The real reasons stock Markets down/unstable;
1. Computer traded markets trending markets lower so greedy big bankers/INT’S can win their July contract cheap puts of general market indices, mainly S AND P at or below 1150.. Late morning/afternoon today, stocks will go up.
2. Institutional buying; computer trading systems are fed info when int’s want to buy a position and with a lack of a strong bid, will take the price to a point where a large INT wants to get shares.
I am cash in The Markets now in 2 big positions, AIS and ARIA and plan to hold these 2 at least until ARIA reaches 20 and AIS reached 7. Yes, both of these stocks are very high risk.. So why would I invest heavy now in them? Because I have been trading on and off the markets for years, and it is hard to trade daily for any decent profits but scalping for pennies.. My most success in this market, investing for my family has been to take bigger risks in cash inventory spec positions, where everyone else is gripped in fear of losing, margined in too many shares, and thinking of the short term gains/losses while I am thinking of long term returns in an all cash position. Markets go up, and Markets go down. I will double my position in ARIA if it loses half it’s pps.
These market sell offs, IN PART, are about scaring out and margining out the common street investor, who sadly uses margin to over leverage and hold too many shares in a leveraged position. In turn, big money INT cash buyers grab the shares at a discount from the “weaker hands” who are over leveraged and facing margin calls.
This time of year is historically the time the markets sell off.. every year, “they” create some sort of over blown negative news, fear, etc… This time, they want you guys to think this current sell off will be like 2008. I have news for you guys.. just prior to 2008, the SEC removed the “uptick rule”(uptick rule only allowed a short in when pps was moving up) which allowed computer trading to take the market wherever they wanted. Big money cash buyers can weather the downswings in markets they actually cause, because they are not margined in. However, they miscalculated in 2008 and allowed the market to go too low, drying up bank’s perceived liquidity from the proceeds from selling short. They took it so low, they actually chased private investors completly away (instead of creating more liquidity using YOUR MONEY),Mainly, the central banking system’s computer trading system was to blame here. (see my last blog new computer algorythms that effectively now take markets back up. This is why in 2008, you did not see the huge point “rallies”(buy to covers, int buying) you see now after huge “sell offs” (short selling, stealing your margined money)
They now have new computer algorithms in place that “safeguard” The Markets from tanking too far. In 2008 they did not have that “safeguard” built into the computer trader system.
Respectively concerning creating news, normally in Late September they spit out “positive news” to attract more buying, taking the markets usually to the high of the year by the end of the year..
Some economic points;
1. There is no new recession. We have been in this cycle now since 2002. What is mainly different now is that US GOV policies under blow hard progressive Moderate and Liberal thinking, have become more negative towards The internal American private sector. I tried to warn my show regs in 2008 not to vote for Obama, mainly because he would have a totally controlled Democrat Congress who would seek to push their Bigger Gov “Social Justic” policies on us. This in part, is drying up private sector liquidity. This causes reversing growth.
2. The EU Zone is paying for their HUGE GOV Social policies as well now.
3. The over buying of Gold is just that = OVER BUYING, creating a soon to be huge bubble burst. 95 percent of the Gold traders in The Markets DO NOT TAKE DELIVERY of The Gold. Therefore, they are buying paper promisary notes with paper promisary notes. The inventories remain the same, and the same mentality they think they are getting away from exists; Buy low, sell high.. FOR? CASH!! The whole purpose to actually own Gold is for a hard assest, to hold it in posession against failing fiat currencies, not to trade it for that same fiat currency!!
4. Growth is still positive and can remain that way if Obama and The Fed just leave things alone and if Obama realizes that he cannot just be a “Biz as usual Democrat” Spending more money we do not have to create jobs, and new taxes is not the way to go. Saving more money to create jobs IS THE WAY TO GO! Obama and Congress need to be more Biz friendly, only passing regulation where it can assure that there will no longer be outsourcing of our jobs. Such an example would be to eliminate Corporate taxes all together, in exchange for The American Corporations doing away with the outsourcing all together.( a kind of business affirmative action) This will keep their bottom line in and potentially lowering it, adding more USA decent jobs while increasing share holder PPS value in The Stock Markets.
5. Consider modifying The Bush tax cuts for those making over 5 million a year, not 250k, or even 1 million! Modification does not mean to raise taxes per say, but to close off loopholes by simplifying the tax codes. In other words, stop allowing “The Rich” to get away with manipulating their taxes = fair tax.
More stuff to come in the next few days on this as things progress.
Scott
