by John Galt
April 4, 2012 23:00 ET
The United States Equity Markets declined today.
Now that Mr. Obvious has spoken…
Gang, I’ll be the first to admit that technical analysis of THESE markets is an insane, stupid, waste of time. When the Federal Reserve is buying, logic, fundamentals, and technical analysis goes out the window. With that being established, Mr. Bernanke said the following in the FOMC minutes released this week:
Now that the fun and games are over with, let’s address some reality.
Many of the Bubblevision talking heads are trying to assign “years” or “periods” to the recent market action. Now that the Fed has spoken, I can say with Peyote free certainty that this era best identifies with the current trading period:
(click on the thumbnails to enlarge)
IF, and this is huge IF, with the massive political and central banksterism intervention underway, this chart plays out, we rally three times more then crater over the summer as Obamism gets destroyed by the U.S. Supreme Court and war engulfs the Middle East (in my opinion). This sets the markets up for a nice pre-election rally the collapse but why did I choose 2007 over the years the populist media selected?
In 2007, the Federal Reserve engaged in one of their ultimate blunders decided not to add massive liquidity into the system until a rumor of one of the two “founder” banks were having liquidity problems. Based on the following chart this is my profitable guess from that era:
Rumors to this day allege that someone inside the Federal Reserve tipped off Goldman Sachs that they were going to lower the discount rate but to this very day, the Bubblevision experts and others deny that this could ever happen. Yet short interest in the stock known as “GS” was wiped out that day then re-validated in 2008 as it crashed far below the $100 price level. Somehow, myterioiusly according to the ignorant, the markets and GS were saved.
Here we are again at another pivot point. GS is at resistance. BAC, pumped up far beyond a value buy. The Bubbleidiots are re-promoting Dow 15,000 and more. Yet nobody, I repeat, nobody, considered an “expert” on the three Bubblevision financial propaganda networks wish to acknowledge that this market is running on vaporhope.
The truth is that by June of this year the markets will find a LTCM “just like 1998” or an “Indymac” just like 2008. It will correct. The Fed will go nuts. And hyperinflation will return as the threat de jour.
Enjoy the show and profit accordingly as this will turn out to be the final stages of the great secular bear market of 2001 which should terminate in 2013-2014, providing the ultimate inflationary bull market (or other term) of all time.