WASHINGTON, March 2, 2016 – Short column today. The Maven expected a pullback in stocks Wednesday, given that technical indicators are telling us that the current market rally is already way overbought. But after a fairly decent trip to the red zone this morning, the major averages ended up slightly positive once again.
Manufacturing numbers were allegedly positive today, but these figures are being so manipulated, at least in the government-issue verbiage that describes them, that we tend to ignore them.
We’re still expecting some red ink to begin dripping shortly. But the rally, while not firmly getting us back to bull market terra firma, gives us at least some indication that stocks won’t go down forever.
Of course, today’s plus-close, based yet again on the slightly increasing price of crude oil, could be the work of the mysterious “Plunge Protection Team” (PPT) that ETF Digest’s Dave Fry frequently cites. Nobody knows who they are, of course, but a good guess is that “they” includes a cadre of international sovereign wealth funds and government-controlled entities like the Federal reserve.
It’s clear the PPT has been active for years. Switzerland last year even came out and admitted that their central bank buys boatloads of stocks to “stabilize” (read “manipulate”) prices. It’s hard to imagine that somewhere in the bowels of Washington, the same thing isn’t being quietly effected.
Even so, it’s weird how oil has been sneaking up lately, even as stockpiles continue to accrue. Either someone knows something we don’t know and isn’t telling, or the PPT is buying up all the oil contracts they can find.
Or, perish the thought, maybe the HFTs got tired of selling and shorting oil and everything else, and are burying their shorts and going long again, just because the best way for them to profit is to always have securities moving violently up or down.
Hitting the wires this afternoon was the stunning news that Chesapeake Corp’s (symbol: CHK) controversial former CEO, Aubrey McClendon, was killed in a fiery, high-speed auto crash this morning in Oklahoma City. Doubtless the news had little influence on the market today. But still… this near legendary oil-patch swashbuckler had been indicted by DOJ yesterday for a variety of financial sins related to his manic bidding for oil and gas leases earlier in this new century.
Unprofessional though it may seem on our part, we think Aubrey did himself in rather than face the retribution team in Washington D.C. DOJ would certainly rather indict the likes of McClendon than it would deep-insider Hillary Clinton, a congenital liar who so obviously violated the nation’s security that even a street-person could successfully prosecute her. But indictments are just for other people, not Washington’s elite.
Which gets us to last night’s Super Tuesday tally. The Democrat side of the equation is only of academic interest at this point. The system there was built to anoint Hillary after Bernie The Happy Socialist gave Hill some token opposition so the Dems couldn’t claim the fix wasn’t already in.
Meanwhile, The Donald pretty much smashed up any pretense at this point that the Republicans control their own party anymore. As indeed they haven’t ever since even many die-hard conservatives finally realized their party leadership has ended up being nothing more than “Democrat Lite.”
The result is Donald Trump. Party insiders are desperately trying to figure out how to get rid of this troublesome maverick prince—who isn’t really a Republican—but who else do they have to pit against the Hillary Machine otherwise. Frankly, they can smear Trump up one side and down the other.
But it’s they, the GOP elites, who through their fecklessness, cowardice and outright lies have created this “monster.” And they deserve every bloody expletive The Donald can shower on them. Republican supporters, it seems, have finally gotten so pissed off that they’re fully prepared to blow the GOP up and start all over again rather than allow the patronizing clowns who’ve run the party for years continue to betray them.
Maybe last night’s results don’t have anything to do with stocks. But, on the other hand, maybe they have everything to do with the current rally mode. If you think about it, the very thought of a real, nasty, no-holds-barred capitalist taking a broom to this corrupt capital city is proving bracing enough that voters—and investors—are sensing we’re about to turn the page in 2016 and escape from the real monster who’s driven Washington for nearly 8 dreary years.
Yes, the thought of that could very well put pep back into the steps of the nation’s beleaguered investors.
We’ll find out in coming weeks. Meanwhile, we still await some kind of pullback in the market. We just don’t quite know when it will happen, so keep your powder dry.
And steer clear of Chesapeake (CHK).
*Cartoon by Branco. Reprinted by arrangement and with permission via LegalInsurrection.