Saturday, November 1, 2014

Parabolic Central Bank-Driven Two-Week Stock Market Rally

The power of the central bankers is astounding. The central bankers control the markets. The twelve-day rally is a phenomenal parabolic move higher that began with Fed’s Bullard comments that more QE is on the way. Fed's Rosengren and other dovish members chime in pumping the stock market promising to run the printing presses non-stop. The BOJ continues to goose the markets daily by printing yen which sends the dollar/yen currency pair higher and Japanese and US stocks higher. The PBOC injects billions in liquidity into their troubled banking and economic system adding a further boost. The BOE promises more easy money. The ECB is backed into a corner and plans to weaken the euro to create more upside in equities.

But no, that is not enough by central bank standards. The Japanese government pension fund announces plans to boost purchases of both domestic and foreign stocks on Friday morning (Thursday evening US time). This immediately boosts the NIKK about +2%. But no, the greedy central banks want to make themselves, politicians, the elite class, the wealthy 1% and politicians even more wealthy (since they own stocks) and the BOJ (Bank of Japan) obliges by announcing another stimulus package. It is obscene. The NIKK catapults +5% higher in Friday trading and S&P futures launch higher up +25 in the overnight session. Dow futures are up +200 in overnight trading into Friday morning. Banzai! The double-whammy out of Japan creates an orgy of stock buying.

But no, like the Pink Floyd song that channels Oliver Twist says, "Please, sir, may I have 'more'? And the wealthy, now overtaken with greed, will receive even more either next week when the ECB meets or in the weeks ahead when ECB President Draghi will announce more stimulus. To H*ll with the middle class and poor. As Queen Marie Antoinette is credited for saying in response to the peasants starving, "Let them eat cake."

In about two weeks time, the SPX (S&P 500) moves from 1820 to 2018, a huge 200 handle turnaround, nearly +11%. The power of the central bankers is impressive although perverted and obscene; so filthy and hard-core that even Caligula would blush. Free markets died in late 2008 and early 2009 when the Fed destroyed capitalism by bailing out banks and other companies such as AIG and GM as well as launching quantitative easing.

The Dow moves from 15860 to 17396, 1536 points, nearly +10%, over the last few days. The COMPQ (Nasdaq) is up from 4123 to 4642, a ridiculous 519 points, nearly +13%! The RUT (Russell 2000 Small Caps) moves up from 1040 to 1174, 134 points, +13%! Major indexes simply do not move over +10% in a matter of days unless goosed by the central bankers. If you do not understand this you are not paying attention. The Fed and other central bankers provide the go signal for bullish traders to rape the upside in markets. The central bankers hold the victim, the middle class and poor, to the ground, while the wealthy perform the heinous act all the while professing that they are helping and doing no wrong. The separation of the classes into rich and poor will create social unrest around the world for the months and years ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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