I'm a bear, but I must assign more than just a 'Plausible' to this scenrio due to the intervention. A failure of 928 would likely lure in quite a few shorts but COULD setup a final squeeze by Team SLP to the high-end of the box shown here. This will likely be on the back of the USD pulling back, fueling higher commodities. There is also the possibility BerTanke buys another few 'hunert billion in MBS toilet paper to try and keep the 10yr in check (ha ha), which would also fuel the market (for nonsensical reasons) and weaken the dollar. Thurgy thinks the USD will soon again reverse going higher though, just as it did at the end of last week. *Probably around EUR/USD 1.417I just wanted to point out this possibility because the market is at an inflection point. All I can do is stay neutral at the moment, but have harvested long-side profit for the most part (or protected). Either join them, fight the tape or sit on the porch. At this juncture, I'm on the porch (for the most part). as the risk/reward isn't there. 100 up, 300 down? When things turn down there will be plenty of time to get aggressive on the short side. I am holding onto the longs in CLF, PCU and UNG as my only remaining material/energy names (all are in spreads now). Utility holding is SO. I have a little short bait in the water right now, nothing major. One thing seems apparent to me...they've put more thought into this coordinated jam-job than they have an actual recovery plan. However, they are playing "Beat the Clock". Let's see how the market performs once they take off the SLP training wheels. Like I said, it is what it is, so don't mistake this for whining about manipulated markets..
If you still do not believe intervention has/is taking place in the markets then you must be one of those who sees those Green Shoots. TARP money has been put to work into equities and commodities, it's no secret. A higher stock market boosts consumer confidence, helps the pension funds, allows companies to raise capital, and in general is perceived as happy days. However, things are being propped up. It is the final gambit in the playbook to avoid the inevitable deflation that must take place before any real recovery is to be expected. In the meantime we must play by their rules and pretend those upticks is smart money coming into the market and not really GS/JPM/MS "machine gunning" every down tick with all those 5000 share lots on the SPY. How much "confidence" in the markets are we supposed to gain from all the levers being worked?
Question is, does Geithner want to oversee the SEC to catch the Madoff's, or to protect those making off?
