Quote from: indio007 on August 20, 2011, 01:09:51 AM

The stock market is fundamentally rigged. Every week a portion of millions of paychecks go in. It has to go up. The gamers wait for it to go up 11% then take they profits dropping the price 11%. Then they repeat. It's been like this since the end of the .com bubble.

What is truly amazing is that with all this massive influx in capital every week, values would remain quite volatile. The VIX (volatility index) has stayed up near 40 for most of the last two weeks.

Even more interesting is that a lot of mutual fund managers have been saying many private individuals have been pulling their portfolios in favor of cash or treasury investments. Since people have been pulling their long term investments in such high numbers, and ceasing to input more money into stocks, I would expect some steady but serious declines. Until people gain confidence in the market again, they will continue to deinvest.

This is just a theory, but I would not put it past the Fed and/or the U.S. Treasury to directly invest in the market in order to prop it up. This would be especially true when it hits certain historic markers. I know there are a lot of deal seekers out there, but just anecdotally, I think that the loss of repeat investments through mutual funds would seriously limit the upswing in the market. Unless, of course, you have someone with "unlimited" resources that tries to trick the market to rally from time to time.

If my theory is correct, the dollar market will slowly adapt to the new amount of currency created in the economy and certain prices will rise much faster than normal.