Stock Manipulation?

This article should not be used by anyone as a predictor of the stock markets or any other financial markets, nor is it providing advice on equity or any other type of investment.  I cannot be held responsible for the consequences of anyone who might make use of the information on this page.  I am not an investment advisor, nor am I a stock or market analyst. This is a historical and somewhat subjective assessment of what the markets have done, not a prediction as to what they are going to do.  My own bias is towards the view that we are currently in a bear market, even though the numbers tell a different story.  So consider yourselves cautioned.         The three US stock market indices all up nearly 25% in four turbulent months, breaking support levels to the upside time and again, avoiding days that exceed 1% loss, day after day markets which are negative or heading down time after time surge up and positive, markets which appear to be deaf to any bad news but have made all the gains of the August 2011 crash back upon hope alone?  What is going on here?

Updates

May 18, 2012 So as the G8 plan to meet presumably to give the President a chance to push for growth-which we must presume to mean stimulus rather than austerity-there is no question that with debt to GDP levels at what they are that austerity will have to come sooner or later, but given the option they always prefer it to be later.  But what is the cause for all this biding for time?  Do they know something we don't?  Or is it merely blind hope that something will happen.  But the week in the markets was simple enough, no sign of manipulation, and they simply slid all week.  And while I am not going to make any market predictions, if government manipulation caused the market to go up despite everything we may have entered the phase of the market going down despite everything.  In other words, sinking like a stone.  So far in May it seems to be happening, and with the VIX up over 20 all week it looks like their intentions have been put on hold at least.  But this hardly means that they are not still intending to stimulate the economy, and if they had their way I imagine they would wish Q2 for 2012 to be something above 2.2, to give the impression of economic improvement.  But given the deteriorating situation, and really it is not so much worse now than it was in October, there is little they can do, but no doubt they will do something rather than do nothing.  While the FED, meanwhile, has been maintaining their pledge, as they have been teasing us with since October, that if the economy falters they will come in with more stimulus.  But it would seem that if they could do anything they would be doing it already.  And one more thing, as I have constantly observed over the past seven months, that whenever some indicator falters in a given month, somehow miraculously it leaps up the month following, almost by magic, which I find very suspicious. Then there was the Facebook fizzle today, but what I thought was peculiar was that the price was never allowed to drop below 38, and I found this to be kind of curious.  At the end of the trading day for many minutes you could see the stock going along, alternating every few seconds between 38.00 and 38.01, but never going to 37.99.  (Apparently this was the work of the stock's underwriters.)  But it ended at 38.23, as it was driven up slightly just in the last minute of trading.  But here is what the week on the market looked like. May 11, 2012 What to make of this week?  It seems to me the only thing that is keeping us from being in the same recession Europe has entered is simple: executive power.  Any country now which has a firmer control over the economy can better control the situation, and this is less true of Europe than it is of the US or China.  So it is not surprising to see executive power being used, although others have come to the conclusion that what is keeping us out of recession is credit cards (Bernstein).  And now that the Executive Branch of the US has done all they can to drive up the stock markets (artificially) and to drive down the VIX (artificially), we find a democratic pundit (Larry Summers) now coming out to reinforce the view that these alone indicate that the recovery is well on its way and 'ahead of schedule'!  Either he was never told why these things were up or he is merely being the voice to emphasize the only sure result the President's policy has accomplished.  But it is all window dressing, which fools most of the people some of the time. I wished to wait until today to secure the view that manipulation is not yet over, even if they may have changed from an IV drip to regular injections.  However, we could see on Tuesday that after a CNBC analyst said he was keeping his eye on whether the S&P breached 1360 to predict whether the market would continue up or continue down, low and behold after 1 pm the market began to swing up, and climbed just above the requisite 1360 and remained there to close.           The news has been far from good out of Europe and China and the US, and yet the more this creates a panic at headquarters (the White House) the more of an attempt is made to assure things look more favorable than they are.  Here we can see three days of market turn-arounds, one at about 10:30 am on Monday, one about 1 pm on Tuesday, and one at about 10 am on Wednesday, all early and all off the lows of the day.  Yet not clearly perhaps smacking of manipulation, just coincidences worth looking into, if anyone would do so.  So how about yesterday.      Here we see yet another reversal at noon, with the NASDAQ holding just above its break even, though dipping at the end.  The gain on the Dow is suspiciously coming off of a negative low at the very last moment, as though someone wished to be sure to produce a positive result for the day, breaking the Dow's downward trend.  But knowing what the government has been up to, it is impossible to believe this wasn't concocted. But as I write this now it is only just past noon on Friday, and here is what the market is doing,      If you notice the S&P is still running about 1360, and it has established this base throughout the week.  So what is so special about 1360 on the S&P?  It becomes obvious when you take a look at the VIX. 1360 on the S&P holds the VIX at a level of about 19, because they must have determined that when the VIX breaches 20 it tends to be indicative of a situation worthy of investor concern and perhaps panic.  And everything that has been done since October has been to avoid headlines like Bear Market! and Default! and Recession! through huge infusions of money into the economy, and this includes anything else which could induce a panic.  Thus we see that this has been the strategy for the entire year thus far. Notice here that whenever the VIX reaches 20 it is yet again driven down.  And thus it could be someone is under orders to prevent the VIX from rising above 20.  So we might consider that markets which are permitted to fall so that the VIX exceeds 20 by a significant amount, would be indicitive that the market manipulation has ceased.  But if they have carried on now for over seven months, it is difficult to think they are not prepared to carry their plans out for another six months until the election, though the evidence is that they might have gotten close to their 'fiscally responsible' limit, but this is difficult to determine.  This, of course, presumes they have luck on their side and are able to manage the rate of global economic deterioration and to avoid any headlines which would cause the impression of 'panic' and lead to a 'crisis'.  Thus we can imagine that they will all be crossing their fingers this summer. May 5, 2012 We have perhaps turned a corner, because this week, markets up or down, I did not see any clear signs of the markets being manipulated.  On top of this we had the first day when the markets fell more than 1% in quite a while, being as it was the greatest decline so far for the calendar year.                April 27, 2012 Mo' money, Mo' money, Mo' money!  From where comes all the money which is inflating these markets?  Today we would think with yesterday's Spanish downgrade and today's announcement that the US economy grew at a paltry first-reading value of 2.2% that the markets might take this as bad news.  There was an initial slide but by the time the markets opened they were up, and although they fell again, once more before those pesky markets might be allowed to go negative they suddenly surged up again and we enjoyed another buoyant day on the markets.  In fact, but not surprisingly, the Dow has recovered all it had lost in the last dip, which might be attributed to earnings, but the news has been, at best, rather mixed. While it would appear that April might have been the month they kicked the habit, as we saw before things went into such a deep slide they have brought them back again.  This economy, however, is on life-support, and for some reason the government is committed to see that the markets do not fall, even while econoimc strength dwindles, but this might have an even more unpredictable side-effect, since the stock market falls prior to the point when the economic flaws begin to show in earnest.  But if the market is artificially held up and these economic flaws become evident, what occurs when everyone then is 100% certain of a market crash?; it is rather like placing a bet on something in which you know you could not lose.      But in addition to pumping funds into the stock market they have also been into the economy, turning around the 1.8% Q3 number to 3% in Q4 nd now 2.2% in Q1, but the statements by the Treasury and Federal Reserve that the economy is on the road to recovery seems much more like a coach trying to instill optimism more than it is a reflection of reality, so it merely becomes difficult to know how far they might be trusted.  And given that after all the many (mostly hidden from the public) frantic manouvers that have been applied to save the global economy from falling into a world depression, they come out with almost a calm assurance that all is well, or at least improving.  But this is really open to interpretation, for at this point one could collect evidence to prove a slow recovery or a slow decline, but if this is so, even the titanic effort they have put forth has only produced the most modest growth, and only in the US, and even 2.2% might be an optimistic measure of first-quarter economic growth. So here are the charts from yesterday and today.  Yesterday the market was likely thought to continue on the optimism of the Apple earnings story and the statements by the Fed that the economy was improving, but when it sputtered at about 11 am the government took full hold of them and so it is not suprising that they then rose up nicely and were forced up in the afternoon, which was repeated again today.  So don't delude yourself about the markets, they are proceeding according to the government plan, according to what they want the markets to do.  The red arrow indicates the point at which the markets were distracted from their natural movement.                It would not be surprising that other upward movements this week were also due to infusions of government money, but these prove to be the most obvious.  For the markets over two days an increase of about 1%.  