Wednesday, November 19, 2008

Tomorrow's Plunge Protection Team (PPT) fight

As many of you know, I made a call on Monday (LINK HERE) suggesting the possibility we may see the DOW take out its 7,773 downside resistance level sometime later this week. Well, after today, another 225 points is all that will be required.

With that said, several economic reports are due in the morning and I'm betting the resultant data will be bad.

Nov 20 08:30 Initial Jobless Claims
Nov 20 10:00 Leading Indicators
Nov 20 10:00 Philadelphia Fed Nov

I expect the PPT to have their arsenal at the ready for any break below 7,800 (which will probably happen sometime during the day), and then fight hard to try and keep the DOW above an 8,000 close.

Bottom line: Its very likely we will see one of those (increasingly common) wildly gyrating markets tomorrow as the PPT fights to keep their "market confidence" charade game alive - if they fail in their quest, their goose becomes cooked and 7,200 emerges as the next downside support level & target. (Note: It's going to happen - timing is the only uncertainty)

Chart of the DOW today:

Here's another from Barchart - shrunk to a 2 1/2 month scale

Note Oct 12th - that level will be strongly guarded tomorrow


Randy said...

Morning Update: Initial Jobless claims came In much higher than anticipated - 542,000.

DOW futures now down > 110 for the market open.

Anonymous said...

Well, according to my local paper, you're dead on:

Market Change Value
S&P/TSX -701.32 7,789.24
DJIA -281.87 7,715.41
S&P 500 -38.94 767.64
Nasdaq -58.05 1,328.37

Not sure it's coming back to 8000+ for close though. They got an hour -- and a MOUNTAIN of bad news to chew through.

Anonymous said...

Randy, I've been following your site for about 3 months now. I gotta say a big thank you for putting all this together. Its been the best source of info to me by far. As a result I have been able to make some really prudent decisions and I'm months ahead in terms of headspace and preparation than the rest of the masses.


Anonymous said...


Steven said...

Great Randy! Friday should be REALLY INTERESTING with OP EX going on.

Anonymous said...


Anonymous said...

You were right on the money!


Randy said...

Thanks for posting up everyone. Sorry for delayed reply, just returned home from work.

Anons 1:35 and 1:47 - My pleasure.

OP EX = Options Expiration -November options expire on Friday (A very big Deal -- Citigroup, GE, Merrill Lynch and others are expected to get clobbered);

However, no Gvt or industry economic reports are scheduled to be released tomorrow.

With that said, I expect the PPT to end this week on a positive note - in the green.

Regards to all



Randy said...

Clarification - Green for Friday's close, NOT for the week.

Anonymous said...

LOL at the market close. So we're supposed to believe that in the last half hour of the week everyone piled into the dow? OMG. How can they paint the tape like this and think the markets will believe it? I think they are just trying to have a controlled decline, to keep people from panicking and running on the banks. They have to know where it's heading. This is just unbelievable.

Good call Randy!

FOFOA said...

PPT EXPOSED!.... in Poland?

Polish watchdog asks prosecutor to probe late share deal

WARSAW, Nov 21 (Reuters) - Poland’s financial and securities regulator KNF said on Friday it had filed a complaint with local prosecutors accusing a "person acting in the name of JP Morgan Securities" of possible market manipulation. A spokesman in London for JP Morgan Securities, a unit of JPMorgan Chase, declined to comment.

The complaint is connected with transactions that took place on Nov. 12 when late transactions in what newspapers dubbed a "miracle" fixing session on the Warsaw bourse helped the main WIG20 index .WIG20 recover a good chunk of its losses. The index had been on track that day towards its worst percentage drop this year, falling as much as 10 percent before ending the regular session 9.1 percent lower. The regulator said a 130 million zloty ($42.8 million) order buying all members of the WIG20 pushed the index to close down just 4.9 percent. Warsaw stock exchange’s continuous session is followed by a fixing auction at which closing prices for most shares are set.

"In the opinion of KNF, the actions taken by a person acting in the name of JP Morgan Securities may be considered a manipulation of a financial instrument," the regulator said in a statement. "That is why the matter was forwarded to the district prosecutor’s office in Warsaw." The Polish regulator said the transaction was associated with an open position on the futures market. (Reporting by Chris Borowski; Editing by David Holmes)


That really silly theirs no protection against a massive selling panic.


Things can plunge.