July 13th Bellwether Update: Swimming in Sand

by John Galt
July 13, 2016 05:15 ET

DOW10Khitbytrucktiresjgfla

Wooo, it’s time to party again!!! Break out the Dow 10K hats, brush them off, put a piece of white tape over them and write Dow 20K on there because that’s where we are heading.

Or not.

Being the contrarian that I am, I look for patterns which remind me of historical events or eras where the markets and human behavior attempt to replicate past events so as to create something new, or larger. However, since this is the first time in world history that central banks, including the Federal Reserve although they deny it, have purchased equities in world stock markets. And despite all of that effort the only beneficiaries are those insiders who know which stocks will be purchased, when, and how long the banksters intend to hold them.

Thus when one looks at my two bellwethers, it makes everyone wonder how the hell the individual stocks are not breaking out to all time highs.

Apple, Inc. for example has a guaranteed floor somewhere around $80 per share (for now) with the Swiss National Bank buying and holding shares of the company. Yet the stock just now broke above the 50 day moving average (DMA) and did so on pathetic volume with no real technical momentum supporting a further move above the 200 DMA. That is not to say it will not break higher but with this kind of guaranteed support, it should be at all time highs considering the breadth of ownership.

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Not a good look at all.

Then yesterday based on no real news that the world wasn’t coming to an end, it was decided to try to force the broader markets higher by rescuing the financial stocks. Despite thousands of announced layoffs, synthetically engineered accounting earnings, and a guarantee to know every move the Fed will make because they are the largest shareholder next to JPM on the Fed board, Goldman Sachs is still floundering also:

071216_GS_9MOjgfla

The question for GS and the major financials becomes not if but when the Fed will announce open purchases of preferred stock issues from the banksters to guarantee liquidity and a flow of funds allegedly to Main Street because after all, bank failures can not occur under the Obama regime nor can another crisis until he’s about to or actually leaves office. After the next seven days of earnings news and the start of the Republican Convention the news should shift back to Europe’s banking crisis which will actually provide the big clues for the August adventures in investing and if this rally has any sustainability at all.

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