Pat yourselves on the back, a job well done, and have a nice carefree weekend. April 17. 2012 Yes, Virginia, there IS a Santa Claus!  If the White House guiding the US Treasury and Federal Reserve had thought that after six months of pushing up the stock market to simulate a bull market that it was time to allow the markets to now continue on their own, today proved that they had abandoned this and taken the driver's seat again.  Everything that had begun to fail in April suddenly reversed again, the US stock indicies were up between 1.5% and 2.0% without faltering after they reversed course in the early morning.  In addition to that they went back to buying Spanish debt to drive down rising yields, they drove up Apple which mounted an incredible turn-about recovery of 5 %, and the volatility index was driven down by 6 %.  Yes, you can have everything you want for Christmas, even if it's in April.  (Isn't debt wonderful!)  So here are two charts indicating the influence to save the markets from the skids.  The analysis are still convinced this is all part of normal market activity, or else they know about it and are keeping their mouths closed.  After all, many professionals just apply mechanistically what they have learned, rather than to be requried to think and judge for themselevs.  But the very fact that they would think that these heroin infused markets would falter according to their market models, does go to prove that they are ignorant or in denial about what has been driving the markets up.  Perhaps they would just rather not know.    April 12, 2012 No trace of stock market manipulation this week, including yesterday's gain, until today.  Attempting to offset the continuing gloom brought on by a market in decline, so they put in a day to brighten the faces of Wall Street at least for now.  Anything relating to GDP for China and the US are undoubtedly going to be either artificially gained or falsely claimed, as the US in the Q3 announced 2.5% growth, in line with expectations, only to have to revise it down to 1.8%, but they did delay a sell-off long enough for their liquidity-fuelled stimulus to give the economy a boost in Q4 and seemingly for Q1 this year.  Although it might make sense that improving economic figures should lift the markets, it has been mostly bad news which has been responsible for the market levitation this year.  Thus governments are scrambling to actually stimulate economies to keep up with this artificially boosted market.  So as long as the government liquidity stimulus continues we are not likely to have slower growth, but how long can it continue?  As the growth is gained at the cost of higher inflation, one really must wonder if it is, as it must ultimately be, a wash for the economy at best.  Anyway, here are the charts which reveal that direct stock manipulation isn't dead yet.                I would be curious to know statistically since October 4th what proprotion of the time the markets have finished at their lows of the day.  I would anticipate it to be both an extremely low and unusually low number. March 30, 2012 Does this harmless uptick mean that we might predict a market turn-around, where the market will rise to or above its break-even and stay there for the rest of the day?      Not truly a surprise.  See the Dow bouncing off its previous-day's break even before exceeding the previous maximum.  To a best market performance in first quarter since 1998!  And the market overvalued by 50%!  There it is, the government is now behind the wheel and driving these markets.  March 29, 2012 The government is showing us that you can drive the market up if you have a few hundreds of billions of dollars to spare, but if this is the strategy to bring money back into the market it hasn't worked, in fact it might have been better to allow the market to fall if this is your goal.  It only goes to show that what one wishes to achieve might be achieved but if it disserves its purpose then what is the point, but worse, that it prevents what might have actually been a better means to those ends.  So now calculations have shown that stock inflation has put stock values 50% above what they should be, though the article attributed it to corporate 'buy-backs'.  In addition the economic reality hasn't improved despite the manipulations going on, and thus public sentiments are not driven by the market, nor is the economy.  I have included here only a few charts, starting with todays, where again we find an exceptional market turn-around, driving it back to break-even.  And as has occurred severeal times before, when Europe drops yet the American markets, which used to be tied to the European markets, are now still proving their insane buoyancy.      Today we see early spiking and then the inevitable turn-around leading to an unexplained and inexplicable surge to near break-even.  Yesterday we also saw a late-day recovery which reduced the losses to only about 0.5%.  Though it seems the manipulation is only being done when the market begins to fall, and since it began its application has grown more and more subtle, yet the intent is still apparent.  There have been some recent declines in the market, but they are always followed by rises, typically exceeding previous highs, both intraday and day-to-day.  Here are four charts which show the same patterns indicative of manipulation.  Two show a rise and levelling, one shows a fall followed by a recovery, the other a rise which pushes up to regain the maximum for the day.  All of this indicates a planned intention for the markets.                March 12, 2012 This appears to be an often-used method: push up the markets and then drive down the VIX.  This has been their essential strategy for the US markets.  So although the markets were nearly unchanged today, the VIX went down over 8% in one day.  The only reason this is significant is psychological, so as to convince people that the market is stable.  So when it fails to reassure people then they figure they can drive it down even more, assuming (it seems) that eventually things will improve and investor confidence will be restored.        February 28, 2012 So far this week we have two very familiar patterns, the first on Monday is a market that rises and then hovers most of the day right above its break-even for the previous day, the second today where the market rises and then falters, skips off of its break-even and then rises to reclaim its prior highs.  This indicates to me that once it is determined that such a gain is sought once it is lost it is gained back again.  In doing so they also fought hard to assure the Dow closed above 13,000 after some noticed it had missed a couple times, and it looks like the next numerical goal for them is a 3,000 on the NASDAQ.  And this is in the face of more economic bad news coming in today, with durable goods orders plunging 4% in January and home prices still on the slide.      Watching this market is like watching a magic trick, to dazzle and amaze, and give people just what they want: a market which always goes up and never falls.  But in another way this entire thing reminds me of the life of a star, which at first burns Hyrdogen when the sun is bright and stable, then when the Hydrogen has all been converted to Helium this then becomes the fuel, then after Helium then Carbon is burned, etc.  And in this case to have a growing economy first we have the creation of wealth (industry), which is the best situation, then when this falters we begin to revive it through debt (borrowing), and this keeps things shining for a while, when this has run out then we have liquidity (printing money), and this keeps the fire going a bit longer until it runs out until we must rely upon deception (lying).  And this is where we are now it seems folks.  Although you know the collapse of a star happens suddenly and without warning, and I dread to think what the outcome of our current circumstances might be.  No one really knows, although debt and liquidity and deception are tools to boost a faltering economy, it is still a matter of uncertainty as to how well such things might really be controlled.  Just look at Apple stock since the economy began to turn sour.  This doesn't seem at all natural to me. February 25, 2012 It makes me wonder when we have both Geithner and Obama making statements that there is no 'quick fix' for rising oil prices, whether they believe there are quick fixes for a declining stock market.  So as to say, we would do something if we could, as we have before, but we can't this time.  In any case, now people are beginning to notice more than just the market gains that the US markets are clearly detached from other world markets, and that no bad news perturbs the market.  But it is not merely that the market is going up that is the key, it is the intraday market reversals, its tendency to turn any decline into a gain or at least a break-even, and its predictability.  So we are faced with the question of whom are we going to believe, for if the infusion of money is designed to offset a depression, it might merely be like taking aspirin: it makes the pain goes away but provides no cure.  Thus here is the week in review.                We should not be surprised that the SP is attempting to regain its high from 2011.  Although on Wednesday we see that there was a decline, even so a decline of less than 0.5% as usual, this has happened before, because it is made up on Thursday, even though the unemployment claims were only steady, and on Friday gains continued, though dropped back, though were halted and ended near break-even on the Dow.  So despite everything yet again a modest gain for the week.  Though most still appear to be finding ways to explain away this behavior according to conventional (non-manipulative) reasons.  Though even the decline on Tuesday may have been more severe if there weren't attempts made to boost it.  It was about the middle of the market day on Thursday that the Treasury had another bond auction, right about 1:30 when the market went from a slow downward decline to a slight upward increase. February 17, 2012 Another day of market reversals, here the S&P shows the same characteristic downward move followed by a morning rally that continues in positive territory for the remainder of the day, but far more interesting is the forcing down of the VIX, which was beginning a slow climb again above 20 before it was rapidly forced down again partly by large fall on Friday, which we might compare to December, where here a modest 0.24% gain on the S&P is matched by a tremenous 7.5% decline in the VIX.  But this would be explicable if we realized that having the VIX trending up can be viewed as just as bad as having it too high, thus as the Dow is forced up to 13000 and the S&P to its 2011 highs, in two days the VIX was forced back down to its prior lows.  Perhaps merely to change the lingering gloomy sentiments about the global economy, and we might add that this perception remains despite the recent and inexplicable 25% gain since the October lows because apart from the markets moving up the actual world economic news has gotten increasingly bad, especially since August.  For many have been persuaded merely by the gains themselves, such a stellar rise though has not come with anything but expectations, but what we have here is a market that is changing people's attitudes, which is one of the reasons that it would be driven up in the first place.  