Jim Cramer on Staying Upwind When You Start a Fire
March 16th, 2007I’ve written about leverage, the Plunge Protection Team, manipulation and funny money squeezes for years on Cryptogon. I told you that trying to trade this crap, as a retailer, is the equivalent of bringing a knife to a gunfight, and that the smart money doesn’t rely on luck.
Don’t take my word on any of it. I mean, what do I know, sitting here in my underwear and my tinfoil hat?
And now, Jim Cramer:
Research Credit: balogh and Bull not Bull
Posted in Economy | Top Of Page
Does anyone doubt that Financiers are the most intelligent, predatory, velociraptor-like persons on the planet??
If you have such doubts, please take a look at the following article:
http://www.itulip.com/forums/showthread.php?t=1078
In sum: The Instigation Profiteers AKA the Financiers AKA The “Them” have set in motion a financial war (which actually means “a resource war,†as liquid finance is simply the tangible representation of the energy flux that is represented by the transfer of actual physical resources back and forth among different individuals) that pits:
a. Asian and Middle Eastern financers of U.S. debt
against
b. U. S. subprime homeowners against U. S. citizens with prime credit.
I’m not going to expend any energy explaining how this article demonstrates what I just stated; the majority of people who read this blog are intelligent enough to figure it out themselves.
If you can’t figure it out, then try harder.
p.s.
Modern finance is the only true Crime against Humanity.
p.p.s.
A quiz…
Who will win the resource wars, A or B??
Wrong!
It’s C, the Financiers as They will used the conflict (that They so cleverly instigated) between A & B, and the resulting chaos, to usher in Their totalitarian order.
Apparently, God does it exist.
http://www.nytimes.com/2007/03/09/business/09rothschild.html?ex=1331096400&en=87e83812c6c82a8f&ei=5088&partner=rssnyt&emc=rss
p.s.
Remember Kevin’s, “Spies, Lies, and KPMG” post???
Look for a paragraph near the end of the article showing a connection between Diligence, Inc. and N. Rothschild.
p.p.s.
There is no one on earth that is capable of convincing me that the Rothschild family and its dynastic subsidiaries, both business and ethnic, or both (as in the case of the Heinz fortune and Teresa Heinz-Kerry), are in control of less than 1/3 of the entire world’s wealth.
Please disregard the typo (or Freudian slip) in my Rotschild-related comment; the comment should begin, “Apparently, God does exist.” not “Apparently, God[,] does [I]t exist.”
“I’m not going to expend any energy explaining how this article demonstrates what I just stated; the majority of people who read this blog are intelligent enough to figure it out themselves.”
I consider myself fairly intelligent, but I gotta be honest guys: most of this financial mumbo jumbo confuses the fuck out of me. And the shitty part is that this confusing financial BS is the means by which we are all controled.
I love the line where the financial guru says that he loves manipulates the futures markets by selling long or short or some shit, and then basically fucking over all the regular investors who fall for the trick. Fucking vultures.
– Mike Lorenz
Mike,
I used to trade my own account, intraday, for a half-ass living. Rule one of trading: Shadow the axe, don’t get hit by it.
It’s simple.
The axe refers to the market maker (financial institution) who is dominating the action on a stock, or basket of stocks, in any given period of time (usually minutes, sometimes hours). There is no denying that this happens. All traders know this.
Who’s the axe, RIGHT NOW? He does his best to hide that fact.
How does the Axe make his money? By faking people out, and positioning himself to profit by setting up situations which maximize two things: 1) Greed and 2) Fear.
The whole point of stock markets is no different than a casino. Bring idiots in off the street and clean them out. The firms need the liquidity that the individual account holders provide. This is what the firms call “dumb money.” Seriously. The financial press refers to dumb money as “investors.” Sometimes the “investors” win. Sometimes they lose. It’s not a gamble for the house. A vegas casino is a much cleaner environment for gambling, actually. It’s a straight numbers racket, with the odds in the house’s favor on every game. (If you count cards they’ll kick you out. If you try to keep doubling on each loss to eventually win, you’ll soon hit a table limit and be out a pile.) With Wall Street, it’s literally pin the tail on the donkey.
