| <img class=”alignleft size-full wp-image-3846″ src=”https://quillian.net/blog/wp-content/uploads/2016/12/00-4.jpg” alt=”” width=”1249″ height=”864″ />Before the mob gooses the stock market, they always feign weakness, draw in short sellers, then load up on bullish derivatives. The measure I use as an indicator is an index of total ETF volume divided by total Russell 3000 volume which is an ETF-free index. For those unfamiliar with the stock market, we are talking about exchange traded funds. These are not the only derivatives the mob uses but it is an easy indicator to follow. Despite the complexity of the trading algorithms, the actual strategy is always simple.
Get free money from the Federal Reserve, manipulate short sellers into covering and buy enough actual shares to push up the price of the derivatives they trade. Loses on stocks are not a problem because derivatives profits more than offset that, always . Most importantly, anytime this indicator spikes, everything legal and illegal is going to be done to elevate the overall market. Assurance to corporations with stock buyback programs is signaled by the Fed that they have their backs. Success for the mob is not guaranteed but the number of times this has not worked perfectly can be counted with just a few fingers. The investing public including professionals is extremely naive but they are slowly starting to smarten up. When this stops working, the market will crash like nothing you have ever seen but it is a bad bet that it will on any one occasion. Stock owners will regret having ever heard of the stock market. I have basically been in cash since early 2013. |
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