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Saturday, June 26, 2010

Re: Market Manipulation

I tend not to believe in manipulation until I see it, because if it could be proven that the free market was no longer free, but being manipulated; no long term investor, in their right mind would continue to invest in it, but I've been seeing some things in the charts, and from the media over the past few years, some of which can't otherwise be explained away, nor should they be ignored.
1. The $VIX selling off methodically & un-naturally - from the Christmas Holiday of 08 through May of 09; during a time when the market would have normally been covering it's back - buying put protection. We also saw the $SPX rally over the same period, on low volume, and with no normal standard Fibonacci retracement, while CNBC pundits' continue to argue - all day long - that 10% corrections are all that are required in a "Bull Market", while 10% is merely a pullback.

2. I witnessed the China Chart $CZH paint all zeros over-night, and then reverse course (short term bullish); this was just before china released it's latest manufacturing numbers, soon after Hillary Clinton and Tim Geithner were seen visiting China. This was the same day Jim Cramer - of Mad Money fame - pumped Exxon Mobil, and China. Telling his fans that a "soft landing" in China was a buy, although up to this point he had recommend holding any china stocks - other than BIDU.

3. The financials ($DJUSFN), the $SPX chart tends to hold up better than the $INDU, and tech ($DJUSTC) (when normally tech leads the market). I've also seen CNBC repeatedly tell their audience, that traders "watch the $SPX, not the $INDU".

4. We also recently witnessed the media's poor attempt at damage control when the market finally did reverse course - on the day of the so called "flash crash". Markets have crashed throughout history, yet they want us to believe than some sort of technical glitch, or electronic markets is to blame for this latest downturn, while there is no evidence to support such a claim.

It's a well known fact that NBC is owed by GE, who is part of the current administrations economic dream team, so much of the above can easily be explained by a carefully coordinated conspiracy, perpetrated against the American people, by the corporate/government/media complex, in order to keep the public hopes up. They know as well as I, that recovery isn't possible unless public sentiment turns positive, and if capitalism fails, they all lose their jobs, including the politicians. When people get hungry; there will be social unrest, and governments will fall, as we see this already happening in Greece. These are the green shoots I believe we need to pay attention to. I don't hope for a terrible outcome, but I also know that markets will correct, and that manipulation can do nothing to prevent it. Risk will be priced in, and with over $100 Trillion in outstanding U.S. liabilities, we are a bankrupt nation.

Granted: Most of the above may also be explained by herd mentality, but there are other things which can't.

Case in point: The REIT: Annal Capital Management (NLY): I have the chart posted on on my blog, and in my public charts. Yesterday I saw the predicted "island reversal" with my own eyes, but when I loaded it into my ticker I was surprised to see NLY up. I checked the chart again a few minutes later, and the candle had clearly gapped-down - below the island formation - and was slowly rising. I was busy charting Friday morning, so I figured there must be some simple explanation, and didn't think much more about it, but when I looked at the chart later that evening; the candle I had seen earlier in the morning, is now grouped together with the others at the top, just as the zeros painting on the china chart, and gaps down on the $VIX, are no where to be found.

Today: Yahoo charts show the NLY gap down on Friday, but yahoo ticker shows the stock ended up at the end of the day, as well as after hours. yahoo "profile" information: Index Membership: N/A

Here's the screen shot:

And here's the screenshot from my public charts (daily candles) Index NYSE:
NLY - Daily Candlesticks: "


If I'm missing something here; please respond here, or contract me though my public charts link.

I'll cover next weeks game plan, in a separate post, so check back later this weekend, or before Monday's open.

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