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Central Banks Globally Manipulate Markets
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March 31, 2016

CentRAL bANKER

Many, even the brightest and experienced investors, believe central banks and/or their agents, have been manipulating equity markets for the past nearly eight years.

Japan for example makes no bones about buying domestic shares on the open market. The Swiss Central Bank has also admitted doing likewise.

There are others including scattered European member ECB banks and the ECB indirectly.

Also central banks have been steady buyers of other central bank’s equity markets.

And, so it goes.

Today it was revealed by an article in Reuters that some state owned companies have recently purchased over $4 billion of stock in Chinese markets. They have been acting as agents on behalf of the government to support local stock markets.

Why should you care? This manipulation of markets renders them broken and illegitimate from a free market view. It also means investors just become shills in rigged game.

It’s disgusting.    

As for us we’re systematic, still long some and all the while raging at the machine. It’s a tough job mission these days.

Thursday bulls were able to manipulate markets to secure a positive quarter end no matter a minor close lower. This achieves for them a good headline and portfolio manager bonuses.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day green may mean leveraged inverse or red leveraged short. 

3-31-2016 3-21-18 PM

Volume was light once again and breadth per the WSJ was mixed.

3-31-2016 3-21-41 PM

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12-17-2015 9-04-44 PM Chart of the Day

 

 

 

3-31-2016 3-28-12 PM iyr

Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE

  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • NYMO DAILY

    NYMO DAILY

    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

  • NYSI DAILY

    NYSI DAILY

    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended on an intermediate term.

  • VIX WEEKLY

    VIX WEEKLY

    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.


     

So you’d think I’m upset about current central bank policy experiments? Well, I am, yet I persevere.

The tape is all a technician needs to follow ultimately. Fundamentals make you nothing currently.

Friday offers us a lot of data starting with the Employment Report, PMI Manufacturing Index, ISM Mfg Index, Consumer Sentiment and Baker Hughes Rig Count. That should be enough to chew on.

Let’s see what happens. 

...

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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.

Named as one of the Top 22 ETF Experts You Need To Follow on Twitter for continuing to deliver high quality analysis and commentary through the ETFDigest Twitter feed.

ETF Digest was named in the Top 50 Investing Blogs.

Ranked #16 in the Top 25 Best ETF Newsletters in 2015.

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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com

 

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