Monday, March 10, 2008

Imploding

The stock market is melting down, imploding. The DOW’s rise from 10,000 to 14,000 was on
the backs of homeowners diving into debt instead of true sound profits, so you would expect the DOW to crash to 10,000 at least. The DOW is so rigged that you can see on the three year chart where the Plunger Protection Team (PPT) likes to defend the index which is 14,000, 13,000 and 12,000 even. Months ago I said I will not believe they can’t prop the market up anymore, until they can’t hold 12,000 and Friday they could not. Now ask yourself this, if the PPT can’t even keep the DOW up there what chance does that give them to hold the real stock market the S&P 500?

So what does this mean, blind naked shorting? Not so fast. Battered and bullied down 2,000 points the natural market forces my do what all the kings horses and men could not, support the DOW in the short term. The DOW is only three points under 12,000, so I expect a gap up in the morning if the PPT has it’s way. Failing that there is every reason to believe a turn around at the 11,500 level will take place marking a successful test of the January lows. However if 11,500 does not hold we will go short the diamonds DIA as 10,000 is most likely next.

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