But here are the charts to look at for today.  I have seen nothing yet to convince me that these marekts are moving by their own forces.  But it also is based upon a 'more of the same' approach: if the markets might falter than drive them even higher, drive the VIX even lower, until the situation might be improved for real.  Politics is often about managing headlines, and winning wars through strategies of deception, and here we see no exception to being persuasive through influencing not what is occuring but how people perceive it.      February 16, 2012 If you buy into the idea that the Federal government started tampering with the US stock markets in October 2011, and perhaps with some comparable attempt made in Europe by the EU, that this was merely part of a wider plan to 'jump start' the world economy.  Conning investors with a growing stock market would not be sufficient, because eventually it would fall in any case.  So it is not surprising that we have seen at the same time a sudden, dramatic, and consistent drop in the US unemployment figures, from their stagnation in summer, and likewise certain improvements in housing starts and manufacturing, but not in housing sales and retail sales.  The reason for this is simple, that if the government recognizes the failure of the housing market and manufacturing contraction as being indicative of recession (this is an interventionist administration folks) that they are going to do what they can to give the impression of an improving situation through government purchasing.  Although most people do not remeber the Great Depression first hand, this is precisely what FDR did to help to raise us out of the Depression.  The motive for such a move is that if the economy falls into another recession it would undoubtedly be on the scale of the Great Depression of the 1930's and such a thing is perhaps the justificaiton used for direct manipulation of the markets of the world.  The difficulty is, in order to prevent a financial panic, employment numbers do not only need to be down but trending down, thus we are not likely to see an uptick perhaps until after this year's election, because any such change would indicate the trend might be reversing, thus weekly claims and monthly unemployment are likely to show a declining trend through the election. Also PMI numbers in the US are likely to be improving due to an infusion of hundreds of billions by the US Treasury or Federal Reserve that started in the 4th quarter of last year.  But if people knew these improving numbers was government-driven, they would be far less optimistic and far less 'Bullish' about the stock market.  The trouble is, any time it is made known that something is required to get the markets moving again (low VIX, improvement in housing, settlement of EU debt crisis), we suddenly find it arises (they read the papers too, so to speak).  So they are keeping the enitre operation secret, but you can identify it in any case.  These sudden improvements only began as the economic situation grew more dire and perceptions were becoming pessimistic, in the 3rd quarter last year, and this theatened the 'economic recovery' that they were already taking credit for.  Meaning you can predict that at some strategy meeting in September, when it became clear we were potentially going to fall into a global depression and perhaps a finaicial abyss, that several things needed to be done: the US stock market needed to be brought up to prevent the headline "Bear Market", prevent a crash, and restore optimism; the European debt crisis had to be accomodated by the purchase of EU bonds and some sort of 'bazooka' plan; the unemployment numbers had to be lowered; the PMI numbers needed to be raised to avoid contraction as they headed down to 50; the housing market had to show signs of improvement; and in addition they had the payroll tax and unemployment insurance to deal with.  Recall that no bad news has prevented these things from transpiring, and things recently have suddenly started to seem better and brighter, despite everything else.      It should not be surprising then, that everything that we might have hoped for to reverse the worsening situation has suddenly arisen, almost made to order, a minor miracle perhaps to the unwary, a market up 25% from its lows in early October.  But if we recognize they are at least accomplishing a few of these, then we must also presume that this is a multipronged attack.  If this is so we also will see a consistent and steady decline in unemployment figures month after month, because this gets a lot of attention despite the fact that the Federal Receipts (how much income tax the federal government is bringing in) have apparently not been increasing with these lower unemployment numbers and higher job creation numbers.  In addition retail sales have taken a hit, even the Holiday shopping season was weaker than expected, but the government cannot pump money into retail purchases without threatening a rise in price inflation, it must only put its money into things that will not cause immediate price inflation.  (Perhaps what we are perceiving in the stock markets is merely stock price inflation, when the price of a thing far exceeds the value of a thing.)  But it must also rely upon future economic growth which is the only thing that would allow them to make up for the stimulus spending and money printing they are partaking in now as a 'short term' operation to get things moving again.  The other thing that the government cannot have a direct impact upon is company earnings (although companies can by buying back their own shares, as was happening in the Q3), which were not actually so good for the fourth quarter (Q4), with more than half missing their targets.  So what is driving this economic recovery if it is real? Also we will see a consistent decline in new unemployment claims from month to month.  The reason for this is that any uptick could trigger a market crash, which would indicate that the situation has turned a corner and might worsten, although by pumping money into the stock market they can drive it up even when the sentiment is that things are bad, as when January new unemployment claims bounced back up to nearly 400,000.  The administration is hoping for a Break Out, they are putting all their bets on the European situation improving and the US economy strengthening, and merely upon the hope that this would arise, our markets have rebounded to above where they were when the economic situation was showing signs of faltering.  But this attempt to infuse new money from the printing presses and from bond sales into the economy does not offer any guarantee of success, it is a gamble and a con.  It could merely be a Battle of the Bulge, where there is no Break Out and the trends reverse.  But for the moment we must recognize that an apparent improving situation is what they are relying upon, even if they have to fudge the numbers to perpetuate a downward trend.  It would be very surprising if we did not see February unemployment numbers below 8.3, at 8.2 or 8.1.  Because they know that if they announced it up to only 8.4, this would indicate a reversal that would go against the sentiment being held up now that 'at least things are heading in the right direction'.  In addition by putting the markets on a steady upward trend for six months they can then reverse the declining 200-day average trend until this catches a headline too.  Our economic system is based upon optimism, and this is the only thing which is keeping optimism alive folks.  I just thought you should know. So after the noticeable but not significant declines yesterday and the start of a precipitous fall in Apple stock, it is not surprising that we find both new unemployment claims falling (just a bit) and some PMI indicators showing signs of improvement.  But as we see market losses can easily be made back, and on any day when remotely positive news might disguise another upward burst in the market.  And today's increase accomplished three goals, to make up for yesterdays losses and then some, bringing two of the markets to new multi-year highs, and we should not be surprised to see an intent to breach the 1350 technical level on the S&P just to prove this market can deliver the requisites.  But if the market cannot be allowed to go down then it only must either stay flat (which often creates an anticipation of collapse) or to keep rising, to prove that nothing can stop this market.  And as we see that when earnings are not as bad as expected, as we saw after the 3rd quarter we might manage a slight market smile, when we see that many earnings are depressed with the occasional exception, this might not reduce us to tears, but it is difficult to recognize what could be sending these markets to new multi-year highs but for three things: hope that the economic situation is at least improving, expectation that stimulus will drive up the stock markets, and the direct intervention of the government into these markets to keep them up and rising.      Notice today's 1% gains, and such gains have not been absent even as we see an increasing divergence between the economic numbers the government cannot control and those it can, but we have to go back to early December to find a loss in the markets greater than 1%.  The maket movement today was up but anemic following the announcements of the decrease in new unemployment claims, but what transpired later in the day can only be described as 'building a stairway to heaven'.  Sorry, but I do not see a natural climb based on optimism here.  All we would need is one headline in the newspapers that there was an investigation underway to examine trading irregularities in the market since October, and that would be enough to put it down, but the media are apparently dazzled by the lights or asleep at their posts.           February 14, 2012 Apparently when it comes to the direction of the market, a worstening situation in Europe is secondary to the strengthening US economy, no wait, apparently the weakening of the US economy is secondary to minor progress in Europe.  It all depends on how they determine to characterize why the market might be going up.  Suddenly after European downgrades and worse than expected US economic data, suddenly the situation in Greece goes from being 'irrelevant' to suddenly warranting a late day rally.  Today the market slipped until the very end when in the final half-hour it recouped all its losses, just enough to bring it back to its break-even point.  While everyone seems to be asleep at the wheel someone is sure good at hitting his targets.           February 13, 2012 Despite a pause and actually a decline on Friday (though markets still did not fall more than 1%), today the same pattern was apparent, a market that started down and then reversed and went up and stayed up (day after day folks).  In this case, however, the goal was not to maintian maket integrity but to engender optimism, and thus it is almost identical to the sort of reaction we saw to the EU deal last November 10th (compare the charts).  In other words, to assure a positive response from the Greek bailout.  But it also illustrates that once one begins manipulating markets it becomes very difficult thereafter to not jump back in when one wishes to regain the lost highs of the day as much as to prevent the indices from gonig negative.             