"Skip, do you ever get tired of being right ALL of the time?"
I get this question a lot. Well, actually I don't, but I should.
The case in point here is these stock market RISES from below 111,000 on the Dow to above 11,5000, whcih have taken place in an EYEBLINK. What I have correctly told you is that such irrational rises are just as UNHEALTHY, if not more so, than the sickening drops that keep occurring. This blog specifically told you that I was SELLING into these strong rallies, as best I could, becaue the rallies just created BUBBLES. Why did I say that? It is because the econom;ic news HAS NOT CHANGED. It is bad, and getting worse. Thus, the ONLY explanatin for these "moves" up and down is that Wall Street has become a COMPUTER GAMING CASINO, hardly conne cted to the rewal world at all.
What has been happening over the last several months? Easy. And it has nothing to do with real economics, except to the extent that the day's "news' is used as a TRIGGER for the compuers to institute their programs on this high frequency trading. What has happened over the past several months is that the stock market (The Stupidest People on Earth) has been moving between the level of 1120-30 on the Standard and Poors 500 and the 1`200 level. What has been happeneing is that a piece of bad news (happening almost every day, and NOT offset by good news to justify a reveversal) will cause the COMPUTERS to drive the maret down to the 1120-30 level on the Standard and Poors 500 Index. Then the computer BUY programs will kick in, because this is a TECHICAL SUPPORT LEVEL. So people will HYPOE a SPEECH or some sort of POLITICAL ANNOUNCEMENT (lol) as a reason to buy, and the "market" will shoot right back up to 1q2000 on the S & P 500. This, of course, is absurd: worthy of The Stupidest People on Earth. And it is happening faster and faster, In really not more than TWO days, we have gone from that 1200 level on the S & P 500 to that 1120 level, and--predictably--we BOUNCED off of the 1120 level at the end of today (gonig from down 525 on the Dow to down 391). That bounce was UNHEALTHY (which no one else will tell you), because it just means that the COMPUTERS are in control. Why should any normal (I am not normal) person invest in the stock market when you KNOW it is being totally manipulated by these computer programs? Answer: If you are a normal person, you should NOTG invest in the stock market, excpet perhaps on a very long-term, MONTHLY basis that smooths out thee outrageous moves.
Could we advance right back to the 12000 level on the S & P 500, in another two days, or week? Sure. In fact, we WILL if there is any excuse for the computers to operate. HOWEVER, the moves are getting more and more irrational and violent, showing the dumbest person that this is a SICLK stock market (sick on the UPSIDE as well as on the downside). When computers are controlling these kinds of violent moves, it is obvious that the stock market is SICK, and that the people contrfoling it are both SICK and STUPID. Notice, again, that I did not say that these people are necessariy dummb in making money. But they are doing so at the risk of the WORLD, counting (economic fasicst that they are) on BAILOUTS when they get in tgrouble. I think I am with the Aermican peole generally on this one (although it has taken them awhile to catch up with me, as I was against the bailouts in 2008): HEll will freeze over before I stand for another bailout of people on Wall Street. I will engage in SIT DOWNS in Watshington. There is NO non-violent thing I will not do to STOP another bailout of a SINGELE Wall Street supported entity. There will be a REVOLT in this countgry if our poliiticians give in to their instinct to do this again. So, I repeat: Whether they know how to make money or not, in a SICKK stock market, thee are The Stupidest People on Earth.
Yes, I am saying that the big drop today was partly FICTION--computer driven, even though there was REAL BAD economic news out there. There has been rEAL BAD economic news for at least a month, and nothing but SPPECHES to offset it Ye, these wild swings are occurring without any REAL change in the situation. Computer driven, based on HYPE and manipulation. A stock market which is not SICK would not make these wild swings based on NO change in the overall situation. And what about people who BUY as the index approaches 1200, and SELL as the index approaches 1120? You can see what would havppen with RATIONAL people. But the people on Wall Street are NOT rational peoiple. With rational people, these swings would be dAMPENED. The S & P 500 MIGHT osciallate around 1150, but it would stabilize at some level--without wild swings--as people realize that the market will swing the OTHER WAY tomorrow, or a few days from now. WHO is it that SELLS when the market is already down 200 (Dow) in a single day, or BUYS when the market is already up 150 in a single day? Only The Stupidest People on Earth. And as economic risk stays HIGH, the market should GRADUALLY SINK--irrepective of political speeches or announced government "policy". Juts what ind of people BELLIEVE "policy makers" who have FAILED at every turn? All together now: The Stupidest People on Earth. Except that they don't believe it. They are just using it to HYPE both their computer moves and their self-interested BAILOUTS because they are The Stupidest People on Earth. They are setting us up for a final collapse, and at some point there will be NO bailout. Too bad that they fully intend to bring all of the rest of us down with them (because they will demand that all of the rest of us spend OUR last dollarr bailing them out to the bitter end). As I said, Hell will freeze over......Yes, Kudlow, this continues to mean YOU, and all of you people on CNBC. Jim Cramer? Definitely you. ALL of you.
Oh, did I put my money where my mouth is, as to this latest COMPUTER move to the downsied (however justified it may have been by economic news)? Yes, I did. Near the low this afternoon, I bough (realtively minor amounts) shares of CITIGROUP, WebMD, and Morgan Stanley . Let me caution you. I do NOT recommend you do the same. These are very SPECULATIVE palys, based on a BOUNCE. My overall belief is that our economy is in real trouble, and that only The Stupidest People on Earth would keep doing these computer driven, BUBBLE "bounces" in the face of this kind of risk. However, I do believe--have you been listening--that thewse ARE The Stupidest People on Earth. I am counting on it. Not, of course, with all of the money I have, but on a gambling basis. If I am not able to SELL the stocks I bought today, within a two weeks, I will be disappointed. You think that is not true "investing"? Your are ight. But think about the people who are buying and selling BY THE MINUTE, and DRIVING the market one direction or anotehr in irraitonal swings?
No proofreading or spell checking (bad eyesight).