As Cramer said, the fundamentals don’t matter. Absolutely right. When I used to trade, I didn’t pay any attention to earnings or news at all. It seemed that there was no correlation between the fundamental data and the price movement. It’s because there are all these leverage money games happening with the market makers.
I got sick of the intraday hack. I started looking at longer term gambles. (This is all gambling. Anyone who tries to tell you otherwise is either in on the scam, or totally clueless.) At some point, I might describe what I found. It was interesting and seemed to work because it assumed the absolute worst criminal behavior on the part of insiders.
kevin that was very interesting, i would love to hear more.
it is my belief that, “leverage(d) money games happening with the market makers”, may supress a stock with strong fundamentals temporarily, but eventually market pressure will force it to move.
would you agree?
You know what I loved about this clip? The discrepancy between it and Cramer’s “Mad Money” persona. On TV, he sounds like a deranged, used car salesman pitching to the rubes. But then again, that’s his audience. Who else would get investment advice from the TV. On this clip, you saw a calm man of intelligence. What I wonder though, since I’m sure there are more than a few winning strategies, is whether or not the TV can be used as a counter-indicator. As in, if the TV’s shilling, you best be selling.
Additionally, I LIKE that the smart money punishes the dumb money for being:
A. Greedy;
B. Cowardly.
I mean, people who only want to make money via arbitrage, as opposed to wealth creation, kind of take their chances. I think a fundamental problem with people is they’ve been hypnotized into wanting a symbol of wealth rather than actual wealth.
One thing I’m curious about; If one can separate the smart money from the dumb money by the former knowing of the Axe and the latter not knowing of it; what are the other separations within the group of people who know about the Axe? I’m also assuming that once one has a accumulated enough wealth, one can become a market-maker, although I’m sure that one can lose everything just as easily in that realm too.
Kevin,
Thanks for the explaination. I’ve always thought of the stock market as a casino, and a rigged one at that. When I’ve suggested to friends and family that trying to make money on Wall Street amounts to nothing more than gambling, they give me the typical “Mike’s talking out of his ass again” look. Of course they all like going to the boat and I think gambling is a perfectly stupid waste of money, so that may explain something.
– Mike Lorenz
Kristofer,
In my opinion, the fundamentals are always relevant, just not for us, the “dumb money.”
Every single second of every day that anything of value, i.e. a corporation, exists, its value is in constant flux; I would speculate that the degrees of deviation aren’t that great most of the time, but, every now and then, there’s a drastic change in value, e.g. New Century Financial.
The financiers’ goal is to continuously obtain these value changes in real-time, which is why They are determined to construct a digitized, interconnected, worldwide surveillance/information transfer matrix to provide them with the means of ascertaing constantly changing values 24/7/365.25.
When They obtain these values, They keep the information for themselves, and use media institutions to force you to behave in a way that, in the long term and at a minimum, prevents you from profiting from these value changes, and, at a maximum, They prefer that you trade this value flux in a manner that causes you to lose tangible resources, represented in liquid form by the currency or credit you are trading.
Having said that, I present the following as a response to your comment: THEY are the market, and, no matter the true value of any resource at any given point in time, THEY will manipulate that value (at times, using the very credit or currency you are trading to do so) so THEY may profit at your expense; in other words, it’s a game you can’t, in the long run, win unless you’re one of Them or one of Their valued, but very expendable, agents.
p.s.
All the technical BS, as well as the BS about fundamentals, is simply a way to make your trading behavior predictable, so They can profit from your predictability.
“All the technical BS, as well as the BS about fundamentals, is simply a way to make your trading behavior predictable, so They can profit from your predictability.”
Word.
@ Ozzy “The Man” Diaz
>>what are the other separations within the group of people who know about the Axe?
