30 January 2015

China Takes Down Another 71 Tonnes of Gold Bullion From Shanghai

Major macro trend changes in long term buying habits by the world's major Banks don't matter.

Daily prices are perfect indicators of all information.  No markets are ever rigged.
Central Banks don't know any more about their own long term strategies than a beer vendor at a ball game, and have about the same amount of buying power to back them up.

People hang on every word from Janet Yellen's lips, but whatever China does is meaningless.

Nothing to see here, move along.  

Gold Daily and Silver Weekly Charts - Carry On

People who follow price alone, and believe that this is the truest indicator of future value, have a point.  And it is valid, based on a very short timeframe, most likely appropriate to a day trader.
And it is no coincidence that most day traders go broke. 
Most traders overall go broke.  They may have great runs for a time. I have seen runs at the crap table that were amazing.  I had a run at poker that was astonishing, and that lasted for a couple of years.  I had one night at the tables that was almost exhilarating.  I made some short term profits playing the futures that were almost jaw dropping. 
But they passed.  And then came the steady losses.  The most enduring profits I have made were done over a long time with a steady position, being right and sitting tight.  The key to that is 'being right.'  It is never easy.
People have different styles as traders.  Some like the thrill of the short term, and others prefer what is called 'value investing' and the longer term.   You have to pick what suits you.

But at the end of the day, most everyone loses except the casino, unless you can find and exploit some kind of edge. 
That is the best that I can and will say regarding a commentator about the precious metals who might say that all that matters is price, because it does not matter who is buying or selling.   Or why.
You don't need to know that.  You do not need to know the players or their possible motivations.  It is a point of view.  And a good one if you wish to be a price follower and a day trader, and not have a real clue about the opportunities one may have to make some serious money.  
The market makers and professionals all too often paint 'pictures' with price action.  To somehow say that price contains all useful information  and the truest picture at that moment is a corollary of the efficient markets hypothesis.  And I would like to think after umpteen price rigging scandals, that we would reflexively know that this is all rubbish.  And enough about that nonsense.
There are great changes underway in the world of money.  And you will either understand them now, or understand them later.  True, all sellers become buyers and all buyers become sellers given enough time. But that is the kind of timeframe about which Keynes remarked that 'in the long run we are all dead.'  Someday will come.  But its an odd logical fallacy to take the extremely short and the extremely long and reason from those examples, ignoring the great bulk of experience which is in-between.
As you may have noticed, most of the antics from yesterday's markets were erased today.  The sharp rally in stocks dissipated, and the big hit on gold was largely erased.
As I had said, we had a real test for the precious metals this week, most notably gold, which is the metal of controversy.  We had an option expiration, a first position day on a new active contract, an FOMC meeting, and a first estimate of 4Q GDP. 
So far so good.  If gold wanted to find a place to bounce, today's was about as good of a bounce as any. 
The bounce in stocks with the subsequent flop was not surprising.  The Fed hates to leave the market feeling like it has failed, perception management-wise.
Follow through is absolutely everything for gold and silver here.  We are now in an 'active month' and the first delivery reports have reflected that.   Deliveries were coming out of 'customer accounts' and the house accounts were the takers.  But you don't need to know that.
What you do need to know is that gold bullion is flowing steadily and heavily from West to East.  And that we are nearing the natural end for a currency cycle.   And that the price of gold and silver are based on leverage, and rehypothecation, and that these things have failed in the micro level, such as at MF Global, and can fail at the macro level, as in the failure of the London Gold Pool.
Please remember the poor.  Their lives are very hard, and they are easy to forget.  And not just the people who are poor in things, but also those who are poor in spirit, and unable to love.  Don't just worry and count your money, although that is practically important.
  Remember the only things that really endure, that will stay with you, as you truly are, a soul that happens to have a body, for now.  And that is measured not in dollars, but in love.
Have a pleasant weekend. 

SP 500 and NDX Futures Daily Charts - Not With a Bang But a Whimper

"Having someone who is the brother of one former president and the son of another run against the wife of still another former president would be sweetly illustrative of all sorts of degraded and illusory aspects of American life, from meritocracy to class mobility.

That one of those two families exploited its vast wealth to obtain political power, while the other exploited its political power to obtain vast wealth, makes it more illustrative still: of the virtually complete merger between political and economic power, of the fundamentally oligarchical framework that drives American political life."

Glenn Greenwald

"Reality is that which, when you stop believing in it, doesn’t go away."

