Plunge Protection Team, Black Helicopters, Etc.

I thought I would take a moment to Address the wide spread myth, nee belief in the Plunge Protection Team, and work it into yesterdays tape. The PPT is a growing myth involving a group officially known as the Presidents Working Group on the Markets. Set up after the big one in 1987, it exists as an advisory group to the president on the financial markets. Unofficially it has the duty of intervening in the open markets in the event of a cataclysmic one day drop in the markets, maybe. In the insane tape we have seen over the last 12-16 months dozens of terrifying market plunges have mysteriously turned around very late in the day, to erase gains and even turn the market positive, with no apparent reason. This phenomena leads many, especially dedicated short sellers to believe some shadowy federal organization is organizing nefarious bull raids to save the markets from destruction. As I am not a fan of black helicopter theories, I see this as the rantings of not so nimble short sellers who have had there profits taken from them, when they took there eyes off the markets momentarily.

Yesterdays tape and how I traded it explains a lot. Seeing the market yesterday morning attempt on several times to make new highs and failing right at the previous days highs, I initiated short positions at about 1100 am est. My instincts proved correct and the market continued to drop steadily til about 2pm. Some time in mid afternoon having built up substantial profits, and not wanting to risk them going to this mornings release of GDP and Continuing Jobless Claims, i covered my shorts and felt quite swell about my self! Covering shorts involves buying back previously sold shares, giving the market somewhat of a bounce. I can assure you minds far greater than my own with laughably larger account bases(read Beeeelions, mwha ha ha ha ha) executed exactly the same strategy, multiplying the effect. At this point I was done for the day doing the happy dance. I suspect sharp bulls and even sharp bears realized this phenomena, and bought into it, magnifying the squeeze. Voila! the PPT. If the Govt could really organize such a trick, COULDN'T WE SOLVE THE ENTIRE BANKING/ECONOMIC/BUDGET DEFICIT/WORLD HUNGER/AND THE BATTLE OF THE SEXES, BY SIMPLY SPECULATING WILDLY IN THE FUTURES MARKETS(since they know when they will successfully manipulate the markets), BOOK HUGE PROFITS, AND CALL IT A DAY? It is not that easy sports fans. This mornings release of the GDP numbers and Jobless claims at 820 EST, should set the tone for today's trading, good numbers should send the market scalding higher, let's go get em!