Some really well thought out comments I read - author unknown:
Shorts afraid to make bets - fearing CB manipulation destroying their capital. Longs afraid to sell - fearing "tracking error" threat to careers for fear of CB manipulation. Nobody able to exercise judgement or basic common sense/analysis for fear of CB manipulation. HOWEVER, it is interesting to note steady deterioration of the demand/supply equations over the past few months. Viewing LOWRYs work, for example, "supply" has been on a steady up trend hitting new highs this week. "Demand" or "buying power" started to drop rapidly a year ago (July 2011) and "supply" or "selling pressure" began to rise sharply at the same time. The selling pressure curve rose above the buying power curve last August AND HAS REMAINED IN THAT CONFIGURATION EVER SINCE. During the first quarter market rally, the curves converged slightly but, in effect, the rally lacked any real "demand" and instead. seemed to rise on a low volume, algo-driven benchmark-chasing run marked primarily by lack of significant selling presssure. At the end of March, buying power began to fall again while selling pressure started to rise. In May, those trends accelerated and despite this week's "Best-Rally-of-2012" hype (presented by bullish financial "journalists"), the curves barely wiggled. I read this as simply a "Weekend-fear-of-"policy"-announcements", short covering rally from an "oversold" condition.
All this day to day jerking around by the "headline jockeys" is driving the players nuts. Having to base legitimate investment strategy on second guessing idiots with their weekend press releases is no way to run a financial system.
Finally, on my continuing skepticism about the next round of "QE - whatever", it seems like there is a universal belief that QE is coming, that it will save the day (hence, fear of shorting or long selling), and that maybe it won't work as well as the other versions. Somehow, I can't shake the notion that MAYBE (not willing to bet on this, but...) there won't be an imminent QE and that if there is, it will be puny, well below market "hopes" and "hoopla" and that it will get sold heavily. I still think this is an extreme contrary opinion, but that's all I've got.
