Something Snapped Again Behind “The Curtain” – Dave Kranzler

TND Guest Contributor:  Dave Kranzler |

While the movement in AAPL stock may have affected the first 30 minutes of trading in the NYSE, about 30 minutes ago the SPX fell of a cliff while AAPL remained largely unchanged. While financial tv clowns might attribute the sell-off to the Atlanta Fed’s Lockhart issuing a statement that September is the right time to raise rates, that was not the catalyst:

The Fed mannequins are now seen as “the boy who cried wolf.”  Only this cry has been going on for over two years now.  The market is immune to the good cop/bad cop routine.

Furthermore, you’ll note that the SPX also gapped down around 10:30 EST, again on no apparent news triggers.  This was well before Lockhart had to chance to memorize and rehearse his rate-hike comment.

Not only did stocks gap down twice today without any help lower from AAPL, but the price of oil has crashed through $50 in the last week and a half and appears to be headed to $40, if not lower.

Perhaps the recent plunge in AAPL stock is a reminder to momentum chasers that markets always have a way of moving in two directions and not just “up.”  Certainly the economic news continues to get worse and two homebuilders “missed” their highly managed revenue and income bogeys this morning.

No doubt the Fed will catch the knife again today – just like it did yesterday.  But the warning signal has been sent and there’s nothing Janet and Stanley can do about that.

Reality has funny way of hitting us in the back of the head when we least expect it.  How many of you were aware that a domestic revolt is brewing in Spain or that the Spanish financial system is one-step removed from sliding down the avalanche chute behind Greece?   If you only follow U.S. mainstream news you are unaware of a significant amount of realities hurtling toward the U.S. financial, economic and political system.

I mentioned in April based on some data from Fed – data that is well-hidden, arcane, and well-above the intellectual capacity of U.S. financial media – that a derivatives accident of some sort occurred behind “the curtain” in December.  I believe the sell-off in AAPL and the sudden waterfall sell-offs in the SPX may be just one of the ripple effects we’re seeing related to whatever occurred in December.

Of course, please ignore the collapsing price of oil…after all, that has nothing to do with economic demand – or lack thereof…Perhaps that train in that slow motion train wreck we’re observing has started to accelerate.

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About Dave Kranzler:

 I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics.  Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.

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