore Chronicle

Wall Street’s mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government’s visible hand and insiders control markets and manipulate them up or down for profit – all of them, including stocks, bonds, commodities and currencies.

It’s financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today’s volatile markets likely ongoing daily.

Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it’s more than just "a process designed to wipe out the middle class. This is genocide (by other means) – a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."

Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it’s more than just "a process designed to wipe out the middle class. This is genocide (by other means) – a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts."

Fitts explains that much more than market manipulation goes on. She describes a "financial coup d’etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It’s a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack…
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Daniel Shaffer Notices the “Invisible Hand” aka Plunge Protection Team

 

Daniel Shaffer Notices the "Invisible Hand" aka Plunge Protection Team

I am glad I am not the only one who notices these things…. I am only speaking as someone who has watched the market since mid 90s and have never seen the behavior I see now. Whenever a key technical average is threatened a magical flood of futures buying comes in. Almost every morning the past 10 weeks pre market futures are green (apparently there is not enough time to buy stocks between 9:30 AM and 4:00 PM). The last 30 minutes has magical reversals – we saw it just last Thursday at a key moving average. [May 21: Bookkeeping - Covering Index Shorts Around 3:30 - 3:45 PM]

There can only be one entity who has the buying power to do this… and with Goldman Sachs as the 4th arm of government you can use them behind closed doors. But I am sure we’ll never know the truth… and I hate to sound like a grassy knoll type but the market just does not act like it used to if you really watch closely. The S&P now regularly jumps in 4-5 point increments in a matter of 60-120 seconds late in the day. In my humble opinion the government knows so many quant and program trades now are tied to the indexes that it is easy to manipulate this market… you lead, they will follow automatically (by their programming). So for a relatively low cost you can move things where they "should be", and the momentum performance chasing computers will support your case. And Goldman Sachs can pile up trading wins since somewhere in their bowels, in the cigar smoke… cheers of victory cry out. From late April via ZeroHedge

Clearly in a ‘free market’ system it would look embarrassing for this type of behavior to be out in the open. But heck Japan was tossing around


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Chart School

What the Baby Boomers turned Retirement Boomers mean for Growth, Jobs, Inflation and the Markets

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

More than a year ago, in spring of 2013, I wrote 2 posts about how the retirement wave of the Baby Boomer generation would result in much lower growth, but full employment (see US Economy: Below Stall Speed or Already Above Potential? and Forget the Jobless Recovery, Get Ready for the Full-Employed Recession). Though more and more economists now recognize that it is to a large extend this retirement wave that has led to a huge exit out of the labor force, measured by the falling labor ...



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Insider Scoop

UPDATE: Symmetry Medical to Sell OEM Solutions Business to Tecomet, Spinoff Surgical Unit

Courtesy of Benzinga.

Related SMA Symmetry Medical To Sell Business That Makes Up 80% Of Revenue US Stock Futures Signal Higher Start On Wall Street Mid-Market Report: Dealmaking on the Rise (Fox Business)

Tecomet Inc., a Genstar Capital portfolio company and precision contract manufacturer supporting the medical device and aerospace industries, today announced that it has signed a definitive agreement with Symmetry Medical Inc. (N...



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Zero Hedge

When 'Anti-Government' Violence Erupts, Who Is Really At Fault?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Brandon Smith of Alt-Market blog,

This past week, I have been examining a recently leaked document from the Department Of Homeland Security entitled “Domestic Violent Extremists Pose A Threat To Government Officials And Law Enforcement.” (Yes; the title leaves nothing to the imagination.)

Generally, such documents are not classified. But it is internally accepted within establishment agencies that they should not be shared with the public....



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Phil's Favorites

Argentine peso hits record lows on increased uncertainty

Argentine peso hits record lows on increased uncertainty

Courtesy of SoberLook.com

Argentina is showing signs of stress, as the official exchange rate has the US dollar now quoted 8.4 pesos - a new record.

Chart shows USD appreciating against ARS (source: Investing.com)


The "parallel" exchange rate also hit a record, with the dollar quoted at 14 pesos - a 67% premium to the official rate. Note that before the first devaluation in 2002 (see this ...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Option Review

CME Group Put Options Active

Options volume on the provider of futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals and alternative investment products is well above average on Thursday morning, due in large part to a sizable put spread initiated in the 19Sep’14 expiry contracts. Shares in CME Group (Ticker: CME) are up slightly on the day, trading 0.25% higher at $74.34 as of the time of this writing.

The largest trade on CME today appears to be a bear put spread in which roughly 1,500 of the 19Sep’14 74.0 strike puts were purchased at a premium of $1.44 each against the sale of the same number of t...



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Sabrient

Sector Detector: Bullish investors jockey for position as if the correction is over

Courtesy of Sabrient Systems and Gradient Analytics

As many investors enjoy the final weeks of summer, some optimistic bulls seem to be positioning themselves well ahead of Labor Day in anticipation of a fall rally. Indeed, last week’s action was impressive. After only a mere 4% correction, investors continued to brush off the disturbing violence both at home and abroad, and they took the minor pullback as their next buying opportunity. But was that really all the pullback we’re going to get this year? I doubt it. But I also believe that nothing short of a major Black Swan event can send this market into a deep correction.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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OpTrader

Swing trading portfolio - week of August 18th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

The Stock World Weekly Newsletter is ready to go! View it here: Stock World Weekly. Just put in your user name and password, or take a free trial. 

 

#120692880 / gettyimages.com ...

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Market Shadows

Helen Davis Chaitman Reviews In Bed with Wall Street.

Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).

Helen Davis Chaitman Reviews In Bed with Wall Street. 

By Helen Davis Chaitman   

I confess: Larry D...



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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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