As we have been saying for 2 years now, the markets have not been functioning in any resemblance of normality. The list of high profile and exceptionally bright investors and traders who have broken their silence on market functions is growing very rapidly ( Yardeni and Gross to name the latest). We can identify a few reasons for this:
1. The invention of Quantitative Easing.
2. Global Central Bankers interference in the markets by directly purchasing of bonds and stock futures.
3. High Frequency Trading and Algorithmic Program Trading utilizing "quote stuffing"
4. ETF distortion and manipulation programs
5. Extremely large trading volumes concentrated into a few market participants
6. Advances in trading technology and lagging monitoring and governance tools
7. Risk distortion and index gaming
8. The total transference of economic power from governmental agencies to trading and investment firms
Welcome to "The New Market Order".
You have 4 choices:
1. Choose not to participate and watch your purchasing power erode
2. Throw out 150 years of investment books and teachings and jump in
3. Change the system
4. Move on and find other ways to enrich you life and your wealth
In my 22 years in the investment and trading business, I have never seen such a total lack of interest in the markets by such a large majority of the American public while the global stock markets are hitting new highs. I guess most people on the planet have more important things to think about than what the global stock markets are doing. This is not a good sign. No new fodder for the machine. A small amount of participants for an ever decreasing expected return.
A major correction is coming.
