http://www.investopedia.com/terms/p/paintingthetape.asp
Did anybody else notice the ridiculous activity into the close on Friday? The S&P 500 went up 1.6% in the last hour, including being up 0.9% from 3:50 to 3:56 (EDT).
Friday was the end of the Month. Do you think maybe the move had something to do with making May statements look better? The practice of juicing stock prices higher into month end to make statements look better used to be illegal, but nothing is illegal these days. When was somebody actually prosecuted on Wall Street lately?
I wrote the following about KBE on Thursday night –
“The market doesn’t seem capable of moving higher or lower without Financials (KBE). KBE has been sitting around for 4 days. It should move quickly very soon. KBE was at $18.10 a few minutes before the close and then ramped to close at $18.30. It is currently at $18.48 in the aftermarket. My stop buy is at $18.35. I will be really pissed if they gap it up at the open tomorrow and then sell it off hard, trapping the stop buys before taking it down. Such is the market I have to live with…”
Here is the chart of how KBE traded on Thursday and Friday. It gapped up to open at $18.70 on Friday (Red Line) and then dove to $18.15 in 3 minutes…
I was not pleased, but got bailed out as KBE bolted from $18.10 to $18.86 in the last hour of trading.
The Anatomy of a Short Squeeze
If you open up a chart book, you will see a chart pattern called a “Head & Shoulders Top”. The chart of Union Pacific (UNP) fits the definition perfectly. The short sale triggered on Thursday with a break below $45.80. UNP rallied on Thursday to get close to the breakdown point, but there were no doubt a lot of shorts in UNP when it closed on Thursday.
On Friday, UNP gapped up above $45.80 and ramped straight up all day long.
Here is the chart of how UNP traded on Thursday and Friday. See how it gapped up to open at $46.40, then sat around for a few mintues and then gapped up from $45.90 to 46.60 in one minute?
UNP and Transports are an important part of the market. If they crack then the “Green Shoots” bs is invalidated. Maybe people are acutally shipping via rail car again, or maybe the button pushers just wanted to keep the casino going just a little bit longer…
IBM was launched into the last hour of trading on Friday. It did so on massive volume. Somebody big was behind this last hour manipulation.
My concern is that prices were moved for the purpose of making May statements look better. That game is now over and we may now get hosed on Monday. The game continues to be rigged and the big guys who cheat continue to get rewarded.
Who Are the Big Guys?
Here is a chart of the 15 Biggest traders at the NYSE. Goldman is the largest.
With all of those ex-Goldman C-Level people running around the Fed and Washington, I consider Goldman to be the tactical policy execution tool for the Washington/Wall Street alliance.
Last week Goldman traded 866.2 million shares. Of those shares, 11% was traded for Goldman clients (Agency) and 87% was traded for the Goldman house trading account (Principal). In my opinion, Goldman is executing trades for the Government and is getting rich in the process.
This manipulation will work until it doesn’t anymore and then the pitchfork gang will show up and hang these SOBs – because the next crash will be the Dollar and the US Treasury Bond (Municipals too) and the pain caused by that crash will be enough to galvanize real public action.
http://www.nyse.com/pdfs/PT051809.pdf
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