From OptionInvestor.com last night. An Excerpt:
>>Is this going to
cause a further dip? Odds are good but after today I
would not bet on it. Deep pockets bought the open this
morning to hold up the markets. Not to buy stock at
bargain prices but to hold up the market. Think about it.
If you were going to buy billions of dollars in stock
today and the market was showing a triple digit drop
before the open, possibly a -200 day or more, then why
would you buy immediately at the open at -25? Would you
not rather wait for an hour or so to get a better price?
Wouldn't you be afraid that the negativity at the open
could cause that drop AFTER you spent those billions
and put you in a significant loss before the day was
over? Any reasonable trader with far less money at stake
would have waited for the drop to slow before buying the
dip. This smacks of market manipulation by somebody.
Somebody with very deep pockets. The conspiracy theorists,
including me, were speculating that the Fed could be
propping up the markets to keep the recovery hopes alive.
Another possibility is Japan. With the Nikkei tanking
-5% overnight from multiyear highs on fears about a weak
U.S. recovery then what better way to spend some of those
billions in dollars they have been hoarding than to buy
the U.S. market. They have been spending billions each
week trying to control the currency rates and boosting
our markets would certainly help their markets.
Another possibility was mutual fund related. Funds have
been beaten so badly for the last two years that they are
scared. They are riding a huge rally wave that could have
been about to crumble. Investors had poured in more than
$4.3 billion into funds each of the last two weeks and
funds had a vested interest in keeping the markets up.
A sharp correction could stem the flow of money and
blunt investor sentiment for a couple more months. The
only question is did the funds have enough money to
orchestrate the massive buying and head off the opening
crash? If so which one? Was it a team effort and if so
then how did they coordinate it? Far too many questions
and no answers.
The real question is what about tomorrow? What a tossup!
We have yet to see how the Asian markets are going to
respond to tonight's earnings. Futures have stabilized
at about 1021 for the time being and while negative they
have at least quit falling. Traders are confused. Each
time the markets reached resistance today the retail
buyers disappeared. The buy programs provided the reversal
momentum but nobody jumped on the train at the highs.
Shorts were never forced to cover because resistance
levels were never broken. If Asia shakes off the earnings
from MSFT and others and their oversold conditions from
Thursday then we may have a chance. If the deep pockets
from this morning are still around at the open on Friday
then they might be able to build on any Asian gains. If
the reverse happens and Asia tanks again then it may take
more than deep pockets to slow us down at Friday's open.<<<
Exactly why Japan could not be allowed to close down 150 points.
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