Stocks and this Blog: I Gave You a Rally; Can YOU Hold It?

See the blog article last night about how my trip to NYC and Boston almost destroyed the stock market.


What did I tell you last night? I told you I would tlry and bring you a stock market RALLY. I almost predicted I would be able to do it.


Okay. I cheated. One of the things I do is stock market investing, which is a reason I munderstand markets and our financial system much better than Rush Limbaugh. I understand that the sock market--especailly ow, more than ever--is a computer gaing CASINO, where stock market movements do not necessariy have any relatioinship to economic reality. That was how I was able to tell Rush Limbaugh, in March of 2009, that he was WRNOG when he was trying to say that Wall Street was rendering a "verdict' on President Obama with a disastrous stock market. I told Rush, in foresight, that he was pallying a dangerous game to key his criticisms of President Obama on the stock market, because--contrary to what limbaugh was saing--the stock market is not rationally related to economic reality. That meant that Limbuagh might have to eat his words as the stock market went UP as strongly as it went down. I was right, and Limbaugh worong. The stock market did go up. Limbaugh, of course, did not really eat his words, although he at times has essentially admitted he was worong about the people on Wall Street being economically smart and predictive (of the economy). Limbaugh has an ego almost equal to Obama's (or mine)--making it really unlikely that you would ever hear a "mea culpa" from him.


What do I mean that I cheated? I know how the "smart guys" on Wall Street think. The economic situation has not changed since yesterday, and I don't think the Standard and Poors 500 should EVER haev been above 1100, and certainly not above 1200. We have been in a stock market bubble, and I have told you I am a pessimest--cynical as I can be. So why did I tell you that there was a good chance I could make the stock market go UP? Easy. TECHNICAL (a selffulfilling prophecy from The Stupidest People on Earth). Based on computer prgram selling (as ALL Wall Street moves are now based on compter buying and selling, according to computer programs having nothing to do with the real economy), the stock market has been what Wall Street calls OVERSOLD. That does NOT mean that the market is too low It means that the market has gone down too far, too fast (even if the selling were economically justified). That means that we were primed for a BOUNCE.


That is what happened at the opening today. The questin, of course, is whether we can HOLD the "bounce", or whether the selling resumes. The "smart guys", remember, do not like to "catch a falling knife". That is why I give this description of the modern computer gaming casino masquerading as a rational market: "There is no top, and there is no bottom.". That means, for you leftist out there, that present day stock market trading is based almost entirely on MOMENTUM. Obviosuly, if your trades are not based on economic reality, but are based on the actions of your fellow traders trading mainly on the same momentum basis, the "value" of stocks never comes into paly. Theer is NOTHING to stop stocks from continuing to go down, just like there is NOTHING to stop stocks from continuing to go up. "Valuatioin" really has little to o do with it--often nothing to do with it. And it is FALSE to say that the stock market "predicts" economic reality a year from now (or whatever time you want to use). The stock market is based on PRESENT HYPE and MOMENTUM, They HYPE about a year from now may figure into it. The REALITY of a year forom now does not.


"But Skip, you have not told ys whether the stock market will contiue UP from here." Of course not. For that, you are on your own. I made the obvious "prediction" of a BOUNCE. It is up to you to hold it. I did buy stocks yesterday, expecting a bounce. But it is pretty much roulette to guess where the stock market is headed vover the next week or the next month.


As you should know, I am a PESSIMMIST on the U.S. economy, because I do not think our entire establishment--especially the financil establishment--has even come close to lving in the real world. But the risks out there did not stop the stock market from being almost 20% higher right before I left for NYC on July 22. Again, economic reality--except when it just can't be ignored--has little to do with short term market movements. Nor is the stock market "voting" on Obama, although the economic fascists HAVE tried to become 'partners" with the government that bailed them out. Thus, WORDS from government people are now used as part of the HYPE to move computer trading. AS IF those words have been shown to mean anything in the past.


Thus, you are now on your own. I gave you a BOUNCE. What more do you want from me?