Saturday 23rd February 2008 9:12 p.m.
Did you ever believe in free markets? Well, take a look at this chart from Dan Norcini on Jim Sinclair's evergreen website - the performance of the S&P500 mini futures yesterday (Friday). Dan labels this as the plain and obvious work of the PPT, the Plunge Protection Team. Then just imagine how much money anybody 'in the know' could have made during this spike up and how much money any free market short seller would have lost to them! If this is true, then the US markets are a complete and utter farce, because this comes on top of all the naked short selling ('counterfeit shares') in other market areas such as small cap technology and mining companies and all of the ridiculous 'AAA' credit ratings of debt that has turned out to be utter junk in the mortgage arena. The US markets equal a bottomless pit of depravity into which your money can disappear! It also seems to be a command economy, not a free market. In that scenario, assets can never be properly valued in the marketplace and the market will be dangerous at all times, even if you are an ace at valuing companies by reading company reports.
Jim Sinclair's remarks about the "trade everything all the time" mentality being a losing bet are also prescient in this case. As an outsider, you can never know when trading by the insiders, the commanders of the economy, is going to happen and as such, you can get caught out very badly and lose all your money in an instant in this unfree market. He would say that it is better to stock with the major market trend, because the commanders of the command economy usually cannot defeat the major market trends, only slow them down and smooth them out on a day-to-day basis.
So, not so bad if you were 'long' the S&P500 on Friday - but despite all this it's still been in a downtrend lately.