compare:  February 9, 2012 Now having driven the markets up they cannot be allowed to fall, so it is no surprise that we see either break-even or slight gains on a day to day basis, for any fall could be the start of a crash, so as long as the money lasts, upon this reasoning, there is no reason to think the markets would be allowed to sink.  It hardly needs mention, another day like every other day, down followed by up, all three indexes ending the day positive.  They are convinced that by keeping this up eventually the markets will take off on their own, but such a thing has never been done before, how can any of us know what the consequences are of having the Federal government sinking billions into the stock market?  What can they do now but keep pressing on, hoping things will get better.      The infusion of money into the economy through the fourth quarter might be the explanation for the sudden surge in Apple sales, leading to one of the biggest one-month rises in apple stock ever.  Peculiar under the circumstances, but not if your assumption that technology is the engine of economic growth and that Apple is an innovative company that might help generate an economic recovery.  Not to mention merely creating something to be optimistic about, or to merely offset the despair that would be caused if even Apple was suffering losses.  What a surprising thing however to see just when things are looking bleak that we have a sudden turn around in the 4th quarter, yes Washington politicians are aware of what people are using to gauge the economy too.  It is the same sort of thing people do who cheat to boost their GPA, because they know people will use this as a reliable measure to judge them.  So are we convinced that we have been in an economic boom since July that would raise Apple's share price from about 300 to nearly 500 in just six months?  Wow, pray for a sluggish economy! February 8, 2012 Was it a surprise that today we find the stock market reverses its trend, gains at or above its break-even point, and then fails to go back down again?  Certainly not if you are aware that the market is being driven.  Notice the same 'check-mark' shape we have seen day after day since the start of the year: market heading down and then reversing in mid-day and going up and then staying up.  Again, another negative day turned into a day when all three indices end positive.

What's Driving These Markets?

How might we consider stock market moves as making sense?  Certainly markets are difficult for humans to comprehend because they do not think like humans do, but what occurs when they do?  If markets begin to think like people then they become predictable based upon the assumptions and goals of the mind that is driving the market, and it is no longer about 'market psychology' but 'human psychology' which is far easier for a person to understand intuitively.  Yet we still can regard that certain things do drive the market, that good news for the markets will drive them up and bad news drive them down, but more often than not we have also found this is not so straight forward, because bad economic news in the past two decades has led to a lowering of interest rates by the Federal Reserve (Fed), which is viewed as being positive for equities.  Thus for the past couple decades we have seen a consistent decline in interest rates and thus whenever the economic news is bad the market often responds with a rise.  Counter-intuitive, but only in terms of the assumptions you start with.  But then what happens when interest rates are already set at 0% as they are now?  You can do what they call 'Quantitative Easing' (QE), which is when the Federal Reserve purchases bonds to drive down interest rates, and this drives up equity markets, and we have something else which has been unheard of, that the Federal government actually attempts to manipulate equity markets directly by buying stocks.  But has this ever been done?   Certainly we would not know of it because if people knew that the government was driving up the stock markets artificially, it would eliminate the impact of doing so.  The result must be a psychological effect, creating the sentiment that stocks are going to go up in value and this must be believed truly.  If one knows the government has been driving up stocks artificially it would probably induce a downturn, but if the government came out and announced its intentions, there are perhaps many who would buy into the market on the expectation that it would rise, and clearly it would.  So consider the market movements since October, clearly a definite and unstoppable upward trend, so that we end today with the stock market indices precisely where they were prior to the fall in August.  And is this because the fears of August and September were unwarranted?  Clearly the overall impression of the global economy has gotten worse, but the impression has also been created that the US economy at least is on an upward trend.  The hope of improvement alone has apparently been the cause of the recent stock market recovery, but should we have recovered so much and so quickly merely based upon hopes that things were getting marginally better?  Let's look at some very interesting evidence, and this is evidence that could not be presented anywhere else, as you will soon see.   Let us consider the markets movements starting last year, which is 2011, and it is rather clear that the markets were up but remained flat through the spring and summer, in fact the markets hit their peaks in early May and then fluctuated from there until early August when they crashed more than 10%, then entered a narrow ‘trading range’ for two months, eventually nearing a 20% decline from their peaks in early October (3rd and 4th), which would indicate a ‘Bear Market’.  But just as the S&P 500 index was about to reach this critical point on October 4th, the stock market suddenly skyrocketed, apparently on the news that Europe had announced it was going to recapitalize its banks.  In fact this was apparently such good news that upon the mere “hopium” of it, as they were calling it then, the S&P surged up from its closing low of 1099 to 1253 by month’s end (with a closing high of 1285 on the 28th), a gain of 14%.  It was uncertainty about the European situation that caused the markets to fluctuate throughout October, but if they came down they were not down long, as any downward plunge was followed by a surge, and then usually a plunge again, but it was “hope” which apparently kept the markets up and “fear” which drove them down.   So now I am going to proceed by providing some quotations from my market journal.   10/4 The market was at its peak and began to decline, then in the final half hour or so it just skyrocketed, essentially back to where it had been the end of last week.   10/6 Another up day for no apparent reason.   10/10 Markets up 3%.   10/18 Market went up today for no apparent reason.  But Apple missed earnings after close.   Perhaps we had forgotten that just in the 3rd quarter of last year that Apple had actually fallen short of its earnings forecast.  And the markets did fall on this news the next day, a whopping 1%.  But let us proceed to the end of the month, as we see the market heading towards its especially buoyant peak of October 28th, amongst the uncertainty and declining global economic outlook.   10/27 Though initially it fell and then suddenly jumped about noon.  My concern is that the Federal government, the Fed on orders from the White House has been pushing up the market since its low.  For strangely just as the market was down 20% Europe announced they were going to recapitalize the banks and the market immediately surged…I have been thinking this for the past couple weeks…I would not be surprised, however, although no one else has suggested equity market manipulation by the Fed.  In any case today’s rally seemed somewhat juiced too, for if it had been a rally on optimism it would have started high and continued high for the rest of the day, which was not the case.     At the risk of giving anyone who might wish to manipulate equity markets a tutorial on what to avoid, I am now going to proceed without giving so much detail that they might keep their activities hidden.   The key features which suggest some form of manipulation of the markets arise from the US stock market intraday performance principally, but also their day-to-day performance.  It is fundamentally based upon predictability: normally the market intraday varies up and down, and one cannot predict how it will move through the day.  Anyone who trades the market knows that a market that begins up initially can end negative, a market that starts low can end positive, the market can zig-zag all day, go up all day, go down all day, and certainly has a mind of its own which on the intraday level is impossible to predict; in other words it appears sufficiently random.  However since October it had become distinctly predictable.   The difference is that the markets are not being controlled by a single mind, so its performance has to be understood by market analysts, who attempt to understand “market psychology”, but when the markets are controlled by a single mind and that individual is rational (only giving them credit for being rational in the sense that they can set goals and do what they believe moves them towards those goals), and thus all one need do is to understand the intentions of this one person and thus the market movements become simple to predict, predictable upon the goals that are set.  And the movements of the US market indices beginning in October suggest the following simple goals: get the markets up, keep them from falling, and reduce volatility.  Everything which the markets have done have followed these goals and have been rather oblivious to anything else, and in psychological terms would be termed a ‘psychotic’ behavior.  The fact that the markets are consistently going up would be a ‘manic’ behavior, and that they are persistent could almost be termed an ‘obsessive’ behavior.  So now that we have characterized the new market psychology, let us proceed into November, 2011.   11/2 …after the Fed statement the market fell and then rose up again.    11/3 The market was dropping quickly then suddenly turned around and went up for the rest of the day, which really made little sense.    11/7 The market surged up in the afternoon.   11/8 The market was going down, then it came up in the afternoon again and it seemed as though it was being manipulated again…the market going up because the Italian PM is going to resign!    11/9 There was a tremendous downturn in the markets.   11/10 Watched as just as the markets hit break-even they were juiced up and then as the market fell during the latter half you could see it spiking up with insertions of money.   Apart from the 9th of November, the market showed an incredible tenacity to go up, on Monday and Tuesday the markets were actually headed clearly down until the afternoon when some headline out of Europe suddenly caused them to spike into positive territory.  On the 10th of November came the first of the EU deals, and the three market indices upon that day were all positive (Dow, S&P, NASDAQ).          But what a strange looking chart, for this is nothing like what we would expect when there is market optimism.  