The Market Always Knows - September, October 2001
United Airlines Chart
ARM Corp. Chart
AXA Chart
Boeing Co. Chart

(Written September 16th, posted Oct 5th, 2001.)

I read with great interest a commentary from Vincent Cannestrero, printed in the International Herald Tribune, 14th Sept. Cannestrero is the former Chief of CIA counter terrorism operations. He noted that six weeks ago a confidential source with access to Mr bin Laden reported that Al Qaida intended to unleash hell on America. (This was understood to mean an imminent attack against US installations overseas.)

Now I have shown in classes often enough, there is always someone in the market with the inside information, and who is acting on that information. There is no doubt about this. Chart patterns clearly reveal this too. I also have seen, and have satisfied myself as to its truth, that major market events occur with the trend (which is why one must trade that way – with the trend) and that markets, oil in particular, knew of Iraq’s intention to invade Kuwait, 1990, before it happened.

You should be in no doubt major US investment firms trade inside information. I quote from a most interesting book, ‘The Fortune Tellers; inside Wall Street’s game of money, media and manipulation’, by Howard Kurtz, page 55;
“Insana (Wall Street journalist) knew that his trader pal was almost always on the money. The way that inside information flowed through these hedge fund firms was phenomenal. They knew everything; made reporters look like goddamn amatuers. They were desparately hungry for information, since they were gambling with millions, even billions of dollars. The stakes were enormous.... The traders always knew.

Victor Sperandeo, in his great book ‘Trader Vic’ points out the same thing when it comes to the big bond traders in the US and the Fed interest rate decisions. There are very few Fed decisons that come as a surprise to the big institutional bond dealers. There is simply too much money at stake...

This time perhaps, the inside trading may have been much more sinister. Who knows. Snapshots follow, you make up your own mind.

And added Sept 30th;
Fox news reported Sept 19th; German and American investigators have said they are looking into claims of suspicious selling ahead of the suicide strikes in New York and Washington. They have reportedly been checking stock swings last week, particularly those of three major European reinsurance companies Germany’s Munich Re, Switzerland’s Swiss Re and AXA of France.

And from Bloomberg Sept 18th; “Bloomberg data shows that trading in so called put options, which profit when stock prices fall, in airlines UAL Corp, and AMR Corp, surged in the days before terrorists crashed hijacked United and American jets into the Twin Towers an Pentagon.

The Economist magazine, sept 22nd issue, page 51 noted, in relation to forewarnings of the attack;
Other warnings went unheeded. In August Mossad told the CIA that up to 200 terrorists were slipping into the United States to attack a big target. Three weeks ago an anonymous letter to a radio station in the Caymen Islands said that three Afghans who had been arrested for entering the Caymens illegally might be involved in plans by Osama Bin Laden to attack airlines in America.

note the following;

  • These charts all broke into new lows just three days prior to Sept 11th.

  • Dow theory clearly shows all stocks rise into good news and fall into bad news, with the announcement (event becoming public) usually bringing the change in trend.

  • You will have seen in our classes repeated examples of investigations into irregular trading in many stocks, Crown and Onetel to name a few. Somehow these investigations never seem to get very far, and quietly are forgotten about.

  • Short selling is easier on European bourses, which do not require a short sale to be executed on an up tick, as is required in the US. (An uptick is a sale of shares at a higher price than the sale immediately prior – the US also closely monitor ‘wash sales’, ie buying a few shares higher, deliberately by the same broker, to facilitate that all important uptick, to then short sell much more.)

  • Note the turns this year in air stocks, often around the 20th /21st , especially in UAL. Were they timing themselves into a likely solid Sept 21st low ?

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