Phillip K. Dick

Did you notice that the gains from yesterday were largely erased today?   The Fed and the Banks made their point, and the Street managed to squeeze out the Shake Shack IPO.

And so today was back to reality.
The GDP number this morning was quite bad.  And I think the chain deflator understated inflation by an appreciable amount, so the real GDP was probably a bit worse.   What one hand give back with cheaper oil, and hand scoops out even more for food, rents, and healthcare.
We are in a difficult period.  A great deal of bad behavior is being rationalized away, and these things tend to feed upon themselves.  It is very hard to know what is real and true, much less whom we can trust.  People are generally mistaken at the best of times, but it is worse when it is culturally accepted to lie, with the ends justifying the means.
Change is coming.  I am not sure whether it will be for the good or ill.   But it will be different.  The most important thing is to keep your head when others are losing theirs.
Our parents and grandparents had it no better.  I am coming around to the thought that every generation has its own challenges, and too often they are the same old things, human nature being what it is.
Life is difficult.  But it has breathtakingly beautiful moments.   Even while marching in a concentration camp, enduring suffering we can barely imagine, Victor Frankl was able to obtain a vision of love in the person of his wife, that led to his finally understanding what it means that 'the angels lose themselves in the contemplation of God.'
But in the meantime, we must pay the bills.  So lets see what the stock markets to next. as it may be telling. 
And keep in mind the 'first things,' the only things that, too long a time to even imagine from now, will be the only things that really mattered.  We say this, but we really do not know it, until God wipes our eyes clean with tears.
Have a pleasant weekend.

Gold Chart - Fingers Crossed

It would be nice to see an actual chart formation take shape and be activated.

This has the makings of a slanted double bottom or a slanted W, or a 'cup' although there is a lot of work to be done to fill that one out.

Or nothing, if gold cannot follow through.

29 January 2015

Gold Daily and Silver Weekly Charts - Triumphant!

Gold and silver were hit pretty hard this morning.  I am sure you know this by now.
The Fed and their Banks could not abide a negative reaction to their latest policy pronouncement.
So the Gold and Silver futures were crushed, and handily so.
And stocks, which were selling off for much of the day, caught a determined bid that seemed to come from futures buying that lifted those prices higher, and turned the day in the favour of the triumphant masters of money. 
As you may know from the calendar provided we are now getting into the active contract month of February.  Today was 'first position' day for February.
Let's see if the carney game on the Hudson gets any more actual activity in the Comex warehouses and futures pits, besides the usual game of Liar's Poker.
I understand that there is a lot of bullion activity for silver in the Comex warehouses, but I think that is more likely due to CNT, which is a registered warehouse, using the Comex to get their deliveries together since they are now a major supplier to the US mint.
A correction was due, and as I took some pains to point out last week, this FOMC meeting with the option expiry the day before was likely to provide a decent test of the recent rally.
Let's see how we go next week.


SP 500 and NDX Futures Daily Charts - Love That Shake Shack

Stocks were in the dumps most of the day, despite the 'better than expected' new unemployment claims report that was probably some kind of seasonal anomaly, but let's keep an open mind on that one.

Stocks found a footing and rallied into the afternoon, finishing in the green.

There were a lot of earnings reports in hot stocks after the bell. GOOG missed everything, AMZN hit EPS but missed the topline, but said good things about their margins, VISA is splitting. Yowza yowzers, get yer hot stocks and nekkid ladies.

Perhaps more importantly, Shake Shack is pricing its IPO tonight, and the Street has to make it look good to take it to market.

And besides, the Fed cannot have the markets selling off, even if their policy guidance was banal and largely ineffective.

Let's see how the macroeconomic issue sort themselves out, and not forgetting the geopolitical issues. This will help us to keep some sort of equilibrium in all this carney noise.


NAV Premiums of Precious Metal Trusts and Funds - Post FOMC Antics

My comment from last night remains just as applicable today:
"And you might wonder that gold did not participate in the safe haven move.  And unless you have been listening to what I have been saying here, you will not understand it.  The Western central banks are loathe to allow gold and silver to run free, because it would hamper their fiat financial engineering.

That their schemes will collapse on their own is probably a good bet.  But they are more than willing to expend their energies on hiding their mistakes in the meantime, rather than fixing the real problems.

No wonder the vast portion of the world that is not among the 'attendant nations' to the New American Century is recoiling in disgust from the antics that the Fed and its Banks have been playing with the dollar."