Stocks and Precious Metals Charts - And It Is

 

"The problem with movies and books is they make evil look glamorous, exciting, when it's no such thing.  It's boring and it's depressing and it's stupid.  Criminals are all after cheap thrills and easy money, and when they get them, all they want is more of the same, over and over." 

Dean Koontz

 

"Is it that we are that dumb, or they are just that brazen?" 

Jesse, 2008 

 

“I wish I had an answer to that because I'm tired of answering that question.” 

 Yogi Berra 

 

"While everyone enjoys an economic party the long-term costs of a bubble to the economy and society are potentially great.  They include a reduction in the long-term saving rate, a seemingly random distribution of wealth, and the diversion of financial human capital into the acquisition of wealth.” 

Larry Lindsey, Federal Reserve Governor, FOMC Minutes, September 24, 1996 

 

“Crime, once exposed, has no refuge but in audacity.” 

Tacitus

 

“He did not care for the lying at first.  He hated it.  Then later he had come to like it.  It was part of being an insider, but it was a very corrupting business.” 

Ernest Hemingway, For Whom the Bell Tolls

 

And there it is, ladies and gentlemen.   

Another precious metals futures option expiration on the Comex.

Another wash and rinse in the equity markets.

Don't blame Powell.  He is just the messenger, another manservant for Mackie Messer and the moneyed interests. 

Blame all those 'very important people' who tolerate a dirty rotten system in the hopes of getting a little more than they deserve for themselves. 

And the band played on.

Have a pleasant evening.

 

Comex Gold and Silver Options Calendars for 2017

Gold Daily and Silver Weekly Charts - Comex Option Expiration on Thursday

Gold and silver managed to hold their own today with gold showing a bit more lift perhaps.

There will be an option expiration on the Comex this Thursday the 26th for the April contract. As you may recall, April will be an 'active' contract for gold unlike March.

I have not looked at the composition of the options holdings lately, or the commitments of traders as well. There are others that do this much better, and I would rather look at their thoughts on this. Ted Butler does a very good job of keeping tabs on silver.

But at the end of the day, I have come to the conclusion that the Comex is a bucket shop now, basically a betting parlor without a fundamental linkage to the underlying commodities that form the basis of its bets.

I see it giving way to the great changes in world currencies. As I forecast several years ago, there is a strong movement to include the Chinese yuan in the composition of the SDR. Now, this would not mean all that much, unless the SDR was intended to take on more significance than it has today.

And of course there is talk that with the yuan there will be some element of gold included in the SDR as well.

We are not close yet to a resolution. The currency war is just getting hotter, as the forces of the New American Century still seek to impose their own order of things on the world, and counterforces with their own agendas oppose them.

And so here we are, between the cracks, trying to seek safety, and stay out of the way of the opposing forces of the will to power, and elephantine greed.

Have a pleasant evening.

A Comex Options Expiration 'With a Twist' - Where the Elite Meet to Cheat

"Tomorrow is an option expiration for the May precious metal contracts on the Comex. As May is not an active month, and the greatest contract activity is already moved to June, we may see an expiration with a twist."

When we were kids, we used to join hands in a line, and then swing hard around a pivot and play 'crack the whip' outside.  Once we got going the people on the end of the line went flying.

If you look at the distribution of calls and puts in silver in particular the 'price discovery' this morning makes some sense.  They were discovering what it would take to shake out the calls and puts for losses before they settled the price where it returned the greatest profit.

Oh no, you obviously do not understand the intricate processes of the market,  say Shill & Troll. This is not cheating. This is hedging. Look at the Dollar and the cross markets. And besides, there has always been cheating so this is nothing new. And you can't stop it, they will always find a way. This is just business. No one made you buy those options.

What we saw this morning is a classic shake-out fake-out.  These guys make carnies look sophisticated.

If it were not for manipulation and a foolhardy few, there might be no interest left for the Comex.

NAV Premiums of Certain Precious Metal Trusts and Funds - Crash In a Matter of Months?

In case you were wondering there is a Comex precious metal options expiration on Thursday the 24th.

Since the expiration is for the inactive month of May, I am wondering if they are not going to do an early hit with a head fake on this one as the day comes.

 Hard to forecast.  Typically a noted player will show their hand at some point and the pit crawlers will follow their lead.  They used to walk into the pit, but now I wonder if they just don't print it on the electronic trade, if you know what to look for.

The 'hit' on the metals was pretty much standard operating procedure this morning.

We are clearly in the 'wash' cycle for equities.  Except for the miners which are getting pummeled.  That is a hard trade lately.

