Tuesday, September 1, 2015

Ponzi Empire Update August 28 -

The good news is coming in spades; the Chinese have arrested the journalist responsible for their market crash,and he is charged with all manner of mischief; 'market manipulation' and spreading general panic with fabricated lies. How lucky for the incompetent Chinese Communist Party to have a handy supply of capitalist running dogs and their 'agents provocateurs.' And in the west, the New York Fed governor has delivered joy with his cryptic statement that the long-heralded September rate hike is no longer 'compelling' and share prices have responded accordingly. Market manipulation is not a crime when engaged in by the authorities. But there is a downside to these things; the expectation means that having now been discounted by the market, official cancellation of the hike will be treated as a non- event on the day and to the surprise of all, the market will stand logic on its head and resume its downward slide. It's such an old story; buy the rumour, sell the news.

If any market bull out there was actually smart enough to have sold at the peak and has cash reserves to redeploy he would NOT throw it into the flames of high volume panic selling. But it had to come from someone somewhere with very deep pockets. A cynic would reasonably assume the US government has spent tens of billions to stem the tide and almost all the disastrous drops have now been repaired, but how much ammunition is still available? Those buys also have to be unwound at some point.

Technical analysts would have noted the 'gaps' in the pell-mell downhill sharemarket debacle which are the overnight drop by which miserable closing indices are fondly recalled relative to the even more dismal openings next morning and they nearly always herald a reversal that will 'fill' the same. And the reassurances of those in the public eye with most to lose prove wise; those brave and smug souls who held the fort have recovered most of their notional losses. And so the universe unfolds as it should in a bear market and it's called 'the ladder of hope.' That means that each upward blip is heralded as the resurgence of the bull market and there is a short term notional reward for the brave souls who kept the faith.

Then it reverses to new lows at which the same folks swear that if it ever comes back to that last high, that missed opportunity, they are going to get out, but then there is yet another reversal and the manic- depressive 'ladder of hope' continues all the way to the bottom. At which point there is
a. no money to mount a new assault on Mt. Improbable

b. no interest in doing so and the charts flatline like in the Intensive Care ward when all is lost, at which point recovery is no longer 'Mt. Improbable' but a dead cert. (one day) And then fortunes will be made by those with long memories, cash and self discipline.

This is a great opportunity to panic but that may not be obvious for some days or weeks.

Sept.10 Update:Charts


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