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Monday, July 10, 2023

Further Exposing The Hopelessly Rigged Stock Market

Welcome back from vacation. Today is basically the first normal day of trading since June 30th, so I would expect money to be put to work, and a possible rebalancing, ahead of the next earnings season. More on that in a minute.     

In Friday's update, I touched on some of the components that are being used to rig the market higher; one of which being the newly created leveraged bull ETF ($UBOT), but the AI story is only the tip of the proverbial iceberg, when it comes to the rigged tech market. 

 In fact nearly all the high flying market drivers of the NASDAQ - Namely - Tesla, Microsoft, Google, Amazon, and of course Apple, have all been duplicated, using leveraged Bull ETFs.  

$AAPD Direxion Daily AAPL Bear 1X Shares Common shares of Apple Inc. (AAPL) -100%

$AAPU Direxion Daily AAPL Bull 1.5X Shares Common shares of Apple Inc. (AAPL) 150%.

$AMZD Direxion Daily AMZN Bear 1X Shares Common shares of, Inc. (AMZN) -100%

$AMZU Direxion Daily AMZN Bull 1.5X Shares Common shares of, Inc. (AMZN) 150%

$GGLS Direxion Daily GOOGL Bear 1X Shares Class A shares of Alphabet Inc. (GOOGL) -100%

$GGLL Direxion Daily GOOGL Bull 1.5X Shares Class A shares of Alphabet Inc. (GOOGL) 150%

$MSFD Direxion Daily MSFT Bear 1X Shares Common shares of Microsoft Corporation (MSFT) -100%

$MSFU Direxion Daily MSFT Bull 1.5X Shares Common shares of Microsoft Corporation (MSFT) 150%

$TSLS Direxion Daily TSLA Bear 1X Shares Common shares of Tesla, Inc.

 TSLA -100% $TSLL Direxion Daily TSLA Bull 1.5X Shares Common shares of Tesla, Inc. (TSLA) 150% 

When were most of the above funds created? Just in time for the longest tech rally - since I don't know when - of course; right around Oct, 2022. 

There are no coincidences on Wall Street! 

I haven't taken the time to chart all of the above leveraged funds, but I plan to start with the ones with the highest market caps, since that's where the most excitement is being generated. 

The AI boom has boosted the 'Magnificent 7' stocks' combined market cap to $11 trillion - that's nearly triple Germany's GDP. businessinsider 

For example  

$GGLS - the leveraged Google bear fund continues to be hammered... 

That's just one of the ways the powers that be continue to rig the market higher, is by hammering the leveraged bear funds. 

I'm not sure if it's too late to get in on the latest pump job, but by the looks of Friday's action, this tech rally still seems to have some room to run. 

Some would say, "don't chase the herd", but that's exactly the wrong advice until you see a reversal, and we have yet to see panic selling out of tech stocks. 

There are trades to be had in the AI space, just keep in mind that this rally has already run for several months, and a correction is way overdue. 

The other rigged market - the Options market 

$VIX - the VIX used to be a good indicator of fear, and greed, but today it's used as a bear trap. Take for instance the past 2 rallies on the $VIX; First back in May, and the latest run to $VIX 17 in July. 

Best seen on the 60 min. chart view 

The $VIX was simply pumped above resistance in order to set a series of bear traps. 

Friday, the $VIX was sold at the 50 day moving average, and not even a late day reversal could lift the $VIX into the green. 

I used to look at a low $VIX as the market being complacent, but there's no fear in a rigged market.  

China, Energy, commodities, including - but not limited to - Natural Gas, and Oil.  

Did you happen to notice the massive run in energy on Friday? It was hardly even covered... Instead, the lame stream media spent most the day pointing at Janet Yellen's mysterious trip to China, and Alibaba (up 8%).   
A topic for another day. 

Yes, China was up 2%, but so were the regional banks, and Energy.  

 This game of whac-a-mole seems to be the new safety trade, rather than the rigged $VIX, and like Jim Cramer always says, "there's always a bull market somewhere" . 

$UNG - Natural Gas rallied back above the 50 day moving average, a couple weeks ago, and back-tested that support level on Friday. 

 OIL $USO - broke out ending up 2%, and oil producers were up twice that. 

COCOA - This rally has also continued since Oct.  

There's always a bull market somewhere, and especially when there's so much excess liquidity in the market.

Market bubbles aren't created in a day, and it could take several more years before this one is deflated. 

Of course the latest rush back into the sectors I just mentioned, may also be part of a rebalancing  ahead of earnings, and the second half of the trading year. 

The powers that be seem to have perfected market manipulation, and AI is sure to carry that forward. 

It's hard to even imagine the market pulling back as it has historically done, for centuries.  

Manipulation is here to stay.  

On a happier note, the climate engineers took a break from their aerial assault on Sunday, and it was refreshing to see normal clouds, on a blue sky, on a sunny day, for the second time in a week. The first time was on the 4th of July, when military pilots were apparently given the day off.   

Here's what it looked like a day earlier! 

Take Care, AA 

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