Many naive readers of Internet blogs subscribe to a theory that there is some government conspiracy to prop up the financial markets.
Many of the popular financial blogs propagate the idea that a secret group — the Plunge Protection Team — steps in whenever financial markets are threatened. With the full force and credit of the Federal government behind them, the PPT is able to thwart any efforts to move markets lower.
Let us consider today's trading as a case in point.
Since the Bearish Blogging Network teed up today's trading in advance, it is a great example. The technical analysts all cite the break of the S&P 1040 as a disaster. The Dow Theorists cite the break of the old lows as a Dow Theory sell signal. This was advertised in advance, and the key levels were all violated.
The Dog Not Barking in the Night
People readily look at events at infer causation. Most people fail when it comes to negative inferences. It is like the famous Sherlock Holmes tale of the dog not barking….
In this case we have the markets trading lower at a crucial support level. It raises the question:
If there were a PPT, why were they missing in action?
The challenge to the anonymous conspiracy buffs is to put up or shut up. Explain today's trading.
Meanwhile, if you are a reader of one of these sources, you should keep today's trading in mind.