Gold Daily and Silver Weekly Charts - Life During Wartime

There is a steady drain of silver from the warehouses. Not large enough to matter, but a million ounces here, a million ounces there.

Let's see if the precious metals can make that triple bottom stick, and break the downtrend.

Longer term it is all about the physical supply. That is what matters in a nutshell. Everything else is commentary.

Have a pleasant weekend.

 

SP 500 and NDX Futures Daily Charts - Wild, Wild Week

The Fed's jawboning and some timely buying in the SP futures saved the US equity market, for this wild, wild week.

Follow through is essential, because technically stocks are not out of trouble.

Consumer sentiment is a lagging, not a leading indicator.

The notion that the US is exceptional and immune to problems overseas, especially Europe, is a canard.

What will they think of next?

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Moral Hazard, Policy Errors, and History Repeating

"Financial repression is sometimes the effect of policy even if it is not the intent. It manifests itself, for example, when policy makers react more forcefully to declines in asset prices than to increases.

Price increases tend to be treated with benign indifference. But declines often lead policy makers to respond with force, deploying fiscal stimulus and monetary accommodation. Market participants then conclude that governments have their backs...

Efforts to manage and manipulate asset prices are not new. But history provides little comfort that these practices work. Interfering with market prices occasionally buys time, but rarely do policy makers seize the window of opportunity to enact structural reform.

Financial repression embeds the wrong incentives—obfuscation begets delay, and a robust recovery becomes unattainable."

Kevin Warsh, The Financial Repression Trap, 2011

This is also one definition of 'moral hazard.'   And the fingerprints of officialdom were all over the markets today, pushing favored prices higher, and other disfavored prices lower.

The Fed's Bullard came out with a laughable statement that the Fed might consider extending QE3, which is fairly meaningless given that we are nearly at the end of the taper.

But concerted buying in the futures, specifically in the SP, gave a little more 'oomph' to the jawboning, and the markets were able to turn it around, although weakly, but still well off the lows.

I enjoyed watching the closing ticks on the SP futures into the end of day trade, and the quick drop off in the time from when the cash market closed at 4 PM and the futures paused at 4:15.

This is going to be a long grind in the metals I'm afraid. It will take quite a while for the reckoning to come, but then it does it will happen much more quickly than most suspect.

 

That is the way these big changes always happen: slowly, then all in a rush.

There was nothing of interest in the Comex metals warehouses and delivery reports, except perhaps a drain of silver stored at Scotia Mocatta which has been quite heavy of late.  But the other warehouses are well supplied in Comex terms.

 

What is most objectionable perhaps is that the current crop of pampered princes are repeating the very errors that led to and prolonged the human misery of the Great Depression. 

 

While they feign ignorance, and when pressed on their failures in the case of Chairman Greenspan even hide behind the excuse of blind ideological incompetence, it is difficult to believe that we have learned nothing, and continue repeating folly in the name of reason.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Fed's Bullard and the PPT To the Rescue

Stocks were selling off this morning, but the Fed's Bullard jawboned them off the bottom with the speculation that the Fed might have to extend QE3.

That gave the signal to the market, although what he actually said especially about the price of oil was somewhat contradictory, and did not make all that much sense.

But the Plunge Protection Team, tapping any needed money from the Exchange Stabilization Fund, started buying the SP futures, and continued to do so at a couple of key points in the day, and particularly into the close, with some wild price swings. The SP futures dropped almost 10 into the close off that late day buying pump.

So what next. Really, it's out of the Fed's hands, since the weakness is global. While the Fed could do much more, in particular as a key regulator, I do not think that they will be able to do it, with the kind of craven, financially coddled pampered politicians that are in leadership positions in the West. London and Washington come to mind in particular.

Stocks are at key support here, and the powers that be would like to see a bottom made here quite badly. Tomorrow is key for no further sell off, to give investors doubts and time to think about it over the weekend.

So let's see what happens.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Swiss National Bank Fights To Block Public Gold Vote

"Switzerland’s central bank is flexing its muscles to defend its cap on the Swiss franc. Its battle to fend off deflation – in which it sees the exchange rate as its chief weapon – is already complicated by the slide in the euro that followed European Central Bank easing.

Now the SNB is fighting on a new front: to block a populist motion that would force it to almost treble the proportion of reserves held in gold."

