19 July 2019

Stocks and Precious Metals Charts - Feeling the Risk - Options Expiring

"The historical evidence is overwhelming. Many societies have done well for a while – until powerful people get out of hand.   This is an easy pattern to see at a distance and in other cultures.  It is typically much harder to recognize when your own society now has an elite less subject to effective constraints and more able to exert power in an abusive fashion.  And given the long history of strong institutions in the United States, it appears particularly difficult for some people to acknowledge that we have serious governance issues that need to be addressed."

Simon Johnson

"It is as popular now as ever to blame poor people for their station in life. Republican politicians love to talk about how poor people could stop being poor if only they made better choices or worked harder. If only they'd stop buying iPhones, they could afford insurance! These assholes - and I do not use that slur lightly - have no clue what it is like to grow up poor. They have no clue how hard it is in many places in the US just to keep the lights on and food on the table.

It is easy for them, from the comfort of their cushy offices and homes, with full bellies and bank accounts, to pretend that poor people like my mother are poor because they are stupid or lazy or ignorant or irresponsible rather than confront the broken systems that perpetuate poverty in Appalachia and all across the US.

Poor people don't contribute to reelection funds, but those who profit from poor people sure do. Therefore, truth be told, most politicians couldn't care less about the plight of the poor. There's so much profit to be made from poor people - think payday loans, high-interest rent-to-own stores, for-profit colleges, and overpriced mobile homes - that politicians and their crony-capitalist donors have a vested interest in keeping them poor."

Joshua Wilkey, My Mother Wasn't White Trash

Stocks sold off fairly sharply today.

One could point the finger at unrest in the Middle East, as Iran was blamed for seizing not one but two British tankers.

The VIX responded and so did the US dollar.

But gold and silver fell, in response to the Dollar but without regard to risk. For now.

I include my chart below showing the three ways of picturing this presumed consolidation pause on the gold breakout.

As you can see, my preferred formation the symmetrical triangle is making a very good fit. Gold came back down to test or 'kiss' the triangle after the initial breakout. In the other two gold merely retreats.

The market is expecting a 25 basis point cut at the next FOMC meetin on July 30-31. They had been thinking of 50 basis points. There was quite a bit of speculation on that earlier this week, sparked by some comments from a Fed head.  The Fed has gone to some pains to correct that misperception.

And while no cut is certainly a possibility, I think it might shock the markets.

The markets are so spoiled on their bubble milky that they might even sell the news on a 25 basis cut.

Well, whatever. We'll have to wait for that one. I have included the economic calendar for next week.

Let's see what next week brings.

Have a pleasant weekend.


18 July 2019

Stocks and Precious Metals Charts - A New Phase in the Currency War - Stock Option Expiration Friday

"And, for the same reason that they do not please Him, they succeed in pleasing themselves.  Hence, they become both self-satisfied and self-sufficient – they think they know just what they ought to do, and that they do it all; and in consequence they are very well content with themselves, and rate their merit very high, and have no fear at all of any future scrutiny into their conduct...

For men shall be lovers of their own selves, covetous, boasters, traitors, heady, high-minded having a form of godliness, but denying the power thereof.   Evil men and seducers shall wax worse and worse, deceiving and being deceived."

John Henry Newman

"Since God has accepted you to be among His people that He loves, you must clothe yourselves with tender mercy, kindness, humility, gentleness, and patience.  Make allowances for each other’s faults, and forgive anyone who offends you.  Remember, the Lord forgave you, so you must also forgive others.

Above all, clothe yourselves with love, which brings us all together in harmony.  And let the peace of the Lord rule in your hearts.  For as members of one body you are called to live in peace.  And always be thankful."

Col 3:12-15

'All successful revolutions are the kicking in of a rotten door.'

John Kenneth Galbraith

The Dollar took a dive in the afternoon.

Gold and silver broke up higher with some energy.

There are indeed a couple of ways of marking the current formation on the gold chart.   I have chosen a symmetrical triangle, but one could also make a case for an ascending triangle, or even a bullish flag.

What is more important is that each of these describes an underlying condition of an item that has risen in value, and that is taking a pause to consolidate its price gains before moving higher again.

Gold and silver both seem to be doing this.

Stocks also caught a bid, and the perception of risk fell as measured by the VIX.

So what is going on here?

The central banks of the Western world have declared themselves for low to negative interest rates, which is another form of printing money.

And despite modern theories to the contrary, when governments print money, the wise find forms of refuge for their wealth.

And for now even stocks, and the bubble in financial assets, provides such a refuge.   Only cash is trash.

And the public is being picked clean while being distracted by public circuses and reality show carnival style government.

Well, that certainly is a weighty and expansive manner in which to view things, but it has served well during this period of bubble-nomics.

Let's take this one step at a time.   The manner of any retracements and future short term moves will help to identify the specific nature of this breakout.

It does appear that the years long dampening of the precious metals have been the last great push of the NY-London gold pool, and that a new phase of the currency war has begun.

But it is still the same, crooked system run by insiders for their own benefit, lacking in any meaningful reform.

Repentance, forgiveness, and thankfulness.

Have a pleasant evening.

17 July 2019

Stocks and Precious Metal Charts - Dissent From Financial Narcissism - Netflix Hammered After Hours

"The dogs in the Street look worried..."
"Gold is being accumulated, by the wisest among us, as a safe haven asset to buffet the expected effects of a very ugly contraction, one that is man made in every respect.  The dogs in the street look worried, and so they should be."

