WHAT EVIL LURKS IN THE HEARTS OF MEN?

This headline and theme for the day should do well given French terrorism once again.

Separately some believe there is market manipulation taking place, a theme making the rounds on the street this week. “Notable commentator Art Cashin highlighted commentary from Keene Little at Options Investor that fleshed out this “conspiracy theory” even more. The first point that Little makes is that the market has been seeing huge gains in overnight trading, immediately opening higher and then barely moving during the day.

“This is frustrating for traders on both sides since there’s been very little to trade during the day,” Little suggested.

“It’s much easier (cheaper) to manipulate the market higher with overnight futures than it is during RTH (regular trading hours).”

Additionally, Little noted that much of the timing and movement of this action appears to have something to do with central banks and Brexit. Here’s his breakdown, via Cashin (emphasis ours):

“Many are questioning how the stock market could possibly be rallying so strong on what appears to be very weak fundamentals. Since the spike down into the June 27th low (post-Brexit reaction) there’s been much speculation that the central banks panicked and injected a lot of liquidity into the markets to prevent a sell-off.After all, this has been their mission for quite some time, now readily admitted by them. They certainly succeeded at their mission (again) with the big spike back up this month.

Essentially, while there have been statements from central banks after the UK’s decision to leave the European Union saying something to the effect of “we are ready to support markets,” Little believes central bank infusions are a significant part of what is driving the rally.”

Friday markets saw another attempt by some to ramp markets higher at the open. This gave a similar after hours price gap higher which didn’t hold but still allowed markets to recover closing unchanged for the most part. Economic data was quite mixed with inflation data higher led by higher rents (no surprise) and health care. Consumer Confidence fell sharply to 89.5 vs 93.5. Empire State Manufacturing slid to 0.55 vs 6.6 but Industrial Production gained to 0.6% vs 0.2%.