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Friday, December 9, 2022

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Wednesday: Rampant Manipulation In the Markets – S&P 1,688 Edition

.SPX WEEKLYWe're right on that line again

1,688 on the S&P is a 1.25% retrace off the top and, failing to hold that, we're looking at another 1.25% drop to 1,667 and below that, we're back at 1,645, 1,622 and back to 1,600, which is our Must Hold line for this bull run to sustain itself.  

Now 1,600 is a lot of 1.25%s away, so no reason to panic and we're certainly not panicking about a tiny little pullback (see Dave Fry's SPX chart) of a 350-point run (25%) since November and we're exactly where we expected we'd end up way back in March of 2009, when we called the bottom and begain using 800 on the S&P as a base for our 5% Rule calculations.  

1,600 on the S&P is a 100% gain in what's about to be 4.5 years on Sept 9th.  That's 177 points a year, 15(ish) points a month of gains for 54 consecutive months.  That trend has certainly been our friend and, with all this free money sloshing around, there's no reason to expect it to stop – we're just looking for a pullback to test 1,600 and we've been looking for it since May.  We got it in June but it reversed too quickly so we didn't feel good about the July rally and so, we're looking for a proper drop and just a little consolidation at the 1,600 line and THEN (assuming it holds), we can feel good about cheerleading the next leg up – to 1760.  

Another chart we're watching closely is, of course, oil and, as we keep telling you and our Congresspeople, you can see the scam unfolding as yesterday's pump and dump allowed them to move 58,000 fake orders out of September and shift them to now create fake demand for October (now 281,000 contracts), November (162,000 contracts) and December (219,000 contracts) for a total of 662Mb worth of fake orders in those three months, along with the remaining 185Mb worth of fake orders that are still open in September.  

I say FAKE, because almost ALL of them will be shited (not closed, shifted) to fake demand in the next 3 months over the next 5 trading sessions.  I'm sorry to keep hammering on this point but it is my HOPE that, by showing you this nonsense as it plays out, we will eventually get someone with power to pay attention to this massive rip-off that the American Public is forced to endure – month after month!  

USO WEEKLYMeanwhile, we have our fun with this scam as well.  Yesterday morning, I pointed out another opportunity to short at $107 and again at $106.50 in the morning post.  As you can see, the contract (September is /CLU3 to be exact) fell from $107.20 to $106.20 before bouncing to $106.50, then down to $105.60 and then back to $107 where, guess what – WE SHORT IT AGAIN!  This isn't rocket science folks – all we're doing is showing you how the con works – we can't stop the con, but we can make it more expensive for the con men to run it by taking our cut. 

And what a cut it is – at $10 per penny, per contract, these $1 drops in oil pay us $1,000 per contract and even the little .50 moves give us early morning profits of $500.  All you have to do is manage your losses when you are wrong and you can do quite well and we give ourselves an extra edge by understanding the con game that's going on – and that helps us boost the percentage of the times that we are right.  That's all there is to playing the Futrures!  

Now, we could make money playing this scam both ways but we prefer to TAKE the money from the criminal NYMEX pumpers, rather than joining them in robbing the American people – it's not exactly being Robin Hood but we do what we can to make it harder for them to keep driving the prices up.  On Friday I said that, if we all chip in and sell short those now 185,000 open September contracts, now $107, we can make $1Bn as we drive the price down to $102 as these fraudsters try to escape from their obligation (to accept delivery of 1,000 barrels of oil at Cushing, OK in September in exchange for $107,000 per lot).  

All we can lose is the difference between $107 and whatever higher price oil is driven to x 1,000 per contract.  Granted, that can be a lot but, if we did it en masse, I'm fairly certain it wouldn't come to that because this demand is FAKE!!!  

I will keep pointing this out every month until more and more people believe it and perhaps, at some point, enough people will believe it to take a chance on enough 1,000-barrel contracts that we end up holding enough to make a difference and flood the market with delivered oil, which drives down the price and makes us a fortune (the difference between the $107 we collect and what we have to pay at delivery to cover it).  

