Friday, July 13, 2007


The biggest con job in financial history is presently being perpetrated on the unsuspecting investing public [aka sheep, as in being lead to slaughter]. What we saw in the stock market "indexes" yesterday was a colossal short squeeze and not the economic nirvana we were lead to believe it represented by the blathering talking heads on sheep vision TV. How any of yesterday's "news" could be construed as being economically positive and bullish for the general stock market escapes me.

Stocks Hit Records on Retail NewsAP -
Stocks surged Thursday, carrying the Dow Jones industrials into record territory as investors gleaned some positive consumer spending trends from retailers' generally sluggish June sales reports.
Alcan Finds a $38B White Knight AP
Manhattan Parking Spot For Sale. Price: $225,000
Stores Post Lackluster Sales in June AP
Trade Deficit Up Significantly AP
Market Overview: Thu 12:30 PM ET

These are the headlines from Yahoo Finance yesterday at 12:30PM. Stocks hit new highs on retail news? What news? Just in these headlines alone I see the words sluggish and lackluster used to describe June's retail sales. I see that the trade deficit rose AGAIN and significantly. A parking spot for sale for $225k? ...Inflation? Let's look inside the headlines...

NEW YORK (AP) -- Wall Street soared Thursday, propelling the Standard & Poor's 500 index and Dow Jones industrials to record highs as bright spots among generally sluggish retail sales allowed investors to toss aside concerns about the health of the economy.

But investors, heartened by signs of a happy and spending consumer, clearly decided to put some money on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, and the outlook for the coming months was difficult to ascertain, the overall reading wasn't as dour as some investors expected.

"The kind of disaster situation that everybody was preparing for doesn't seem to be playing out."

Stocks' ascent Thursday after at times indecisive trading in recent weeks could also reflect so-called short covering. Investors who sell stocks short are betting the stock will fall and in cases where the stocks rise, such investors are often forced to move in and buy stocks to limit their losses.

Oh my! Is that some truth being revealed by the media, perhaps a disclaimer for their misleading story headline? I don't need to list here now all the reasons stocks should not be going up. But I will mention one: The price of Oil. In a posting on June 3, 2007 I made the case that there is a reverse correlation between Oil prices and stock prices. I predicted that a break above $67 in Oil would push stocks down. Oil has been above $67 for a month now and stocks are at new highs?

Yes, stocks are at new highs because the Fed and Treasury have to keep stocks up no matter the cost. Foreign inflows into the stock market is the last crutch these Financial Cesar's have left to lean on. Their house of cards is about to be blown down in a financial hurricane of epic proportions. "Perception is reality." The Fed and Treasury have to convince the sheep that all is well so that they will continue to run out the door to Wal-Mart with their credit cards and buy some more gizmos and doo-dads made in China so that retail sales "look" strong. Put on a happy face people, Uncle Sam is looking after he leads you to financial ruin.

So the Fed and Treasury print up some cash and distribute it to all the "big brokers" on Wall Street with orders to buy: "We're going to run the shorts today boys. The sheep will think the stock market is going to the moon and join the party. Weeeeeee...." How sad this is...the desperation of it. If you are invested in stocks, other than resource and mining, you should be using to sell out now. A light bulb always burns brightest just before it burns out. Early corporate profit reports for the second quarter have not been encouraging. The Fed is trying to stay ahead of the ball here and give the illusion that all is well.

A lot of folks have shorted the general stock markets for many obvious reasons. It's as hard to sell the top as it is to buy the bottom. As precious Metals traders we know this all to well. It is especially difficult if the markets we're trading are being "influenced" by a cadre of Financial Cesar's attempting to stave off their destruction. The harder these fools try to stop the inevitable, the worse the inevitable will be when it comes to pass.

But hey, this is all good for Gold and Silver! Of course today's Retail Sales reports could be "supportive" of yesterday's "news". But since these numbers reflect Dollars "spent" and not volumes of goods sold, one wonders. If the price of gasoline declined last month [it did], retail sales numbers may be weaker than expected. Just as last month the high price of gasoline made the number better than expected. The Dollar is closer to the abyss today than it was yesterday, but very oversold nonetheless, and a small bear market rally could be in the offing near-term. Just a thought as Gold and Silver mover ever closer to another "breakout" attempt. It is imperative that the cartel contain the precious metals. Gold is the truthsayer...and the truth will be told.

Surprises in Gold and Silver should still remain to the upside. Any surprises to the downside should be contained between 660 and 657 for Gold, and between 12.90 and 12.75 in Silver.

Retail Sales numbers will be out in minutes...this could be interesting.

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