Whenever Kim Kardashian wants some attention, she just tweets a picture of herself in a two-piece or arranges a fake marriage. She, as well as the rest of the Kardashian’s have mastered the art of attention-getting. I find it amazing that anyone would watch a show like this but I guess I am in the minority. But the Kardashians are harmless. No one is screwed because of them. No markets are manipulated because of them. Savers are not getting 0% because of them. The housing bubble wasn’t created because of them. But there is a new Kardashian clan out there…made up of Fed Chairman Ben Bernanke and the Bernanke-ettes…aka the rest of the Fed. (Don’t want to picture Bernanke in a two-piece!) Whenever they feel like they are out of the news…whenever they feel like the markets are not cooperating…whenever they feel like no one is watching or listening, they just start blabbing about the next time they will print money…because they know the markets stand up and pay attention. Just in the past week we had five Fedheads yapping…and they all contradicted each other. Then Mr. Bubble shows up and instead of making a move, he just teases the market again…until the next time…which is next week…when the Fed meets. We now have to sit around waiting another week for their grand decisions. They sit around a table and play Uno, paper football and X-Box 3…and then tell us more evidence needs to come in…blah blah blah…blah blah blah. Or…they will just print another trillion or two just to goose the markets.
The bottom line is that these market manipulators are killing the markets. There is already a clear lack of trust but now we have to continue to deal with people who control trillions of fake money. They know they have no impact on the economy even though they tell us their moves created 2 million jobs…hahahaha. They have done nothing more than interfere with the biggest market of them all…the bond market. And there is a simple question…how do you get the —- back into the goose because who in their right mind would buy the 10 year getting 1.6%? Oh…the Fed would. They have bought over 60% of the U.S. bond issuance in the past year.
I long for the day when the Fed makes one of these grand announcements…and the market ignores them. But a trillion or two goes a long way. I just know throughout history, the Fed has done nothing more than make mistakes, create bubbles, watch the bubbles pop and then create another bubble to fix the popping of the last bubble. The constant jawboning of more money printing is nauseating. This has become nothing more than a manipulated market hoping and praying on a daily basis that Ben K will keep a put in the market…and everything will be ok.
Unfortunately, the Fed is the most political it has ever been…and with Bernanke knowing he is out on his rear end if Obama loses, I am expecting an “all-in” Fed into November…who cares what it looks like and who cares that markets are at recent highs and the economy is not in recession. Who cares that everything they are doing could lead into some massive inflation? Who cares?
The good news is that the market refuses to pull back much…thank you Ben K. A quick glance at all the major indices show nice cup and handle patterns to break out of. A cup and handle is a bullish pattern if price moves above the high of the handle with volume. So watch these numbers: Dow 13,330…S&P 1427…NASDAQ 3100…NASDAQ 100 2803. Again, a break above these levels would be bullish. An inability to get above brings into play some negative divergences.
These negative divergences that could come back to haunt the market include:. New highs are much much less than they were the last time markets were here. This means fewer stocks are leading the way. On top of that, the Transports continue to act horrid on a relative basis. Those that believe in the Dow theory must be biting their nails. Lastly, small caps continue to lag large caps. I would rather see that the other way around.
And lastly, Gold and Silver have bottomed. Both are moving up their right sides on very heavy volume. Money printing or the promise of money printing will cause that. Keep in mind, Gold has been in a longer term bull. I am a big believer that just about all longer term bulls end in climactic action. Back in the late 70s, gold went up 4-fold in its final year and doubled in the last 4 weeks of its bull. Why would another move like this happen? Again…Ben Kardashian!
Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.