Final 48 Hours of 2015 – Black Swan Preview

Rick Santelli summed up the stock market action very nicely:

“I don’t know how they do it? Plunge Protection Team? Abenomics? Japanese buying futures? No matter what The Dow will not be allowed to end the year in the red…”

How they do it is a process called “Ramp and Camp“, where the US indexes are pushed higher in very low-volume trading in the Futures (and Jim Cramer explains how easy it is to fool the retail suckers here), which is the “ramp” and they the TradeBots are set on auto-pilot and do just enough to hold the indexes at the desired levels, also taking advantage of any retail interest they generate to sell to the suckers as they come in to hold the bags.  

Notice most of the volume for the day comes right at the open and then again in the selling into the close.  The most surprising thing about manipulating the markets is how cheaply it can be done!  Sppeaking of manipulated markets:  Remember 6 months ago when China halted the sale of half of stocks on the Shanghai Stock Exchange?  Major shareholders were banned from selling  $185Bn worth of stocks, which will finally hit the market on Jan 8th – I’d circle that day on your calendar!  

China is. by far, the blackest of all possible swans in 2016 – it’s a story we predicted would kill the markets this year and it’s still early innings on our China watch.  Another interesting black swan issue brought up by MarketWatch is the possibility of a Sovereign Wealth Fund cashing in it’s assets.  After all, the whole point of SWFs is to put money aside for a rainy day and how much of the $4.3Tn controlled by SWF’s is from oil countries that are weathering the worst Financial Storm in their history?

MarketWatch agrees with my note from yesterday, that one of the biggest potential black swans of 2016 could be the death of the unicorns.  Rounding out their unexpected potential catastrophes of 2016 could…

Provided courtesy of Phil’s Stock World.