In fact the chart reveals that the markets started the day high and then were turning down and about to go negative before they came up again in two successive moves, then again around 1 pm it pops again with a fight to the finish for gains.  And the NASDAQ barely ended the day positive but positive nonetheless.  But what can we learn from this chart, because it shows some interesting and inexplicable characteristics.  The downturn after opening certainly doesn't indicate optimism, but did these markets push higher in any case.  So let us look at the day following, on November 11th.     This looks a bit more like an optimistic chart, but hold on, why does it show distinct points where the market suddenly climbs higher?  Usually such rises are random and climb through the day with stochastic fluctuations rather than these regular patterns, showing signs of upward pushes from 10-10:30 and jaggedness through the day.  These look like they are being forced up and then held up through the day, and all markets end the day near 2%.       But what happens after this, since as it turns out November 11th marks a peak in the markets, and then from there until November 25th they clearly are in decline, with the S&P dropping to 1159 (a drop of over 8% from its value on the 11th of 1264).  So if the markets were being manipulated, what happened after November 11th which started them on their decline?             I cannot be entirely sure, but read my journal entry from the 11th:   11/11 Again seeing the market being manipulated to drive it up to 2% and keep it there, so about 1:20 I sent a message to the Fed and to the White House about it.    The markets declined starting the Monday after I sent a letter to the White House telling them that I was aware that they were manipulating the markets, which by this time I was certain they were; as I said this decline continued until the 28th of November, the Monday following Thanksgiving break in the US.  So what happened after operations resumed on the 28th: in three days the market had climbed back to 1247, a gain of 7.6%, partly on the Wednesday news that the Federal Reserve was going to offer money to Europe at lower rates.  It must have been some pretty special news to drive up the markets that much, or else we would have to presume it was merely a cover to allow them to drive the markets up to where they had been before. So let us leave this question for now, and be willing to admit that this manipulation might not be real, but wait for further evidence to see if we can be certain.  My journal continues:   11/30 It was up about 4%, although I’m not sure how artificial this was it was clear to me at the day’s end that the market was being manipulated to bring all the indices above 4%.   12/5 The markets were up slightly, but it appeared to be another manipulation.  The way of knowing is to see that the Dow and SP both started up over 1% but the NASDAQ didn’t...then entirely out of step with the other markets rose up to over 1%.  This is clearly with an intention to assure all the markets are up on the news from Europe, and this has occurred before.  It is ‘goal oriented’ market movement…and it very much seems as though the White House is banking on a resolution in the EU so that they are merely temporarily bolstering up the market until they come up with a solution,…My theory is that the White House is having the Treasury print more money and this is being put into the markets to keep them up, but they are banking on this being merely a temporary measure to keep the markets up until the EU solves its problems.  I also think the Fed move last week was designed to send dollars to Europe to bring down bond yields.  This is why the White House is so frantic about a deal in Europe, they are buying them time.   12/6 I could see again signs of manipulation, which is needless to say always to the upside.  This has only been the case since early October, before that the movements were more natural.  One characteristic of the manipulation is that the markets are not being allowed to fall for several days in a row, and these ‘record gains’ for the month of October and last week are also signs.  Under the current climate these rapid upward surges and continued upward pressure (‘risk on’) are inexplicable and clearly this is reflected in how the market charts look.  Just to start today in the green would have taken a tremendous infusion of money.  It seems odd that a political statement would have more weight than the financial reality, but this is only because political statements can be invented…And the improbability of the negative news being permitted to create even a single negative day, shows they are fearful of anything which might trigger a crash.   Now some of this reflects my attempt to comprehend what is going on, but as in physics one might know the existence of a mass purely by its gravitational influence, and a force in politics too might be known by the affect it shows, even if the power itself remains hidden from public view.  Any good scientist knows what to look for, because the effects are visible even when people might wish to hide it from their perceptions.             November 30 was an interesting day, because here the goal was set would be that all markets should end the day over 4%.  Watching the markets that day both the Dow and S&P remained high all day, but the NASDAQ trailed lower and remained below 4%, even declining through the day, then in the final moments of the day it surged up so as to end above 4% just were the other two markets were.  I imagine the odds of this happening are incredible, but here is the chart.     Then the markets continued to rise until December 7th, and here is a perfect example of a market ‘not being allowed to fall’, which is from December 5th.     Then another EU deal came on December 9, and the same sort of pattern emerges, not a market that opens optimistically, but one that is being forced up through the day to assure the markets end positive.  But subsequent to this we find the markets inexplicably decline from their peak on December 7th, the S&P falling from its close at 1261 to 1205 on December 19th, a decline of about 4.5%.  So if the markets were being manipulated to keep them from falling, why would they have declined after December 7th?  Read on (you do not need to read all of this, but the first entry):   12/7 The markets were negative and heading lower, then about 10:30 they started going up…to break-even except the Dow was positive.  Then there was a natural drop to about 3:30 when it suddenly surged positive.  As soon as I recognized the manipulation I got my letter ready to send…as I saw later the Nasdaq just about positive I sent it, a minute later they were all in positive territory but the Nasdaq closed just below.   12/8 The markets were down and continued down through the day, and I saw no signs of manipulation today, in fact the reaction to the European announcement was quite anemic, the Dow ending below 12000, a fall of almost 200 points.   12/9 Came down after 11 and immediately saw the markets were up but it looked artificial again.  Perhaps they could not tolerate a negative reaction to the EU deal…then a sudden surge just before 11…But it shows what can happen when you have access to endless supplies of money…I think they are hoping that if they can just get through the end of the year without a crash that gains from the fourth quarter will cause a market rally early next year.  I think all the data being reported now is going to be revised for the worse after the holiday season ends.  They did revise down third quarter growth from 2.5 to 1.9 but by then it was ‘yesterday’s news’, and I imagine everything is being done to make things look better than they are.  My guess is that unemployment is really at 9 or 8.9 and that the 8.6 is not accurate or merely reflects holiday hiring. Notice how the Chinese market is no longer going up while the US and European markets have been absolutely ebullient.  The Japanese market has also been lackluster and is going down fast.  You can see our markets are headed to recoup all of yesterday’s losses, and the upward fight against the downward trend.  Markets fluctuate quiet a bit during the day, but we have seen very few where the market is permitted to go from positive into negative territory or stay negative through the day, everything is done to make sure the markets are up day upon day.  Today’s market looks just like the one that occurred after the last EU deal.  And was able both to predict that they would erase yesterdays losses and stave off a late day plunge by creating a surge in the final few minutes of trade.  These both came to pass.  Surprise, surprise. It is possible the Treasury halted operations yesterday but that when there was no positive response to the EU deal the president gave the order to bring the markets back up artificially.  This is the only thing that makes sense in their effort to ‘restore confidence’.  Likewise, I imagine it is also because no one else has noticed these manipulations yet.   12/15 I am increasingly concerned now that the White House is now directing the market to keep it stable, rather than driving it up.  That they are attempting to lower the market volatility, because the Fed came out and said that this volatility was bad for the economic outlook through reducing confidence.  Thus it explains why although the market has gone down but that the volatility index has been held down.  But I have noted how often the market starts the day with a boost, up at the start of the day and then proceeds from there. There is very little variety in market days, since normally you might have the market start down and finish up or start up and finish down, zig zag up and down through the day, and you could never predict where it would end up.  In the last couple months it has been quite different, and today it looked like the market was skipping over a pond, every time it hit zero it would rise up again, until all indices were in positive territory.  (Starting the day with a positive pre-market also aids the European stock market.) By the way, I think all the data coming out of the government is doctored to appear better than it is, so I think it will all be downwardly revised next year, that these employment numbers have been artificially lowered.  So I expect it is all an illusion to try to assure holiday shopping is not harmed.  It seems they have been revising up recently.  I am also aware how, unlike before, the bad news seldom causes a sell-off but mildly positive news brings in gains, again a sign of manipulation.  As well as attempts being made to reduce the severity of downturns by putting in a late-day boost to bring a 2% loss under 1% and things like this.  They don’t seem to have stopped, but my fear is that they will try to drive the volatility index down even further by staging a market upward swing.  By doing this they might also be hoping to turn the 200-day average around.  And certainly once we reach the 200 day average being the start of August it will show an upward trend.   12/16 Figured the market would be up today and it was, pushed up at the days open, and as it fell it was pushed up again.  The same pattern I see most days to force the market up.  No longer are our markets moving in step with the European markets or the Euro or anything else, just up they go for no reason.  