Tuesday, March 19, 2013

Red-Green head fake

As the markets [ DJI & such ] move, the higher they go the more suspect they become, as the volume drops as it should rise.   Above we see what the great numbers of stock are doing, so it loos as if we have already had one head fake in Feb, as the Red-Green line leads.

   Look at the volume, shrinking as the price goes  up, just backwards. WHY?

Typically, stock can be drawn higher futures and options taken on other exchanges to drive them  higher, more easily than could be done buying them outright on the Major Exchanges, teasing them, pushing them, leading them higher in uneconomic transactions, that have the Averages then adjust to the higher futures bids.    So in fashion of Due Diligence,  you ask Qui Bono? or
WHO PROFITS.  I cannot say without qualification but I can say, who can afford uneconomic transactions on a running basis as if they could print money to make good their losses?  Maybe they can if after you strip away all the straw men, stalking horses and intermediaries, it comes up an outfit with an alphabet for a name. Your money, your due diligence.

    Below is a chart a bit more classic in the relationship of volume to price movement which shows us one other thing, the deflation in commodities prices it tracks, is over, and at a bottom....... notice price drops AND volume drops, and the reverse holds true as well.  EVen tho LSC is soft commodities, it is directionally positively in correlation with the $CCI [ Constant Commodity Index][ the one Goldman Sachs re-jiggered the year of the great oil run][this being the Original, the one they changed is $CRB], and Copper, and Silver and the Copper Miner Etf, the Silver Miner ETF and so on.
    Now that the European Central Bank, and the New Zealand Reserve Bank think it OK to make DEPOSITORS pay for bailouts, makes you want to keep your money under the mattress and for sure think twice about LEAVING it in a BANK, other than for a transaction account where the money just visits, never stays, kinda like "Just Visiting" in the Monopoly Game Jail.

    So looking at purchasing power stablity, over time, how does holding something over than paper or bank receipts compare:  20 yrs here, $gold vs prices we pay for "stuff".

    Except for that big ramp in 2011 it looks good for 2.5 yrs, now lets drop to 20 yrs.

   So now from '93 to '09, pretty much a 12 yr picture of relative stability.
Then it ramps due to crazy considerations but  you still got your purchasing power.  It may change and when it does, those who use this route, GOLD, will change their tactics too.

   No point in wondering what we do, sign up for a free month, and see. No downside for you, unlike banks.