Friday Focus: Centrally Planned Utopia

Since hitting fresh record highs the market has gone comatose.  The dullest market in decades?

Each of the last 5 trading sessions have seen lower prices in the morning, with a break to highs of the day into the afternoon.  Almost too predictable?   Isn't that how the Central Banks want it?

The Central Banks have created their own utopia.  A market that has nothing to fear.

The markets 'Fear Index' the VIX is getting close to printing new multi-year lows, just weeks after surging on another market hoax... #BREXIT.


If the financial media is blaming market weakness on something you can bet it will be another great opportunity to buy stocks.

As Long As These Pullbacks Have A Name Stocks Head Higher

The minute we see stocks fall sharply for no reason, we may have very well reached the top of this historic bull market.

What the market has finally come to realize is that every reason to sell, is really a reason to buy and every reason to buy is really a reason to buy.

Look no further than today's GDP miss.  GDP was also revised lower in the previous quarter.  Bad data means Central Banks have another excuse to keep feeding the debt monster.  Corporations can continue to buy back their own stock and hand out ever increasing dividends via the cheapest debt they have ever been able to acquire.

Those with debt needing to be serviced can do so on the cheap, without a care in the world about increasing their interest expense.

Bad news is tremendously good news for those under and over leveraged.  The debt laden and the debt free.  It's a utopia.  There is no fear when you can get money for nothing and augment your stock higher for almost free.

On top of that the Central Banks after gaming the treasury  market to historically low yields, and their currencies, have moved on to the corporate bond market.  The ECB is financing hundreds of corporations with some having a junk bond rating.  When the Central Banks are risking capital in the junk bond market, what kind of signal does that give everyone else?

The Central Banks are also buying the stock market.  Last night the Japanese announced a doubling of their ETF buying efforts.  A market is not a market when price is not allowed to be discovered.  Last night the Japanese doubled the value of their price fixing mechanisms.

We now live in a Utopia.  Junk bonds are risk free.  Stocks are safe havens as well as means to grow capital.  Debt is just a means to augment prices higher and with interest rates a non-factor executives are taking it on as quick as they can to finance the appreciation of their corporations stock.

There is no way this Utopia will fail......

.... as long as interest rates remain at these historically low levels.  Even with asset prices surging to never seen before highs, bad news will keep the interest rate monster at bay as Central  Banks continue to hold all the cards.  They can do no wrong.  And their game of asset price manipulation will go on until inflation and growth reach their 'targets'.... and if they don't?  More of the same, or more of more of the same until it does.

A Utopia for all they said......

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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