I have seen numerous situations where rapid falls are followed by rapid rises, but no rapid rises followed by raped falls, except at the opening of the market.  The reason for this is that the artificial boost is counteracted by a sell-off.  They must see the sell off or wait for the market to be slipping to ‘break even’ before they put in more to boost it again.  This is why the market is predictable, because you can see a mind behind its motion.  Meaning it opens high and then falls, then will reverse direction and end positive for the day.  I have seen this day after day, even in the face of bad data.   12/19 What I feared is happening, that even as the markets continue to come down the Vix is being pushed power too.  Because this is the ‘fear-index’ and the Fed said that market volatility is bad for the economy I cannot help but think that the government is now attempting to bring it down, forcing it low.  Every time the pre-market data starts negative before the markets open it suddenly goes into positive territory.  As it did today, another boost at the start.  How many days in the last two and a half months have begun with a dip.  Notice how starting last week the markets have been kept flat.  I cannot help but think that what’s occurring in the indexes is just a side effect of what is being done to drive down the Vix.  I put together a chart which shows that the inverse relationship between the S&P and Vix suddenly reversed a couple weeks ago, now they are going down together!  I cannot be certain what is causing this but given things cannot help but think its another sign of manipulation…This indicates to me, along with the swiftly declining European bond yields, that American dollars are being pumped in to drive these down.   Fathom this precipitous drop in Spanish bond yields, which like the climb in the stock market occurred the week after Thanksgiving…This sort of a rapid decline is inexplicable, and arises from a high demand for Spanish debt.  One way they are getting away with this is the size of the American economy versus these and that inflationary threats are low because we are falling into recession.  Everything is being done to please investors to reduce fear, including driving down artificially the so-called ‘fear index’…What this means is that they are no longer boosting the stock market so much as driving down the volatility index.  But at some point they will probably boost the market again to drive down the volatility index even further…It also indicates that the White House is in a panic, trying everything desperate move they can do to restore calm, but it seems so obviously designed to allay fears without accomplish anything.   12/20 I was fearing a stock climb today, invented of course, but there it was.  The markets showed a moderate pre-market upswing of less than half a percent, now they are over 2% and they look fake…Why is this happening, because they have the agenda on three fronts: reduce European bond yields, reduce the ‘fear index’, and boost the American stock markets…They have to emerge into next year with the view that the crisis is over, that things have settled down, and that investment will continue.  But it appears that this ignores the looming problems that are developing, assumes that if people become bullish the problems will go away.  Now that they’ve reduced European bond yields and the Vix they believe there is nothing to stand in the way of a market rise.  So now, pour all you can into the market, and this is what is happening today. The up days are typically 2-3% while the down days are usually not more than 1%, and this has been the trend.  All down days since Thanksgiving have been greatly moderated so that by the end of the day they do not fall by much.  So we have seen a string of down days but only small, then the next day the market starts out up again…But compare our market to the European and Asian markets, ours is hardly lower than where it was before the August decline, Asian markets have been going down and continue to go down.  If we were following their lead the Dow would be down under 10,000.  If there was a crash it might have taken us down to 9,000, but here instead we are above 12,000…If you look at these market surges you would think we had had nothing but good news for the past three months, but nothing justifies these bursts upwards.  You can see them struggling to overcome either downward pressure or turn indifference into gains…So also the market moves are directed by some sort of positive headlines so as to disguise them.   Here is an example of the intent to assure that the markets do not go lower from December 16.  The market is forced up at the beginning of the day and when it drops it is held so that it goes no lower.     So here is what began on December 20th, a rise that anticipates a continuing feature of this new market, which is that intraday the markets will remain unwilling to go negative or will inevitably end they day positive and despite any negative news.  (Compare this to August and September when negative news drove the stock markets down and positive news drove the markets up.)  And that what we find are strings of positive days, markets which start with declines of 1% end positive, those that start with declines of 2% are brought back to break-even or even higher, consistently.  But one key thing to watch for is this curious intraday behavior: that once the markets have moved into positive territory they never again go negative.  While this might happen in the market it would not happen consistently if market movements remained random, and thus shows a goal in mind, because a human might care to assure markets not be allowed to fall, while the markets themselves are not so kindly as to assure such behavior.  But we also find another thing occurring in early December, the favoring of pre-market boosting over having the markets suddenly surge during the day, and a clear indication that they began to modify their methods to make them less noticeable.   Here are two suspicious charts, one showing a low start being overcome by persistent 'spiking' and the other an upward treck being 'boosted' through the day.  The important thing to remember is that since the end of November that markets have not been allowed to plunge, any losses are made up by the end of the day so negatives are held to around 0.5% and less.

Other Strangeness

Now we have followed the course of the markets from October 3rd to December 20th, but apart from these intraday moves, is there anything else which might reveal an intention behind market moves?  The next one to consider is what happened to the VIX, which is known as the ‘volatility index’, although its actual behavior is to move contrary to the markets, so that when the market goes up the VIX goes down, when the market goes down the VIX goes up.  This inverse relationship can be seen in the following chart, but look at what happens after the November 11th peak.     You can also see something interesting that occurred after this peak: the VIX begins a steady decline.  After showing a clear motion that is opposite the stock market, suddenly in late November it weakens, and then as you can see in December it falls with the market, breaking a trend that it held through the year.  Chairman Bernanki said in the Federal Reserve report that market volatility was hurting the economy, so this creates an incredible incentive in a goal-oriented market to drive down the volatility index, logical and predictable.  So in the final week of December, when hardly anyone is paying attention to the markets, the VIX suddenly plunged down from 30 to 20, where it had been prior to the market decline of early August, with no explicable reason for this, except to produce a psychological effect in investors by reducing the ‘fear index’ before year’s opening, and to attempt to drive money into the equity market.  Here is my journal entry from the 21st.   12/21 The stock market was down but the Vix was still also down and went down over 6%, although I didn’t see any manipulation until about 12:30 when two markets were pushed positive.  Again a clear sign of manipulation because markets do not care if they end positive for the day, also anther thing one should look for is that once an upward trend begins it will not give up.  Normally a market will alternate between positive and negative territory and you can never predict it day to day and hour by hour, but if someone wants it to be positive they will try to assure it stays positive. I believe the Vix is being forced down to 20 so as to create the sense that ‘fear’ is gone, but this is also I believe just the government acting.  They are getting more desperate because everything they have done is under the assumption that all they had to do was restore confidence to the markets, but this debt crisis is also masking the bigger problem of the global slowdown.  This might be one of the worst Christmas seasons in recent history and I think they are doing everything to aid it.  The President even went out ‘shopping’ today but I don’t think anyone really cares.  Obama cannot afford a stock market crash, so you can see why he’s so desperate to prevent one. BTW just prior to the market reversal today the Treasury auctioned off bonds, but it shows how once you start manipulating the market, seeing how it declined today despite the European situation, it shows that it is difficult to give up.  They might try for another big surge tomorrow to get the market to 12,500 before they go on holiday, perhaps on the back of some artificially lowered employment figures.  Just compare our markets to the other world markets and you can see the discrepancy.  Obama might be trying to put the markets right back to where they were prior to the August crash, thinking that by restoring them to this point they will then continue up from there, and that this will restore confidence; that people might forget things over the holidays and return to be ‘pleasantly surprised’ by a high market and low vix.   And likewise starting in late November into December it is simple to recognize the performance of the US markets, becoming detached from the other markets (Europe, Asia, materials, currency) and rising close to the levels had prior to the decline in early August.  And one thing that many have forgotten is that the mood and sentiment about the economy in August was that things were not so very dire, the US was experiencing a mere slow down in growth, not go into recession, or that the Fed would apply another round of ‘quantitative easing’ (QE3), but by the year’s end the news has gotten much worse.  Though this might be a subjective appraisal of the situation, China’s economy began to contract, European PMI numbers were falling, the Euro was plunging, and the US 3rd quarter at first said to be in line with the 2.5% estimated growth was later revised down to well below 2%.   And by comparison with the German market and the Euro, let alone its deviation from the direction of the Asian markets.  These US markets are behaving as though we are in the biggest bull market we’ve had in a decade.  This is an overlay of the Euro and the German Dax over the Dow.  You can see the Euro decided to tank, the Dax remained fairly flat, as have the Asian markets, while the US markets went on a giddy surge starting in December that has not let up for any reason, not even for a single day.

