The stock market seems to be playing by a new playbook this week, with positive results. As the market’s offensive coordinator, late in the trading session each day at 3:15 stages a 2-minute drive to rally the Dow to a three-digit positive session.
This late money coming in soon after the crude pits go dark, has all the makings for a manipulated close, by buying in the futures contracts.
Now we know — or at least are aware of the President’s Working Group on Financial Markets — was created by executive order in the late ’80’s. Part of the order was that this group was to provide market stability during times of crisis. However, it could only be active in the futures markets by buying e-minis contracts off of the Dow and S&P 500 indices. Thereby forbidden to buy individual stocks. ETFs were not created when the order was written, but I’m sure they are in the playbook now.
Well, the last two days appear as if the Plunge Protection Team as it is known on the Street, appears to me to be the offensive coordinator in the booth directing the trading desks at the NY Fed on the sidelines with the play. The NY Fed then relays the play on the field to its trading partners at Citadel and BlackRock who pull off the trades.
This late stage comeback can only happen after the Nymex crude trading pits close, since oil prices are on a slippery slope to lower and lower prices due to a slowing global economy and stronger dollar.
Today appears to be going along the same path. Triple-digit futures gains on the Dow are fading into the opening as oil gives back some gains on the Iran capture of US seamen and release.
Tune into the markets at 3PM and see what happens as the PPT mounts another 4th quarter drive.