Mark O’Byrne

"Signs of decreasing volume of industrial output are proliferating worldwide. FedEx and days ago DHL issue very negative outlooks. Maersk gloomy more than a year. Now, even inside US collapse in orders for big rigs to move containers. Trade in manufactures falling everywhere."

Dr. Harald Malmgren

“Hate obscures all distinctions.”

C.S. Lewis

"Intellectual freedom is essential -- freedom to obtain and distribute information, freedom for open-minded and unfearing debate and freedom from pressure by officialdom and prejudices.  Such freedom of thought is the only guarantee against an infection of people by mass myths, which, in the hands of treacherous hypocrites and demagogues, can be transformed into bloody dictatorship."

Andrei Sakharov

Stocks were once again wobbly, coming off the recent parabolic high which had narrowed to a few stocks of the FANG variety.

And they came off a lot harder after hours, as Netflix announced a big miss in subscriber growth for 2Q. The stock was promptly taken down over 10%.  And this weighs on the high leverage that these few big cap tech bubble machines have on the SP and the NDX.

Gold is threatening to break out of its symmetrical triangle. When it does and confirms, it could run higher almost as easily it did in the last breakout which has resolved into the current chart formation.

And wonder of wonders, silver took and held the '16 handle' today. Sixteen handles. There is a stealth catch up rally going on there. Let's see if they can hold and extend it.

The IMF issued a report today that says that the US Dollar is overvalued. And it sank on that news. Perhaps this will give Trumpolini a little more leverage in arguing policy with Larry 'King Dollar' Kudlow.

I am not persuaded that the markets are going to resolve these recent moves into trends, given we have a stock option expiration dead ahead, but especially because of the FOMC meeting scheduled for July 30-31. Well, if something happens in the meanwhile they will resolve pretty quickly.

Every so often someone writes to me complaining that I do not show sufficient and proper respect for our politicians (and the pampered corporate princes if you can believe it).  Yikes.

And, this just cracks me up, they are just dying to 'cancel their subscription' or 'withhold their donations' in punishment for my not catering to them, telling them what they want to hear, for not being sufficiently servile.

And well surprise, I don't have much regard for the powers that be these days.  Have you noticed?

I think Trump is a classic NY City shyster from way back, a pathological liar, and nuts.  The GOP are disgusting hypocrites and the shameless servants of the wealthiest few, and the DNC are untrustworthy rentboys for money and power who betray their base at every opportunity for Wall Street and Silicon Valley.  They are highly credentialed 'professionals' who play a great game in feeling your pain but doing as little as possible.   And the media are just stooges who take dictation for the deep state and the corporate powers.

So yeah, you might pick up a certain undercurrent of disgust, even revulsion, with the current situation and the lack of significant reform and regard for the common person. If that bothers you, get your financial information from some payrolled stooge and sycophant for the fat cats, and good luck with that.

I think we are in a bad spot, and don't see many bright lights on the horizon for the system internally.  I think we are heading for another financial crash, and a lot of ugliness is going to be exposed when the latest bubble recedes.

As a reminder there will be a stock market option expiration for July on Friday.

Have a pleasant evening.

16 July 2019

Stocks and Precious Metals Charts - Snakes and Ladders Economy - Stock Option Expiration on Friday

“Psychopathic workers very often were identified as the source of departmental conflicts, in many cases, purposely setting people up in conflict with each other.   The most debilitating characteristic of even the most well-behaved psychopath is the inability to form a workable team."

Paul Babiak and Robert Hare, Snakes in Suits

"What is good?  All that enhances the feeling of power, the Will to Power, and the power itself in man.  What is bad?  All that proceeds from weakness.  What is happiness?  The feeling that power is increasing— that resistance has been overcome.  Not contentment, but more power; not peace at any price, but war; not virtue, but competence.

The first principle of our humanism is that the weak and the failures shall perish.  And they ought to be helped to perish.  What is more harmful than any vice?  Active pity for all failure and weakness — Christianity."

Friedrich Nietzsche

"I’m not against business, or profits, or becoming wealthy. I have no problem with people becoming billionaires—if they got there by winning a fair race, if their accomplishments merit it, if they pay their fair share of taxes, and if they don’t corrupt their society.   But that’s not how most of the people mentioned in this book became wealthy.

Most of them became wealthy by being well connected and crooked.  And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson

Satan and his Antichrist
"Satan’s monomaniac concern with himself and his supposed rights and wrongs is a necessity of the Satanic predicament. Certainly, he has no choice. He has chosen to have no choice. He has wished to ‘be himself,’ and to be in himself and for himself, and his wish has been granted.  To admire Satan, then, is to give one’s vote not only for a world of misery, but also for a world of lies and propaganda, of wishful thinking, of incessant autobiography."

C. S. Lewis

Stocks wobbled a bit today, while the US Dollar gained.

Gold was off, falling back towards the lower bound of its symmetrical triangle.

Silver managed to add a bit to its recent stealth rally.

There will be a stock option expiration for July this Friday.

Shenanigans are underway, as is usual in our perversely bent financial system.

There was intraday commentary here about the early 20th century program in Germany to kill the elderly, the infirm, the depressed, the mentally and physically disabled, the dissident, homosexuals, and the homeless for the sake of reducing costs and increasing profits.

Don't turn away again and move on. 

Look, and see what The Market demands, what its predators, narcissists, and infantile sociopaths promote, and what you too, in the end, may become.