Tuesday, May 25, 2010

Another Circus in the US Stock Market

What a spectacle every day!

It opened in deep red alright, did some DCB (dead cat bounce). Then the news hit that the derivatives regulation may be ditched (longs can thank Barney Frank). (Sooo... what's the point of "reforming", Barney?) Another miraculous recovery, except this time the algo bots were programmed to more closely simulate humans and not to shoot up 100 points on Dow in 10 minutes. They duly took time, 2 hours, to achieve yet another show of strength of the US economy. (Never mind that the stock market is NOT the economy.)

The chart is 15-minute Dow 5-day. It ended today 10 points below yesterday's low.

Europeans had better be moving their funds to the US stock market, where day in and day out and during the dead of night, Goldman, JP Morgan, Citi, algo bots of quant funds, the PPT, NY Fed, and God knows who else, work diligently to prop up the market the best they can. The ECB is yet to learn the trick.

Futures are cheerfully green: Dow +64, S&P 500 +7.80, Nasdaq 100 +13.50. (Data: Bloomberg, as of 20:30, plus or minus one minute..)


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