Most traders are bums, in terms of their power on that thing. Individual traders are like ants under a steam roller. Most market makers are like cockroaches under that same steam roller. There are a handful of firms that have real power, due to their extremely deep pockets. No individual will ever win a fight against a market maker. No market maker would ever win a fight against Goldman Sachs. How it breaks down further, I don’t know anymore. I used to, somewhat, but that was years ago, and the info isn’t valid now.
The financial services industry puts out a lot of rhetoric about the transparency available to traders with tools like the Level 2 screen:
http://en.wikipedia.org/wiki/Financial_quote
Level 2 data used to work, but the market makers came up with sophisticated order flow management software to manage what they show on Level 2. They just use that thing as a PSYOP platform now.
This is an example of the types of things that happen every day. All traders see stuff like this, all the time:
Say some market maker, Goldman Sachs, for example, is showing 1000 shares on the ask at the market on Apple. Traders nibble at it. Goldman sells off those 1000 shares. Then he comes back a few minutes later with another 1000 shares. And another. Then another. Every few seconds now, larger blocks are being sold. He jumps back in, knocking the price down. Other market makers aren’t going to argue with Goldman and they get in on the act. Traders think, “Goldman wants out!” And they sell their shares, or get short even.
Minutes pass. The stock drifts down a few cents, a nickel, a dime, traders lick their chops. “Here it comes,” they think, and they yell, “Die pig! Die!” Dumb money gets frightened about seeing Goldman on the ask.
Things are looking good for the shorts, right? (I used Apple Computer as an example because this is called, “Shaking the apple tree.” It works on any stock, though.)
But now SIZE is showing up on the bid. Who is SIZE?
SIZE is SuperMontage, an order execution system that allows market makers to place fully anonymous orders!
http://www.nasdaqtrader.com/Trader/News/2003/headtraderalerts/hta2003-125.stm
The big fish didn’t want the little fish to be able to watch what they were doing all of the time. That’s why they came up with SuperMontage and got the criminal SEC to sign off on it.
So SIZE starts absorbing the sales. It goes away. Then Goldman sells some more. The stock falls a bit more. SIZE is buying again.
(Do you get it yet?)
“Is Goldman selling shares to himself via SIZE, or other intermediaries, trying to make it look like he’s dumping his shares?” Hmm. You’re beginning to see the light, grasshopper.
And then, out of nowhere, a buy program sweeps over the entire market. The futures start climbing.
Goldman is now on the bid showing (willing to buy) 5000 at a clip. Goldman is now a voracious buyer, wiping out the depth (shares available) several levels down the ask column.
Apple moves up on the momentum. Goldman laughs at how easy it was to frighten the dumb money traders into selling their shares, as it sits back, profiting as the dumb money whipsaws back into Apple, and the shorts get squeezed.
In other words, the Level 2 data became pretty much useless to individual traders. The “market depth” attributes are bullshit too. None of those numbers outside of the spread mean much, or maybe they do. Take your pick.
How long will that buy program last?
You won’t know.
Ask Goldman Sachs. They’ll know. HA
Have you ever seen an Aikido expert in action? Trying to pull money out of that thing is like trying to fight an 8th dan black belt Aikido master with a blind fold over your eyes. That guy will break your neck with his pinky finger and you won’t even know what happened. The beauty of the dumb money players: They tend to come back for more, if they don’t get wiped out.
Or, use a Matrix analogy. These firms built the Matrix, and individual traders are going to go into that thing and take money from the people who built it? People like Goldman Sachs? It’s possible, in theory. I mean, all casinos have pictures of people who have “won the big one” near the front doors.
Yes, I know, people make some money on that thing, sometimes. But it’s risk of ruin gambling. The amount of risk involved is grossly underestimated.
Firms like Goldman Sachs, Morgan Stanley, Lehman, control the futures, and, by definition, the direction of the overall market. They’re God on that thing. They’re the rainmakers.
