How This Market Has To Die
Preamble:
I have studied everything I can think of. I have phoned my contacts. I have consulted the oracle. I am stunned at the bounce we have seen. I am left with only one conclusion, a shocking one for yours truly: This is a real move and I have to jump on board.
I want to be a non-believer, but the charts are telling me a different story. This bounce has legs. In modern (post-PC) NASDAQ history I can find no two days in a row off any bottom that are as powerful as the last two. Yea, feels like blowoff and I know today's volume was lighter than yesterdays, but this train will not stop and any stations controlled by the resistance.
Collusion:
(I can not believe I am going to say this as it is so X-Files and so not me.) I am coming to think that the market is made by interests with very deep pockets. These are the same people of plunge-protection fame. They are making money at it as they do it. Think about it, how much money would it take to skew the NASDAQ? 200 billion, 400 billion?
What they do not realize IMO, is that when they skew the market, they change the psychology so that each run up is stronger than before. When they feed the bubble by controlling its descent, they sow the seeds of greed ever better; making the outsiders bolder than ever.
Corrections and crashes serve a similar function to famine and predators in the natural world. It is needed. When you ward them off the population (sample) will grow without bounds until it implodes.
The Daytrader Factor:
I think this is the largest single factor that is different today than in earlier markets. I am talking about the well funded, margin-capable, well-informed daytrader.
Q:
Now, how will a correction or crash ever catch these people so that they get hurt and/or wiped out?
There is only one sort of crash that can do that. This is how the market must die.
--Allan
(I am floating the theory, not espousing it.) |
