How Long Can It Go On?

Can the illusion of prosperity with burdgeoning debt continue? Will the market continue to levitate in spite of obvious sinking structural economic shocks? The answer to us as investors lies somewhere in the Matrix. If your are trying to ascertain which pattern we are in right now in the market and how it fits which cycle theory then good luck to you. The Matrix is way more clever than you are and is making sure that its patterns are disguised. Did you enjoy last week? I bet you did. The market in a matter of five days completely takes back all of its losses for the past month. Not even one intraday pullback for the bears to cover. Trap the shorts and slaughter them like the dogs they are. Wait…I need to be careful there I have shorts. Anyway when you see that kind of action you can only marvel at just how desperate the current situation is for the ponzi. Essentially the primary dealers are carving the remaining flesh off the unwashed hedges and retail traders that have survived the slaughter up to this point. In hindsight it is fairly simple but seeing is believing. Pull the shorts in with some enticing patterns and breaks of key levels of support. Let the MSM shills play the music and oiula you have a toxic brew for the shorts created. The question at this point is have the taken out enough shorts that they have to start cranking the market down or do they continue to ramp the shorts next week until the blood is so thick that only the most masochistic will short the SnP. Only the Algos know.

I discussed with you last week that the market was on the brink of a serious collapse unless Ben called in the levers. He did…. in spades. But more interestingly did you notice how he ramped the market and simultaneously managed to keep the lid on commodity prices and PMs. THAT my friends is true power. The beatdown of commods started last week with the release of the oil reserves. That got the trade liquidation game going as they scrambled to cover margins. Just as they got the markets rolling again ….the boyz come out with the dubious report on the corn crop……once again crushing traders and killing the margins. What a slaughter for the traders that can’t handle the leverage. No problem for the big boyz. It buys the boyz some time by bringing some slight relief to food prices. My guess is they try another trick or two on food prices this summer. Can’t let the peeps bellies go empty. That’s when the trouble really gets rolling.

One more thing before you go out and celebrate our birthday. July AND August are hot months and you better not count out Europe yet. There are still some fireworks coming over there during the next few weeks. It isn’t over. Watch France.

Read more at Great Depression 2