Financial Times - Swiss National Bank Fights To Block the Public Gold Vote

Crushing populist notions seems to be quite fashionable amongst the better classes of the West. Unless of course those notions are taking place somewhere else that has fallen out of their favor. Then they are all for democracy don't you know.

Sometimes I just don't have the words.   To watch the proud Scots go down to fear-mongering by the financial establishment and their pampered princes is bad enough.  But to hear that this may also happen to the Swiss people whether or not they believe in the Banksters makes me sick at heart.

Gold and to a lesser extent silver caught a flight to safety bid today as US equities were in full meltdown mode this morning on bad economic news that accentuates that, despite all the facades and window dressing, there is no sustainable recovery.

I have to chuckle at the Fed choosing to end QE3 in October.   As I recall, that last two times the Fed ended QE the equity markets dropped about ten to fifteen percent.

And so we have the US equity markets, which had been pushed to an obvious artificial high for the year to date by the usual Banks trying to get the largest IPO ever out the door in September. 

And the Fed sticks to their plan to end QE 3 in October, an infamously volatile month for stocks.  Why didn't they just choose October 29 for the official end date, and call it the Black Wednesday Stock Declines Initiative?

Well there is still some short term hope for the stock markets because this is a stock option expiration and the algos are able to shove this pig around the plate when the panic subsides, as we have seen.  One thing you have to give Wall Street:  they are not too lazy to steal. 

Fundamental analysis is passé, and we are operating in a fiat culture:  whatever power decrees must be true. And it is not likely that you will hear otherwise, except in conversations in the coffee houses and cafes.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Ebolanomics

The US economic numbers this morning sucked out loud.

After the bell Netflix missed its numbers and its stock was being monkey hammered.

Amex and eBay and Las Vegas Sands missed the top lines but hit earnings.

As I noted last week, it is easier to gin up profits with accounting, but topline revenue is a bit more problematic, unless you are a revenue recognizing sandbagger like a few tech companies that we might know.

As the markets melted down this morning, with a reported 179 flash crashes in the first 15 minutes according to Nanex, the talking heads were in fire drill mode, trying to figure out some way to restore confidence on Main Street, short of saying,  "buy our stocks.  Please!"

One of the themes the spokesmodels struck, believe it or not, was that a fear of ebola is dampening economic activity because they are afraid to go out and spend money.

Blame it on Ebolanomics. 

Ebolanomics. Yes I would imagine that is the reason that Netflix missed its numbers from last quarter. People are afraid they can catch a disease by watching crappy movies on television.

Most people are not spending more because they do not have any money, and they are reluctant to borrow and slip more deeply into debt.

They are afraid because they believe, based on what they are seeing, that the financial system is dominated by quasi-criminal cartels, and their political leaders are lying, craven, hand-waving nincompoops.

For the most, their real wages are lower since The Recovery™, and the one percent's wealth hoarding zillionaires do not buy the kinds of things that stimulate the economy through increased aggregate demand.  

Yeesh.  What is it going to take?

No matter how much money the Fed prints and hands over to Wall Street, the money has to reach the public to do any good.  You can see an existence proof of this phenomenon in every Third World oligarchy that is an American ally in the fight for the corporate brand of democracy around the world.

Have a pleasant evening.

Modern Crisis Leadership

Gold's Potential Triple Bottom and the 1.618 Golden Ratio In Timing

The timing is not exact but it is darn close.  Depending on when you measure the actual first two bottoms it looks like about 1.65ish.

Dave from Cincinnati sent me a picture of the gold potential triple bottom with his Golden Ratio calipers and brought my attention to it.

This ratio is probably more familiar to those technical analysts who follow Fibonacci retracements which are related to the Golden Ratio.

This last bottom may have come about five or six days late at 1.618 perhaps.  A valiant but failed effort perhaps to extend and pretend.

Close enough for government work.

I cannot account a trend change until we break the trend firmly of lower highs and lower lows.  But there is no reason not to have a bit of fun while waiting to find out.

Fat Lady Singing: The Alibaba IPO Top-Ticked the Market, Precisely

"As flies to wanton boys are we to the gods. They kill us for their sport."

William Shakespeare, King Lear

Wall Street puffed up the stock market indices to get the 'largest ever' IPO of Alibaba out the door.

Just in case you still had any illusions about these being 'free markets,' as if such a thing can even exist without the hard work of honest and objective referees.

After they took that piggy to market, the underwriters and the market manager (GS) let the markets go their own way.

Home again, home again, jiggety jog.