09 April 2018

Stocks and Precious Metals Charts - Bullish Interruptus - Those Daring Young Men

"Fragility is the quality of things that are vulnerable to volatility."

Nassim Taleb

"Life is a school of probabilities."

Walter Bagehot

"We looked into the abyss if the gold price rose further.  A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.  Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."

Sir Eddie George, Bank of England, September 1999

Lately we have been seeing one day of a mad rally higher, followed the next day by a stunning reversal lower.

Today, they decided to break the mold and do both up and down moves of surprising breadth in the same day, in response to little or no new information.

Stocks were climbing higher from the start today, for no particular reason it appears, other than the desire to buy the dip. It was a fairly well-ordered but impressive move higher

But then about one o'clock today, the bulls seemed to lose their nerve, and the selloff began with the same quiet but relentless selling, taking stocks back down to nearly where the whole thing started.

Gold and silver caught a little bit of a bid, and managed to hang on to it despite the reversal in paper assets. The US Dollar did not fare as well, giving up its early and overnight gains to finish back below the 90 handle.
“We see that gold broke above its downtrend line. But now we see a massive base building in gold. Massive. It’s a five-year base in gold. If we break above this resistance line, one can expect gold to go up by, like a thousand dollars."

Jeff Gundlach
Late in the afternoon the news came out that the FBI had raided the offices of Michael Cohen, who is President Trump's personal lawyer. Yowza! That did not help the mood in the snake pits of Wall Street. 

Brace for twitterstorm?   Or for the firing of Rod Rosenstein who likely approved Mueller's FBI raid.  And perhaps Jeff Sessions who ran for the hills at the first sign of trouble?

There are reports that Cohen is under a cloud for campaign fraud, wire fraud, campaign finance and election law violations.  Trumpolini does not like to play defense, so let's watch for a reaction here that *could* move the markets further.

Don't know why, there's no sun up in the sky, Stormy Daniels.

It's never the crime, no matter how seemingly incidental—  it's always the cover up.

Facebook's Zuckerberg will be answering questions before the US Congress tomorrow, in an extravaganza of self-righteous recriminations from the very people who have been letting him do as he pleased while taking his money in campaign contributions for many a year.

It may even be as harsh as the tongue-lashing that the esteemed Congress gave to the financial people after the crisis, before doing nothing much about it except bailing them out and guaranteeing their fortunes with public monies.

These markets are like a vehicle being driven by hard drinking, pipe-hitting, out of control chuckleheads who are not going to stop pushing things to the limit and tempting fate until they wrap themselves around a telephone pole.

If we were virtuously governed they would have been stopped long before now, as they have a certain number of unfortunate innocents in the backseat with them, and other pedestrians and passers-by who are likely to become collateral damage to their callow pursuit of selfishness and greed.

Try not to get in their way.

Have a pleasant evening.