Federal Reserve Admits To Propping Markets
The markets opened slightly lower and slowly started their light volume climb back to the flat line. Things in Japan appeared to be quiet for the time being as the Nikkei rallied 5% last night. The markets came all the way back to the flat line with the SPDR S&P 500 ETF (NYSE:SPY) hit a high of $128.57. Yesterday, the SPY closed at $128.56. This created a perfect gap fill.
All of a sudden, comments surfaced from the EU energy chief saying the Japan nuclear situation was out of control. The markets started to sell hard, the SPY dumping all the way down to yesterday's double bottom at $126.51. Those comments were quickly pushed aside by the media as they claimed this EU energy chief had no new information and the comments were actually from last night. Sound strange? The SPY bounced over a dollar off the lows. As if that was not enough, it was then reported that the Federal Reserve of New York extended their 'open market operations" through 11:45am ET because of the panic in the markets. This is a direct admission by the Federal Reserve that they are their propping the markets up. Granted, most of the public has no idea what it means but sure enough, that was a pure admission of actual propping in the markets.
Oil, gold and silver are all higher today. Issues in the Middle East are starting to bubble up again. The United States Oil Fund LP (NYSE:USO) is trading at $39.61, +0.22 (+0.56%).