Normally I take this sort of thing with a grain of salt, but I have quite a bit of respect for Richard Russell.  He has an interview in which he says that he says 'the dollar will crash in a matter of months.'

"The US will lose its reserve currency advantage within a few years or probably less time. Our defense against a weak economy is always to print more money. In a matter of months, I see the dollar crashing.”

Now the stock market I could understand, and agree with much of what Richard Russell has to say about it and the economy. Although as a traditionalist I would be looking more towards Sept-Oct timeframe, and would have to see a classic 'crash pattern' which has worked well for me in the past.  I have not seen that yet, and if we get close to it, I will start discussing it.   But it is the familiar 'failed rally' two step that I can find in almost every major US stock market crash.

But as for a dollar crash, I am struggling with that one.  It is possible but not likely.  And the obvious questions are why and against what?   Since the dollar is not pegged against anything, it would take a serious event to trigger a 'crash.'

And it takes quite a bit for a major developed currency to fail.  The Fed may not have a literal printing press, but they do have a Balance Sheet and can absorb any amount of debt they wish.   It may not be pretty, and it could weaken the dollar against some commodities and imports, but a crash?  That seems like a real long shot now.  But I am keeping an open mind on it.

As you know I am aware of the major hyperinflationary episodes of the past, and have been following the arguments of those who do and do not think it is possible with a sovereign currency like the US dollar.   And I think you know that my own opinion is that this is highly unlikely, excepting for some major exogenous events, and a colossal policy error or two.  Stagflation seems much more likely to me based on the lack of reforms.

But I thought you might like to be aware of what Richard Russell has to say, and what I think about it at this time.  Legendary legends make all sorts of predictions, and write their hits in marble and their misses in sand.  And I know I cannot forecast the future very often, except at the extremes.  And I am not there yet on any crashes excepting some unforeseen exogenous event which no one can really forecast.

Gold Daily and Silver Weekly Charts - Bounce on FOMC Day - 2014 Comex Options Calendar

Gold caught a bid today, largely driven I think by the exceptional weakness in the emerging market currencies and sustained buying of physical in Asia and the Mideast.

Silver lagged gold once again, which gives some credence to the 'flight to safety' idea.

The miners caught a serious bid which was a nice change of pace. It was interesting to see a news item that some ex-JPM bankers have raised $375 million to make some investments in the mining sector.   Cheat 'em, beat 'em, and eat 'em.  You keep what you kill is the creed of the Economic Hitmen.  

There is quite significant overhead resistance to gold both in terms of the downtrend and the 100 day moving average.

I am sorry that I failed to mention the February gold options expiration this week.   I have included the calendar for the rest of the year below.

The Comex warehouses saw no movement of gold bullion in or out.

Have a pleasant evening.

As a Reminder, Tomorrow Is Options Expiration On the COMEX

The goal line defense at 1400 gold is more understandable if one remembers that this is an important week on the COMEX.

Tomorrow is an option expiration for gold and silver, and $1400 is a psychologically important level for gold.

Round numbers like 1400 tend to attract a lot of 'buy to cover' stop orders and other types of speculative betting. So a break out through 1400 could trigger a quick run higher of another 30 or 40 dollars.

And perhaps even more significantly, this is the last week of the August delivery period, and gold is in relatively short supply for delivery. At this point a quick rise in price is likely to attract more contract holders to take delivery, rather than encourage eligible bullion holders to switch their COMEX warehoused gold to the 'registered' for delivery category.

I have included a snapshot of the calls that are subject to expiration this week in gold, and their distribution by strike price.  There are about 8,800 calls between 1400 to 1425 that will be expiring this week.

This is only a small part of the picture, but I think it is more relevant than usual for the reasons cited above.

We'll see how the price action continues through this week, for a better idea of what is happening. But it is hardly what one might call fundamentally honest and transparent.

If the cap on price seems counterintuitive you must have an old fashioned concept of what the markets are for, with such quaint notions as supply and demand and price discovery. These markets are all about power and influence, and using gimmicks and positional power and privileged information.

Sometimes when a coiled spring releases, it does so with some extraordinary power.

Gold Daily and Silver Weekly Charts - Option Expiration Tomorrow on the Comex

For those of you who are familiar with George Orwell's 1984, the histrionics about the search for arch-villain and espionage agent Edward Snowden reminds one of the search for the mythical enemy of the state in that book, Emmanuel Goldstein.

I will be curious to see what the equity market does, and how gold and silver go forward into the last few days of this delivery period with the existing inventory levels near record lows. 

As you know, when registered gold inventory has gotten to these record lows, it has marked an intermediate trend change within a month or so.

