Replies to post #506 on S&P short term cycle swings

[SyndicateTwo]

It's that serious of a problem. Remember how when Obama first took office and everytime he opened his mouth the market tanked? He was constantly asked about what he thought of the market's fall and what he was going to do about it and he said he didn't follow the market, nor should anyone else. It will do what it does.

Then, someone got to him and educated him on the ramifications and he quickly changed his tune.

Yes, it sounds conspiratorial and yes, it seems like an attempt to excuse the rally away from anything other than it just going up.

But markets don't just go straight up like this. They stairstep and there is a level of fear out there to not be left out. As I always say, people are more afraid of missing rallies than losing money. However, the best technicians are at a loss because no TA works these days, It just defies all logic. When you then look at what the Fed has done and is doing, it starts to make sense. Then guys like my friend in the 'biz', Greg, who actually works at one of the big firms in NY comes and tells me that they hear from the Street level that there is a ton of this going on. That is, money being diverted into the market to stabalize it.

Now, we're stabalized. However, the continuation seems to be more manipulative than anything. And I don't mean in a bad way. Just that there seems to be a concerted effort to try and 'keep it going' to raise the levels of the averages.

Now the DOW said today they are changing out GM and AIG for CSCO and Travelers Insurance. Those should help the DOW gain because CSCO could easily run up 20% in the next year. However, it won't help the DOW go back to where it was like a move of GM from $1 to $10 would do.

[goofyfoot]

IMHO, I've come to believe that some of the TARP/TALF money is being used by banks as investment capital, with, I'm guessing here, some level of collusion between them, to drive stock prices up through coordinated buying. No one will investigate this because everyone is winning right now.

I see being in the market as being on the right side of the trade, right now. Last Wednesday, everyone freaked because there appeared to be a reversal to the downside, but that was just a head fake, maybe just to keep things looking honest.

Many people swore off the stock market in February and definitely in the first week of March. These are people that will probably take a long time to become reacquainted with market trends. Since things have been going up for almost three months since then, some of those people might be changing their minds and cautiously buying back in (finally).

The trouble is, as I see it, in three months, the market has roared back up to a level that usually takes several years to reach. Of course, on March 9th, everything was priced for Armageddon, so maybe this is partially a technical bounce. But, so much almost "free" money from the government is out there, and probably not even a third of it has been invested, at this point.

If these banks play it a little smarter this time, given all the PhDs on their staffs, they might actually get out near the top, with some profit. Something good to show their shareholders, maybe? Then, again, that'll make the markets go back down.

Then what?