In With the New Year

So let us continue now into the new year, where I had already predicted two things: that they would attempt to send the markets upon a positive trend into the new year, that they would keep volatility low, and they would restore the markets back to where they had been prior to the crash in August.   What do we see in the markets but a steady move upwards and non-volatile motion that continues from the middle of December into the middle of January.  So I will continue now with more journal entries:   1/3 I have been thinking that they could hardly let the first day of the year go by without boosting the market, in an early morning surge to get the Dow back close to 12,500.  The Dow is practically where it was prior to the crash in August, just as I predicted, but look at the Chinese and Japanese markets, they have not shown such a rebound.  The market did decline through the day and only ended up a bit over a percent.   1/4 The market started out low but came up to break-even for the rest of the day.  This typically means manipulation because the mentality is once going into positive territory a mind will not allow it to slip back down.  The market itself cares nothing for its intraday movements, it can go up and down without intent.   1/5 The market repeated its movement of yesterday, assuring the markets were flat, looked like more manipulation.   1/9 Saw the market diving but again it turned up for a positive finish, and so I am still not sure that this is not more manipulation at work, since the market has just gone straight up for about a month.  It is actually beginning to have the desired impact of creating optimism, since you can see that a string of down days creates pessimism in the commentary and a string of up days makes everyone cheery.   1/10 The market was up but sagging and did through the day, I didn’t really see any signs of manipulation beyond what might have been stoking the fire before opening.  But when I saw the Treasury receiving about 100 billion from the FED and bond sales, grew concerned that they might attempt to create a 5% surge in the markets to get them moving.   1/11 The market was down but crept up through the day again.  But what they are doing now is pumping lots of money into some of the most beaten down stocks, and some they seem to have high hopes for, so there have been several stocks inexplicably going up like Alcoa, Netflix, and Bank of America, and I cannot help think that these are being inflated with government money. In August and September it was cheery on an up day downbeat on a down day, find everything right on a good day notice all the bad on a bad day, so its been a while since they’ve been negative, but I cannot possibly see cause for the market to go up further but for the push its still getting from the US Treasury.  Volume is even lower this year than last year, as if everyone is hunkering down and preparing for the worst, knowing any trigger will bring it on…You could see the November unemployment revised up from 8.6 to 8.7.  I would not be surprised to find in the end it is raised to 8.9, but they always keep the next month running lower, so they had 8.7 versus December’s 8.5.  Looks good, then next month they say its 8.4 and revise December up to 8.6 and November to 8.8, etc.  This is to alleviate the shock of recognizing that unemployment is not on a downward trend.  [They do not need to revise up if they rely upon estimations for workforce levels in their calculations.]   1/12 It looks like US government money and other money are being sunk into European bonds to assure they sell, thus bringing optimism.  That is what we are seeing, everything going well, gains like we were in a stellar bull market.  And yet another day where a down day ends up being positive, with a very smooth rise that only shows gains of a small amount each day, but added up over two weeks is significant.   1/13 Market down at first due to downgrades but came up during the day.   1/17 I was certain the market would be up in an attempt to make the downgrades irrelevant, and this is precisely what happened, although they fell off later in the day.   Notice how much was done to assure that the markets rose after the downgrading of the European nations, this sort of move is predictable, when negative news creates a positive market, it creates the impression that it is not really so negative after all.                     So the markets climbed from their low on December 19th to January 18th, the S&P rising from 1205 to 1308, a gain of about 100 points, or 8.5%.  But then after this from the 18th until the 31st the market went up to 1312, a paltry gain of just 0.3%.  So why did the market suddenly flatten out, one can never be certain, but on the 18th:   1/18 The market was up again, inexplicably again, but I am sure they are trying to drive it up to counter the bad news.  The S&P is now above 1300 again, and still no one seems to have noticed the market as anything other than normal.  In any case it just continued to go up through the day… After the markets closed I sent a note to the President and Treasury.   What was the nature of this message to the President and Treasury: in effect that if they allowed to cause the markets to go any higher I would bring this matter to the attention of the media.  There followed a brief market stabilization but as things followed:   1/23 The market was down by noon but made its way up through the day (typical pattern for this month).   1/24 Again the market had been down but came up to nearly break-even by end of day.  This is a market which will not sink, no matter how bad the news might be.  Earnings too have not been very good.   1/25 Watched the market, down but up after the Fed announcement, then began to fall then appeared to be pushed up until the end of the day.   1/26 The market opened up higher, went up higher, then suddenly fell, and it just continued to fall.  I have not seen a day like this since November, where it seems as though it is being allowed to set its own course.  In any case, it surprised me a bit after what has been going on since late November.     The markets suddenly went into a decline on the 26th, precisely I am not sure why, but it continued through the end of the month, although the losses appeared to be moderated.   1/30 Saw the market fell again but then came back up again, so I was suspicious that they might be back to manipulating the markets again.   1/31 Watched the market fall and then creep up slowly and exhibit some strange manner of behavior around the break-even points.   Consider the following day, which shows the three markets falling until late morning and then reversing direction, but it is more than merely a gain.  The NASDAQ reaches its break-even point just after 2 pm, then holds that line until close, the S&P reaches its break-even about 3 pm and then holds there, the Dow (down further that day) does not approach its break-even until just before the close.  But what are the odds of this occuring naturally, unless one merely set the master control program to 'indicies close at break-even'.            Then we enter February.   2/1 As I figured the market was up about 1% and it only fell off by the close of the day, but volume was weak.   2/2 Watched the market and again it turned from down to up, again it ended positive.    2/3 Asking myself ‘another cheery day on the market?’ before I turned on the TV, because they are producing a downward trend in the unemployment numbers, and indeed it was set to 8.3% with the markets up over 1%.  Another positive brings markets up, negatives do not bring them down.                    Now it is certainly possible that the US unemployment rate is actually the 8.3% that is given, it might be that by the calculation they use it lowers it from where it actually is (which I have seen is about 9%, precisely where it was in August), but it also seems curious to me that suddenly in the last quarter of last year that we suddenly witnessed a sort of economic turn around from where we were in the summer.  The markets remained flat throughout most of 2011, yet this did not prevent a massive 20% rise form early October through early February on hope alone, and that when we find ourselves at this point what is waiting for us but some very optimistic appraisals of the US economy and an employment report without defect: everything is up where it should be and down where it should be.  Even if you had no suspicions about the stock market being manipulated, one would imagine that hundreds of billions might have been pushed into the economy in the 4th quarter last year so as to induce a burst of economic activity.  So hiring might be real, but the coincidence of it suggests a sudden and massive intrusion by the Federal government to create a veil of optimism as we entered the new year, an optimism which is not apparently reflected by the Fed and others, who predict and are preparing for weaker economic growth and even global contraction.   And, above all else, all these moves have been predictable, hour to hour, day to day, month to month.  And inexplicably the markets have favored any scrap of positive news while they are said to “brush off” the bad.  We find the markets rose when Greece said it was close to a deal, but they did not fall when the negotiations were close to collapse.  So since October we haven’t found a varying market sentiment, but only really a clear upward trend.  And look at the reduction in volatility, how the markets do not rise too far or fall too far, but are on a slow upward trend that appears to be unstoppable.  This again is a goal, not unpredictable, and nonresponsive to the external economic situation.  But it is creating a sense of optimism in the US market, which is precisely what such moves are designed to engender.

