This is a copy of a post I did for www.stocktock.com.
IMO this is a really tough point in the market right now. You have the bears all (rightfully) screaming how bad things are and then you have GS throwing out upgrades like candy. Is this the end of 2 of 1 of P3 and we have a 3 of 1 in our sights? Is this 1 or 3 of C of P2 up? What is an investor to do? Really tough point right here. One thing for sure, nut cuttin time is upon us and we’ll know for sure pretty soon which count is right. A higher high places the P3 top callers on hold a little while longer and keeps us on the parabolic train of love.
Update: NASDAQ hit a new high. SPX stopped withing 2 points. Dow came within 60 points. This may have some screaming double top.
A simple glance at the weekly indicators combined with the P/E multiples of the SPX (and the plethora of other financial and economic issues) and you get that dizzy feeling like you are standing on a girder about 1,000 feet up with no safety rope or net. All it will take is one stiff wind and you are toast.
So Shanky, what’s the problem? Why can’t you figure out which way we should go? Well, GS and the Fed and the Treasury and our government are the problem. You see the reflation trade has been blowing smoke up this economy’s butt for over a year now and has created nothing but optimism of a V shaped recovery. This is what you firmly believe if you are a CNBS disciple, yet that is not reality IMO. The TARP funds have been nothing but a prop for the still IMO insolvent banks. The TARP funds were a waste of good money being thrown down the rabbit hole of economic fantasy.
Why bother to reflate the bubble that got you all of the problems in the first place? So the insolvent banks can put on a pump and dump and take all your money so they can survive. Who gives a shit about you or your future, you little worm undisciplined ignorant investor? The banks are the big boys and they need to survive. You dear investor are an expendable asset in this shell game.
IMO America has been taken to the bank by first Paulson and his fear mongering and second Bernanke, Timmay and the administration. Here is the deal and Karl Denninger at The Market Ticker loves to harp on this. The banks made the bad loans and are not having to pay the price – YOU ARE. You can’t have it both ways. You can’t take from the poor and give to the rich and make it work. You see the consumer is 70% of GDP and without the consumer having jobs, credit, savings and some sort of manageable debt ratio, it all fails. You see, they sucked us all in (well most of us) to the cheap credit must own a home inflated bullshit rape of American wealth. Did they give a shit about you or me. Hell no! This is where fractional reserve lending comes in.
In Ron Paul’s absolutely must read End The Fed you get to know the history of the Fed, fractional reserve lending and how and why we got where we are today. You see those greedy mofo’s wanted it all. They wanted to die with the most toys and win the game. Problem is the game is still going. They screwed the game for everyone and now YOUR government is basically siding with the banksters and saving their collective asses and leaving us out to dry.
This is bullshit and leads us back to why P3 will happen and any other count is a bunch of crap. To learn what I think is the truth please visit Zero Hedge as it is IMO the best resource on the web for the truth about manipulated markets and the shenanigans they are playing with your welfare. The pump and dump is nearing an end. P/E multiples are exponentially high. Insider sells are at a 95 to 5 ratio. 40% of mortgages are underwater, CRE will crash, unemployment will continue to grow and is not being factually reported, the consumer is dead, blah, blah, blah and CNBS will lead you to believe the Haynes bottom is in and a V shaped recovery is all but guaranteed. WAKE UP SHEEPLE! You dear reader/investor have to make a choice here and soon. Do you feel lucky? Will the manipulators carry out the scam of 1,000 years and continue the HFT front running and market prop to even further unsustainable heights or does it turn here? Is this P3 or P2? We’ll know in a week or so which count is right.
Sorry I can’t answer the question for you, but I have done really well siding with the manipulators. I still believe we are in P2 and have one more leg up to C. Maybe the mutual funds have enough in them to get one more good QE statement out of the market. Maybe there are a few more upgrades left or GS will create a new “super buy” recommendation to garner a little more room for further upgrades. Maybe Ben will trump the dollar down to complete its wave count one last time. I have wanted a 1050 to 1121 top in early October, so I will stick to the call. BUT I will also be playing it as the market top is in. I am not playing this or any speculated run up. I am short in SDS at this time and looking to add to shorts. I do have a plan and stops in place if the trade should go bad, but I will not chase this move any higher at this time.