Most boring NFP day I've seen :(

step#1 = Print $ to give to PPT

step#2 = Buy futures to prop indexes

step#3 = Don't worry as stocks get dumped because at least indexes stay up


step#4 = Announce new "Treasury Auction" to recoup funds given to PPT

repeat
 
stocks in the index's can't diverge from the futures. THe arb players already keep them in line. (ie if fair value falls too far on the stocks arbs buy the stocks and sell the futures and vice versa).

So if you look at stocks as whole versus stocks that ARE in major indexes, you'll note that they are fairing MUCH MUCH worse.

This lends credence, since its not noname inc getting pumped, its Dow, S&P etc, meaning indexes go sideways but non-index stocks go into downtrends.

Most interestingly, if you study the price movement of stocks before and after they are added to major indexes you'll see that the 'behave' differently.
(as well as removed).
 
Quote from empee:

well, what do you use to BUY futures. US Dollars, and guess who prints those?

Doh!

Whether you run deficits, or store assets demonated in USD its same thing. (Since you can print as many USD as you need == same thing as deficit). So, in truth, yes the government could store "stock" or any other items (like cows, tho I suppose you ahve to feed them). Its effectively deficit spending.

However, as a government because so much of the tax revenue is affected by the stock market (in terms of spending & consumption and since we are supply side...) its cheaper for them to hold tons of the top 20 stocks (really, if you wanted to manipulate you only really need to be buying a handful not every stock) and prop them versus the losses due to erosion of consumer/business confidence -> less hiring -> less spending -> much less tax revenue.

If you look at the tax receipts they dwarf the average daily volume. Plus, you dont have to buy THAT much until the market players like ourselves jump in.

More importantly, the working group was supposed to prevent crashes like 1987. Anyone who knows how markets work is that for markets go lower you need everyone to panic at once thats why you get those sharp legs down in a downtrend with the big volume, its the longs capitulating (on whatever timeframe you are watching). By the government preventing the panic from getting the price to proper levels, my feeling is that ultimately it wil lead to a monster crash since over time we will get farther and farther away from sustainable value (ie the downward pressure would be great enough that even the govt couldn't prop). This is an unlikely scenario so I think its more likely that people eventually figure out that stock market is scam and it loses its ability to control to masses (ie regardless of what happens ppl become apathetic towards it, because it will keep telling people that eveything is wonderful yet ppl can see they arent). At that point, it will probably return to what it should have been.

And, as a trader you shoudl knwo that p/e whatever doesn't matter. Other than the short side, EVERYONE in the market has a vested interest in it going higher.. so its not about being a 'open market' its about a casino and the belief that 'everyone' can win. AND when was the last time that happened? NEVER. (Plus, what if the P/E returned to its low of say 6 (dia i think) and stayed there for 10 years. does that mean 6 p/e is "fair" now? or is it 25?)

Of course, then we have the ET crowd that mock anyone who has a brain or is at least thinking..
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while you are doing all that thinking you should know that every share of stock can be traced to an owner. why hasnt some smart young reporter traced some stocks to the government vault and exposed the ppt for the world to see?
i agree that there is a vested interest in the market going up but that is not the same as the government buying stocks to prop up the market as you suggest.
 
Quote from vhehn:

while you are doing all that thinking you should know that every share of stock can be traced to an owner. why hasnt some smart young reporter traced some stocks to the government vault and exposed the ppt for the world to see?
i agree that there is a vested interest in the market going up but that is not the same as the government buying stocks to prop up the market as you suggest.
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And who is to say that the major I-banks arent a major part of the process. After all, remember the closed door meetings in Sept-Oct 1998 regarding LTCM.

Now, more than ever, strong buying or selling at key technical levels can reverse the markets for extended periods of time. The amount of leverage in the markets can sustain a prolonged move in whichever direction is necessary to alleviate, in this case, the selling pressure.

Seriously, if you've been trading, at a minimum, 8-10 years you have seen everything. Pre-emptive rate cuts, Federal Reserve member "jawboning", etc, etc.

Senor Zen
 
Do you think the government would even care if it lost money????

Just like the day that oil hit all time highs just happened to be the vote on ANWR? Dumb luck!

Just like there has not been one single code orange terror alert since Bush was re-elected. Very interesting!

And don't even get me going on about aliens.
 
Quote from yenzen:

Seriously, if you've been trading, at a minimum, 8-10 years you have seen everything. Pre-emptive rate cuts, Federal Reserve member "jawboning", etc, etc.

Senor Zen
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Wow, 8-10 years eh?
ALL the way back to 1995 . . .

:eek:
 
Here is a thought, you people ask where is the gov keeping all the securites they buy to prop the market? They don't they just create the squeeze and sell into strength back to shorts. I never believed in the ppt until april 4 of 2000 when we had that day where the nas was down over 12% intraday and came back to close only down 2% for the day. You have not lived until you have traded a day like this and watch your account go -25k and end up closing 12k in the green.
 
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