How Timmy will make GM rally.
Timmy Geithner has learned that the best way to rally the market is to drop the market. If the market goes down for at least a few days then the “smart” guys start going short. After all this is the pull back that we have been fearing and maybe this is were the market is going to 5500 (dow). Two days before GM announces its sells report the market will finally go flat. The next day it will be up 20 to 33 points; not enough to cover shorts but enough to make you think. GM announce a 30% increase in sells and the market and GM rally. This forces the short sellers to cover. Along with investors putting money in the market it rallies over a hundred points for each of 3 days. It may continue from there or at 5 days it could stall.
I don’t know what gold will do. It should go down since this singles there is no more need to hide your money in gold. But until lately it rally’s with he market. So I will cover some of my gold. I will probably buy GM at 28 (the original suggested price of the IPO) or a little higher. You will see articles in the Wall Street Journal to collaborate with Timmy’s and Obama’s wishes. They will help run down the market, then be neutral, and then help run it up for GM’s announcement.
As far as gold goes, if it breaks away form influencing the market it no longer serves a purpose to Timmy or Obama. It ultimately will be to their advantage to get people out of gold and into something that creates jobs.; Like Business or Real-estate.
If this scenario is correct then a day and a half before GM announces it’s sells report GM will be very low. If it is moving up ward for a least a half a day to a day and a half before the report, then a good report should catapult the stock. If it is moving down up to the point of the report a good report takes longer to sink in.
It is crucial to know exactly when the report will be. They have been moving dates around to fit the market, this has cost me money in the past. The launch of the IPO was a day late and I thought my scenario was off, it turns out I nailed it (200 point drop, a flat day, then over night lower the dollar and then launch the IPO).
I also nailed the scenario for the senate elections but missed it by a few days.
Several months ago I wrote:
“If you wanted the market to be at 10400 or better in November and you want to claim credit for it, first you need it to go down. So what day do you start the decline and when do you let it bottom?
You would start it buy letting it run way over the 10400, then as it corrects you could use that downward momentum.
For the bottom: it would half to be about 8 weeks before the elections of Nov 2.…. Nov 2, minus 8 weeks. That would be Sept 7. Labor day is Sept 6 (a good day to make a speech.)”
They did exactly that only the rally started Sept 3 not Sept 7.
Never the less it shows how they use declines to rally and rallies to decline. If they want to run up GM they have to run it down, they will do what ever it takes to show a increase in sells just as the market is coming off a bottom.
You may of noticed before the IPO launch the market was heading down, then they lowered the dollar over night and tried for a “v” shape rally. GM did not do all that well. This time they will start a little sooner and more gradually. Since there is not much time for all of this they would have to start hard this Monday to drop the market.