I initially named the market maker in the story below, but I’m removing it now. It doesn’t matter who it was. Why? Well, that firm frightens me. There’s no way to know what they’re capable of doing. I’ll just call them Big Firm.
One day, things were looking good long on Amazon. We got a bit of a pullback during a multilane uptrend, lots of support. I got in heavy, 1000 shares. It wobbled around a bit, then the futures took off. Up and away.
I thought, “Wooo hoooo!†this is going to be a good one.
Buyers pouring in!
Wait.
What’s this?
Big Firm is on the ask.
HAHA Big Firm is up to his old tricks, that guy! Not going to fool me… * hands quivering at that point *
Futures rising. The Nasdaq 100 is climbing. It’s ok. It’s ok. Stand fast. Stand fast. (I was viewing the battlespace on three displays.)
Big Firm is selling AMZN. He’s keeping the lid on Amazon right now. Is he just trying to front load shares for himself before the pop??? What the???
Actually, the price is dropping. The support on the bid side, outside the spread, started to disappear on Level 2.
“F*ck this shit man.†I sent a sell limit order outside the spread. (This is a way to jump the line that forms at the exits when the theater is on fire.) I was lucky, someone took it at the market for a loss of only ten cents or $100 on that 1000 shares.
Seconds later, the long red candles started dripping down my multiperiod charts. Time sales cascaded red with large block sales. * my hair is standing on end even now remembering this, I nearly got decapitated on this one * The idiots in the chat room spat out things like:
AMZN REVERSE IT SHORT!!!
WHAT THE HELL??
HOLY CRAP
OMG
Etc.
Big Firm single handedly moved Amazon down nearly $2 in a couple of minutes, through hourly and daily supports. Well, not single handedly. They just used their deep pockets to frighten everyone into dumping. And the move took on a life of its own. I just sat back and watched it happen, in awe…
Why did They do it?
Someone told the chatroom I was in that it was about options expiration, and that Big Firm had obviously bought a bunch of out of the money puts that were about to expire worthless.
But guess what? Instead of expiring worthless, Big Firm just drove the price of the stock down until those options were in the money! I watched this happen. Amazon did that move on it’s own, without follow through from the futures or other tier 1 stocks.
As usual, don’t take my word for it:
Stock Price Clustering on Option Expiration Dates
That was it for me. I could think of better things to do than dog paddling in a shark tank.
So @ Kristofer, I hope this answers your question, too. If you feel as though you must “buy and hold” consider this:
https://cryptogon.com/?p=103
Financiers: above the law:
“[T]he authorities might have demanded a separation of customer advice and proprietary trading, they actually sanctioned an integrated business model.
This put financial institutions that were able to combine proprietary and customer business into a strong position. As a result of knowing what their customers were doing, they had an information advantage that provided a vital edge over other market users. The 2003 settlement gave them the message that the integration of customer and proprietary business was acceptable so long as it was policed properly.”
http://www.ft.com/cms/s/a2bfec80-d1d1-11db-b921-000b5df10621.html
Well, private equity has died; It’s almost time for The End to begin:
http://www.cnbc.com/id/17644624
Does anyone recognise Cramers continual sniffing and body language. This guy is on coke or maybe there is the small possibility he might have an actual cold. If both choices were stocks, I’ll pick the former!
I agree, having watched him on the tube off and on.
Definitive signals of a coke fiend.
You can watch some of the exact same body language courtesy of Al Pacino’s magnificent performance in “Scarface” (Pacino studied addicts to prep for the role).
I made 20% last year.
8% the year before.
12% in 2004.
24%in 2003.
I used sector ETF’s, REITS, small cap and International (ex-U.S.) mutual funds and commodities funds. I don’t trade actively much, once a year I revisit unless there’s a glaring issue in the portfolio.
YouTube keeps taking it down. It is currently here: http://www.youtube.com/watch?v=ZTt7IQB9rc0
But you can search for it after they take that one down.
You can’t hide the truth!
911 was an inside job!!
http://www.infowars.com