Already, as you can see from the chart, yesterday's shenanigans have driven the October contract CHEAPER than the pumped up September contract ($105.60).  How?  Because yesterday's action was FAKE!  It was nothing more than shuffling contracts around so that the traders – who drove up the price of crude since it bottomed at $102.22 on Aug 9th by placing millions of barrels worth of FAKE orders for oil they had no intention of using.  

How could we ever stop this crime?  How about just checking to see if these NYMEX traders have EVER accepted delivery of a single barrel of oil they've ordered and, if not, THROW THEM OUT!!!  Gee, that was simple.  Speaking of simple market manipulation – our old buddy Carl Ichan has moved up from manipulating HLF to manipulating AAPL by tweeting out what you see on the left, 4 minutes apart at 2:21 and 2:25 EST yesterday afternoon.  

Now, to be fair, Carl Icahn's manipulative bullish actions were only a response to Larry Ellison's manipulative bearish actions earlier in the morning, when he told CBS news:

"We saw — we conducted the experiment. I mean, it's been done." says Ellison. "We saw Apple with Steve Jobs," Ellison says as he raises his hand high. "We saw Apple without Steve Jobs," he says while lowering his hand. "We saw Apple with Steve Jobs," Ellison raises his hand high. "Now, we're gonna see Apple without Steve Jobs," he says, lowering his hand. Ellison is referring to the period of time when Jobs left Apple and the company struggled, from 1985 to 1996.

That comment sent AAPL down 1.5% from it's open but the stock recovered (because Ellison is an idiot, and people realized that) but clearly Ellison has an axe to grind and maybe a large short position on AAPL and that sounds like a dinner bell to Icahn, who likes to amuse himself by sticking it to his fellow Billionaires (especially when he can make a buck off it).  

So, all this rich and powerful man has to do is pick up his phone, call Steve Cook and then hit the Social Media with his publicist and, PRESTO!, within minutes of his tweet – the stock skyrockets, the story catches on and, before you know it, the stock has jumped 5.5% off the lows and finishes the day up 4.5%, adding $20Bn to AAPL's market cap and about $50M to Icahn's pockets.  Not bad for 5 minute's work, right? 

"But isn't this blatant stock market manipulation?", you might say.  "Oh grow up!", I am forced to answer.  The Supreme Court decided, in the Citizens United verdict, that both Larry Ellison and Carl Icahn are people and, no matter how obvious it is that they are not human – there is no appeal at this point!  What about us?  What about the little guys who get jerked around by these wealthy assholes?  

hat can we do?  Well, that's why we have Congresspeople – they are there to protect us as our duly-elected representatives – to look out for the little guy and to prevent powerful people from abusing the leverage they have from taking advantage of the average citizen…  

Oops, where was I?  Sorry, I fell off my chair laughing…  

Oh yes, you can write your Congressmen and tell them what BS you think this all is.  Send them this article, I don't mind if they are not subscribers.  We have actually gotten a few responses from Senators and Congressmen and I hope we get more because I can write a joke book just based on the automated BS some of them spew back at their concerned citizens.  Still, the do listen and we feel we made a difference in getting more than a rubber stamp from the Senate hearings on GS and JPM's commodity trading activities and, in fact, the CTFC is now sending out subpoenas for documents relating to LME trading so, go team!  

Never let then think you don't have power – they control most of the media but they still don't control you and, from a financial standpoint, they aren't so clever that they don't leave tracks we can follow – and profit from the following ourselves.  In fact, yesteray at 11:34 am, I didn't need Carl Icahn to tell me Larry Ellison was a fool and I called out the following trade for our Members in Chat (we're already very long on AAPL – see my own morning tweet):  

Wombat's spread is still a nice one if you think you missed the AAPL party.  The 2015 $370/465 spread is now 100% in the money but only $57 and you can offset that purchase by selling $400 puts for $32.50 for net $24.50 on the $95 trade with a $70.50 upside (287%) and, if TOS is correct, the margin on the short $400s is just $40 so, as long as you REALLY want to own AAPL for net $424.50 in Jan 2015 – why wouldn't you park $57 in cash and $40 in margin to make $70.50 (72%) in 17 months? 

Carl Icahn already drove the net on the spread from $24.50 to $31.50, up 28.5% in one afternoon!  So thanks Carl, you evil, manipulative bastard!  At least he's obvious and predictable…

 

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