19 September 2014

Gold Daily and Silver Weekly Charts - Option Expiration

"The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations."

Andrew Jackson, Farewell Address, March 4, 1837
What a parcel of rogues in a nation.

Although it was not much discussed on bubblevision, today was the fairly important stock option expiration for US equities.   It was utterly overshadowed by the big BABA IPO.

Next week will be an option expiration for the precious metals on the Comex.

I cannot remember when sentiment was this low amongst the metals crowd since around 1999-2001 timeframe.

I do suspect we are making a bottom, and somewhat artificially low at that.  This ought to do enough damage to supply to provide for a high upside IF and WHEN markets become transparent and honest again.

But I will not say we actually have a bottom until we break this trend of lower highs and lower lows.  That is a mugs' game.  And there are plenty of mugs out there, who have called about forty of the last three or four bottoms in the precious metals markets.  Fear not, when the time comes, they will be 'right.' 

We need to maintain some discipline in our thinking and a focus on the fundamentals.  Talk is cheap.

So what does this mean?  Holding positions with NO leverage, and of a comfortable size with a longer term price horizon that do not interfere with short term cash flow needs.   To do otherwise places one at the mercy of the short term market speculators and manipulators.

If the precious metals are insurance, do you place all of your assets in insurance?  Hardly.

I know it is especially tough on those who hold the miners.  They are a leveraged form of bullion ownership.  And what is worse is the great complacency which so many mining execs act towards their own shareholders. 

Not to mention the so-called metals analysts who will unqualifiedly claim that there is NO rigging in these markets, after the many scandals of the last five years showing that if there is money to be made in any market, it will be rigged.

Have a pleasant weekend.