Zeev's Turnips Patch-No Politics (ZEEV)

[market_watcher]

the market behavior that we're seeing is consistent with believing that there is such a put: buy an sufficiently broad basket of crap at any price, because there's a floor there.

There is a 'floor'. It's the estimates of future earnings for these companies. I've said before that mutual funds' advertising has sucked in so much 'stupid money' that historical valuations are less relevant. MF managers handling OPM are a much more potent force for market moves than the Fed ever could be. Yeah, there's the 'lender of last resort' reality to deal with but someone was trying to attribute a 5 minute uptick at EOD Friday to the Fed.

when you should see intervention (to stem a selloff that could cascade) and where to look (intc and other stocks that get jammed by buying that appear intent not on buying for a good price, but buying to raise the price). that's predictive enought for me.

OK, but we're in an uptrend, so cascade selloffs are going to be hard to come by in this environment and, as ajtj likes to point out, cascade selloffs don't normally occur at this point in a bear market, being much more likely at the start of a bear than at the mid or end point. Buying to raise the price could just as easily be done by a firm trying to distribute shares by triggering program buying by other firms.

The preponderance of the evidence still seems against this theory in all but the most extreme cases. Exhibit A is the fact that the markets have been going down for 3 years. Now, if someone wants to say that the PPT is an actual 'plunge' protection team, i.e. if the market threatens to go down 10% in a day without their intervention, they step in, OK. It's the application of the theory to small price moves and timeframes that's not very credible.