Thursday Fakery - Rupert's Pet Hilsenrath Saves His Portfolio

That $5Bn Rupert Murdoch Spent for the Wall Street Journal is really paying off!  

It's a significant portion of Uncle Rupert's $12.5Bn personal fortune but, like all the Billionaires who control everything you watch and read and listen to (while cutting your children's school budgets so they can't think for themselves) - it allows them to manipulate the markets and thus, their personal fortunes when the need arises.  

In Murdoch's case, he has built up Jon Hilsenrath's reputation as "The Fed Whisperer," arguably making him the most powerful economic journalist on the planet as Hilsenrath supposedly has an inside track to whatever the Fed is doing.  Forget the fact that Hilsenrath is wrong all the time - it's the reputation that counts and yesterday he used it masterfully to turn around the global markets (which Mr. Murdoch is heavily invested in) with a well-timed article ahead of Asia's open that sent the Futures soaring back to yesterday's phony highs - it was really a thing of beauty, in an evil, manipulative sort of way.  

Of course, at PSW, I teach our Members that we don't really care IF the market is manipulated, as long as we can understand HOW it is manipulated and take advantage of it.  In yesterday's morning post, for example, I mentioned that we went long on the Russell Futures in Tuesday's Live Trading Webinar at 1,140 and yesterday the Russell (/TF) topped out at 1,150, which was up $1,000 per contract and there we flipped short for the ride back to 1,130, which was up $2,000 per contract and now we're happy to short it again, though it's S&P 2,000 that has caught our eye this morning.

When you are playing the Futures, the key is to not lose a lot when you're wrong and we teach our Members to do this by picking entries that have strong back-stops - failure points that give them a good indication to get out of a trade before it goes too far the wrong way.  S&P 2,000 is, obviously, a huge line to cross and that means it's not likely we get burned by a sudden move over (or under) the line - so it makes a great entry for our shorts, with a tight stop if we're over.  

As you can see from Dave Fry's SPY chart, we had a big move up in the morning as 2,000 held (200 on SPY) but then it broke and gave us a great short entry in our Live Member Chat Room, which I called at 10:12, saying:

By the way – all those long lines make great shorting lines on the Futures:  17,000, 2,000, 4,350 and 1,150.  

We had called a long at 9:46 but only got small gains and flipped short as soon as our lines began to fail (as we expected they would, but why not make money both ways?).  Today we'll be using the same lines to confirm the move - up or down.   Today's move is all about stimulus, or rumors of stimulus, after getting all sorts of TERRIBLE economic news, including the Fed's Beige Book, which you can see my summary of at Twitter.  

As I noted early this morning (also on Twitter), it wasn't just Hilsenrath that rescued the markets last night.  After he got the ball rolling, the Chinese Government pledged to put $23Bn into broadband infrastructure (great for our CHL longs) and the "official" Chinese papers cranked up the rumors of even more stimulus at the upcoming 5-year "Plenary Session," which will run from Oct 26th through about Nov 10th, in which China will decide exactly HOW they are going to manipulate the markets for the next 5 years.  

Of course, the Top 1% is in no mood to take chances so more topspin was added at Europe's open as poor Ewald Nowotny, the ECB Governor who said QE was the wrong policy just 3 weeks ago, was forced to make a fool of himself and call for more easing - essentially flipping his bearish "vote" and creating a huge win for the FREE MONEY crowd.  

That got the EU markets off to a huge 1.5% move into lunch (coming off China's nice move, which came off the move in the US futures which came off the comments of just one journalist who, in reality, hasn't got a friggin' clue what the Fed is going to do).  This is despite TONS of bad economic news that the Corporate Media is completely ignoring or glossing over like:

Have you heard about ANY of these things?  That's just from today's headlines!  What's the positive news that's moving the markets?  Stimulus, QE, more stimulus, more QE.  That is NOT the way to build a healthy recovery, my friends.  The only thing these actions have accomplished is creating the World's largest-ever wealth transfer from the Bottom 90% to the Top 0.1% and, as noted in the rising levels of Corporate Debt and over $1Tn in Student Loan Debt and $1Tn in Auto Loan Debt - the bill will once again be handed to the bottom 90% while the Top 1% get more bailouts.  

Enough said!