The PPT and the Government are Manipulators Nonpareil
This post is in response to TMFSinchuruna's recent blog:
I would have rec'd your blog 10 times if I could have, Sinchuruna. I agree with every point you made. I'm completely convinced that the PPT is pulling out all stops to manipulate the market. Every time gold opens higher, it magically gets tamped down. Every time index futures are down big, the market magically recovers. Just when the market was about to fall off a cliff a couple weeks ago, oil drops $10 and saves the market. The government is the biggest manipulator of all. How long can they succeed in preventing a meltdown? I've been blown away about their success so far. In fact, I've been contemplating a new investment strategy, which is to imagine that I'm part of the PPT and try to anticipate the PPT's next step. If oil or gold futures are up big, short them at the open. If S&P futures are down big, buy them at the open. When the VIX goes above 30, buy put options on it. If I had been using this strategy all year, I think I'd be sitting on massive gains. (As it is, I'm fortunate that my real money returns for 2008 are positive but not spectacular).
The only thing is, I'm convinced that the PPT will fail eventually. And then look out below! This kind of massive manipulation can't work forever -- the markets will eventually find their correct levels. I simply can't believe it has worked so far. It's hard to remain steadfast to your investment convictions when you strongly suspect that you're fighting a PPT with almost unlimited powers. But I think you have to stick to your convictions -- What else are you gonna do?