Speaking of contrary indicators, Dennis Gartman came out today and made some grunting noises about those unfortunates who own gold.  Dennis should know unfortunate, given the awesomely awful performance of the Gartman ETF (HAG.TO) which earlier this year went 'tits up' as they used to say in WW II.

For your convenience I have included the Comex calendar for the futures and for options below. 

COMEX Options Expiration Schedule For 2013

Gold Supply and Short Positions on the Comex: Option Expiration Next Week

"Let Ahab beware of Ahab."

Herman Melville, Moby Dick

As a reminder, next Tuesday the 28th is an option expiration on the Comex in the precious metals.

The set up in the market is interesting. I wonder who, net-net, is really holding the big physical short underpinning that inverted pyramid of paper?

Qui est le trompeur trompé?

"A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall...

"When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
"Weigh'd in the balance and found light!"

Jonathan Swift, The Run on the Bankers


"He who sells what isn't his'n
Must buy it back, or go to prison."

Daniel Drew

Gold Daily and Silver Weekly Charts - Comex Option Expiration Tomorrow

"If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will knock down everything that stands in its way."

Émile Zola

Tomorrow is Comex Option Expiration for gold and silver.

On Friday the US will release its advance number for Q1 GDP growth. Estimates are around 3 percent with a range of from 2.8 to 3.2.

I would not wish to hazard a guess on the number as they are quite fluffy and it appeals that they will become increasingly so when the addition of 'intangibles' is done a little later this year.

Watch employment and the median wage for a better indication, with and eye to corporate revenues, but not earnings which are often accounting fictions.

The shareholders of Barrick have rejected the Executive Compensation plan in what has been described as a 'tumultuous meeting.'  Good for them.

The rejection, which occurred at Barrick’s annual general meeting on Wednesday, was a direct challenge to a board that last year agreed to pay US$17-million to co-chairman John Thornton, which included a staggering US$11.9-million signing bonus — an unprecedented payout in Corporate Canada.

Barrick founder Peter Munk was defiant during the meeting, defending his company’s decision to bring on Mr. Thornton, who was a former president at Goldman Sachs.

Speaking of hubris, the Republicans in the House of Representatives are attempting to establish priorities in the event of a US sovereign debt default this summer.

Democrats are calling this the 'Pay China First Act' because of the manner in which it prioritizes interest payments to foreign holders of US bonds over veterans, soldiers, students and the military.

I would hope that Congressional salaries and expense reimbursements, perks and allowances are at the very bottom of the list. And I think clawbacks are not a bad idea as well.

This absurd talk about an artificially contrived sovereign US debt default may be one of the areas in which I could certainly find common ground with the Modern Monetary theorists. This is all posturing, reckless economic baby talk.

Comex Metals Option Expiration For Remainder of the Year - Hedge Fund Buying Metal Shares

As a reminder, next Monday is the March option expiration for gold and silver at the Comex.

Here is an interesting blurb on the steps the government of India is taking to dampen gold imports: fractional reserve bullion. I wonder where they got this idea?

"The government recently stopped requiring gold-backed exchange-traded funds to hold physical gold in the amount of their sales. Instead, the funds will be allowed to deposit some gold with banks who in turn can lend it to jewelers, which in theory should reduce imports for a time."

India Cultural Demand Defies Gold Curbs

And there is this tidbit:

"SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.

Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares."

SAC Puts $240 Million into Gold/Silver/Mining Shares Investments

As you may recall, it is Stevie Cohen's cohorts who are being frisked up for having traded on non-public information. Naw, couldn't be.

Kitco Corrects Their Gold Lease Rates Error

Kitco has corrected the significant error in their gold lease rates.

They corrected it the day after gold options expiration.

Before

After

Gold and Silver Option Expiration Calendar for 2013

I put together a calendar for the gold and silver option expirations based on the Comex contract information.  I looked for one with the usual suspects and could not find it.

The Comes does not have any silver options listed yet for October and November.

I will try and update any changes which they make as they year goes on.

Much Ado About Lease Rates - FOMC and Option Expiration

Here is the update from the LBMA on the Gold Forwards.

It shows little change, and even a slight increase today Monday.

The LBMA do not update LIBOR in real time, but do so with a lag. 

I did not see anything untoward in the LIBOR rates on another site, so I suspect that Kitco will be revising their charts sometime.

The only negative I see for gold is that this is an FOMC week.  And of course today is the February Option Expiration on the Comex.

The expiration date for the February 2013 options contract for Copper Option (HX), Gold Option (OG), and Silver Option (SO) is Monday, January 28, 2013.

I would not mind hearing an explanation for those Kitco gold lease prices chart from either Kitco or Sharefin.