Conclusion

Through January the intraday market charts have been fairly consistent, rather than fluctuating in an unpredictable manner, many of the days of January were characterized by what I would call a 'check-mark' chart.  That is, it exhibits this shape.          The most likely reason for this sort of shape is simple: that when humans are making decisions they have to collect information before they can make a decision.  This is unlike the market as it behaves normally.  But it is also why you can in other cases view a 'wait and see' response in how activities unfold.  You have to see what the market is doing before you decide what action to take, and thus when you see the market fall and continue to fall, you have to stop the trend and reverse it before it accelerates into a panic sell-off, so drive the market to a stable level at or above its prior day's break-even point.  As we see on February 7th.  You could bet the farm on the market staying in positive territory on a day such as this, as we watch the NASDAQ skip on top of its prior-day close (break-even point).          Amidst a crisis the stock markets are showing new highs, stocks are showing new highs, and very few are suspicious about why things are working out precisely to their wishes, like the employment report from February 3rd.  Everything looks good, but should everything look so good?  Should we get suspicious when we get everything exactly as we wanted it?  And they are inclined to see things as they appear to be, which is somewhat reflected in the overall 'market psychology' that is observed, arising from countless not so independent decisions.   And January and February have not gone up upon stellar gains and fluctuations of 2-4%, but through a nice steady climb, 'just what the doctor ordered' to reduce the volatility deemed harmful to the economy when the Fed made its statement in mid December, just when the market suddenly started to show this characteristic slow upward trend, grabbing just 0.1-0.3% a day, but accumulated over a month becomes significant.  And should we not merely question such calm and increase that is so against the prevailing mood?  Perhaps people have learned to admit that they never truly understand why the markets do what they do, and that anything we beleive they might do never seems to pan out in any case.  But here we have a market driven by consistent goals manifesting in a low-volatility rise to restore confidence.   It is either a financial bluff staged by politicians, or we are seeing the markets being used as a political war front.  But if the White House was considering the market gains since 2009 as a success and sign of economic recoverty, the August crash certainly risked stripping them of this victory, but who was to blame?  Apart from attributing it to the Japanese earthquake and other setbacks, it was characterized as arising from fear from the 'debt-ceiling debates' and the S&P downgrade of the US credit rating, both happening within a short time of each other.  Perhaps these were viewed as a concerted political plan to 'ruin the gains' made to the economy, let alone that provoked the Wall Street protests across the country.  There are a good deal of political and economic motives to keep the stock markets from crashing, especially among those who have been led to believe the common opinion that it was the stock market crash of 1929 that caused the Great Depression.   But we had a pretty lackluster market in 2011 until the crisis unfolded, once things began to get worse we not only saw a mad scramble to assure markets that things were being done to correct problems, but merely upon the news the European banks were recapitalizing we found the markets surge, when the Fed announced it would make money more cheaply available an equivalent surge in late November, and it has been 'happy days' ever since, despite the worstening economic data.  But if there is manipulation of the markets, why not just as a measure to 'buy time' for the Europeans to work out their problems and to pump hundreds of billions of dollars into the economy starting in October, as one 'must do something' in a crisis, right?  So pump up the markets, restore confidence, infuse money, raise economic figures for the 4th quarter, and perhaps even fudge the numbers a bit to create the impression of an improving situation.  Create the impression of an improving situation and you may in desparation postpone a crisis, or you might encourage people to invest and buy as though no troubles beset us.  As we have often been led to believe the problems are with Europe, and the focus has been on Europe.  This might also be part of the problem.  But perhaps they have forgotten that merely because people are fearing another 2008-style financial crisis is no reason to beleive that by reassuring the psyches of investors that one is also doing what is necessary, except for the psychological gains.  It might be argued that the economy is kept up on psychology alone, thus it would make sense to do a 'bluff', to prevent a bad situatino from worstening, a market downturn from becoming a major crash, a mild recession from becoming a depression, but there's only so far psychologicla impressions can take us.  It might just have been better to allow the markets to have fallen in October, remove the fear of a crash and then have people make their own minds up when was a good chance to get in, but this wouldn't have satisfied the political motives of those who wish to claim victory for the 'economic recovery'.       So there you have it, make up your own mind, I have.  But much of what has happened in terms of deals and headlines has largely been a game of bluff and rewards.  Give people something positive every week, or at least something to look forward to, and it prevents people from going into despair.  And this is what we might expect this week, following the ‘better than expected’ employment data out of the US, the trend will have to be confirmed by some other piece of good news.  But does this mean that the government will be unwilling to allow the markets to fall again, have things been set up so that as soon as the markets turn down they are pushed back up again?  Everything would have us believe that the market has become eternally buoyant, nothing can sink it no matter how bad it might be.  Perhaps it is justified now that a crisis warrants drastic measures, but what if it continues to be as it has been, that markets continue to be pushed up merely because it is politically favorable?  What do the markets mean if we know they're being boosted by the federal government, what shape is the economy in when we know its being pumped full of borrowed money?  We are being kept in the dark, with everything deferred into a future which to all intents and purposes must be pretty rosey, when the economy will prosper and grow so well as to furnish with a ready source of wealth to pay back all of our commitments made now.  It is actually essential, but how likely is it really?  We have supported little scientific research, we have found no technological breakthroughs, we have developed no new technologies, created no new industries, and thus what will support this economy in the future, Hope?  Yes we can go on creating businesses, but most businesses do not create wealth, they only shift it around.  We have a lot of money going into a lot of dabbling and a lot of stimulus to keep the economy buoyant for the time being, and we have a lot of optimism about the future, but perhaps they know how precarious our situation is right now, to warrant an infusion of such money into the markets to offset Great Depression II.  But if we have been burgeoning for the last decade on borrowed money, at some point our 3% growth is going to change into an even greater contraction, which is what Europe is facing right now.  You can only live on credit for so long.  But from my own view, what a waste.   I have not even covered here European bond yields, but these also have shown their own share of what might not be covert manipulation, but overt manipulation: flooding Europe with American dollars they can then use to purchase bonds from Italy, Spain, and Portugal to create the impression that there will not be a financial crisis; because since August everyone has feared a financial crisis, because that is what drove the markets down last time, or so it is said.  But it is not only financial crises that cause market crashes, so do economic contractions, bust cycles, and catastrophic events.  But one must be cautious of a government which has gotten used to the notion that they can prevent the market from crashing, because if they are doing so to avert a crisis now, there is nothing that will prevent them from wishing to create a situation, along an interventionist line of thinking, that they might use the resources of the largest economy of the world to pump money into the equity markets whenever they might flag, thus preventing a market crash from ever happening ever again.  And preventing a crash in laymen’s terms means preventing a depression, but it also means preventing the despair which arises from severe market declines, as we witnessed in August and September when the mood would go from desperate to cheery from one day to the next.  So why not assure that it is always cheery by preventing the market from going down: then people are looking for reasons to be optimistic rather than pessimistic, and isn’t this precisely what the recent market rise has accomplished?  And we must not forget at those times in August and September the ‘Wall Street protestors’ who were threatening to cause a minor uprising if something wasn’t done.  A sense of calm and stability has been restored and largely due to two things: the rising stock markets since early October and the precipitous decline in the unemployment figure.  But we might have good cause to suspect that both are merely part of a bluff game, an attempt to ‘restore confidence’, which the White House must believe was shattered by the Debt-Ceiling debates and the US credit downgrade by S&P.  The view that this ‘temporary setback’ otherwise ruined an economy on the rise is the only thing that could be used to justify such an unprecedented direct interference in equity markets, that or desperation or the Hope which has a name.