This is a gift to stock holders, at least those who can get out before it all comes down. In a genuine market there is an ebb and flow to prices throughout the day that is not present in this one. In a real market, prices hit small air pockets from time to time throughout the day. During a short squeeze that is not sponsored, there is not a steady push from the bottom up. A planned move has recognizable demand evenly distributed throughout the day and bolstered during critical time periods. The patterns are recognizable as clockwork. Odds are that organized support will be adequate to keep a rally of sorts going into year end. How and when will this change? Few investors acknowledge the wink and nod system that keeps corporate insiders, privateer firms and open market committee members all working together and in control of the market.
Still, none of this can be taken as a given. For example, if the open market committee can no longer efficiently guarantee corporations they will profit from buybacks more central banks will have to buy and hold stocks directly. The central banks have to be willing and the public must remain unaware of just how this kind of thing limits their income and destroys the overall economy. So far, the public remains docile and uninvolved. Corporations are still reporting non gap earnings, using every accounting trick known to man and violating securities laws with impunity. Do not forget that a high stock price is a pay day to a corporate insider, independent of any real profit. Buybacks are the quickest and most reliable way for insiders to pay themselves.
Why did I mention the debates? The Republican Primaries are getting more competitive. Who will be the first candidate to point out the fact that equities market are and have been rigged? This is all more than an exercise in making money for the manipulators and the donor class. This is a power struggle and an important one. Power is more desirable even than money and it is largely interchangeable. Even candidates who are in opposition to them will protect the investor class as a path of least resistance. Don’t ever think that politicians understand the financial markets. I guarantee you that they don’t. As campaigns get more intense, politicians will become more willing to make waves where they otherwise would not.