Stocks and Precious Metals Charts - This Attractive But Deceitful World - Gold Hits 50% Fibonacci Retracement

 

“Only the humble believe him and rejoice that God is so free and so marvelous that he does wonders where people despair, that he takes what is little and lowly and makes it marvelous.  And that is the wonder of all wonders, that God loves the lowly.  God is not ashamed of the lowliness of human beings.  God marches right in.  He chooses people as his instruments and performs his wonders where one would least expect them.  God is near to lowliness; he loves the lost, the neglected, the unseemly, the excluded, the weak and broken.” 

Dietrich Bonhoeffer, Reflections on Advent 

 

“Evil when we are in its power is not felt as evil, but as a necessity, or even a duty.  Sin is not a distance, it is a turning of our gaze in the wrong direction."

Simone Weil

 

"These are suitable feelings towards this attractive but deceitful world.  What have we to do with its gifts and honours, who, having been already baptized into the world to come, are no longer citizens of this?  Why should we be anxious for a long life, or wealth, or credit, or comfort, who know that the next world will be every thing which our hearts can wish, and that not in appearance only, but truly and everlastingly?  

To those who live by faith, every thing they see speaks of that future world; the very glories of nature, the sun, moon, and stars, and the richness and the beauty of the earth, are as types and figures witnessing and teaching the invisible things of God.  All that we see is destined one day to burst forth into a heavenly bloom, and to be transfigured into immortal glory." 

John Henry Newman 

 

Gold and silver had a follow on hit this morning, but they took much of that back into the afternoon.

Gold in particular hit its 50 percent Fibonacci retracement support level intraday. 

This was a buy point in the metals for me, fwiw.

Silver rebounded with a vengeance.   Bought that on the slump too.

It does look to me like the usual wash and rinse action we see around a big contract month expiration, and is often a multiday event. 

There is no bigger contract month for gold than the December contract.   

And this does seem to be an annual event.  Especially with the regulators asleep at the switch.

Stocks were week, most likely for the end of the month profit-taking and rebalancing. 

The election seems to be a done deal, except for some fantastical stories from snake oil salesmen and the purveyors of clickbait.

The COVD pandemic is still kicking, and taking a toll.  

The talking heads were whining that the VIX remains elevated.   How dare it see risk in these markets.

 Let's see how the rest of the week goes.  

Have a pleasant evening. 

 

Who is the father of this ugly financial system?

Stocks and Precious Metals Charts - Sloppy Trade for an Options Expiration - Thanksgiving in Sight

 

"When a man takes an oath, he is holding his own self in his own hands, like water. And if he opens his fingers then, he need not hope to find himself again." 

Thomas More 

 

"Nemesis, the goddess of retribution and vengeance, the punisher of pride and hubris, waits impatiently for her meeting with us." 

 Chalmers Johnson 

 

"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought." John Kenneth Galbraith 

 

“There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true.” 

Søren Kierkegaard

 

Stocks attempted to rally but went out on the lows. 

Gold and silver rallied, but then gave some of it back in the afternoon. 

Let's see if their support holds next week.

Today was a stock option expiration, and the market action seemed to be heavily influenced by that.

Next week is the December contract metals option expiration on the Comex. 

Have a pleasant weekend. 

 

Stocks and Precious Metals Charts - Risk On! - Rattling Nonsense in Full Volleys Breaks

"The Lord is my light and my salvation –
     whom shall I fear?
The Lord is the refuge of my life –
     of whom shall I be afraid?"

Psalm 27


"For fools rush in where angels fear to tread
Distrustful sense with modest caution speaks,
It still looks home, and short excursions makes;

But rattling nonsense in full volleys breaks,
And, never shocked, and never turned aside.
Bursts out, resistless, with a thundering tide."

Alexander Pope, Essay on Criticism

Stocks were in a boisterous, risk-taking mood today on a much better than expected Non-Farm Payrolls Report.

The report was boosted by over 40,000 GM workers coming back onto the payrolls after a long strike.

The Dollar was slightly higher, but gold and silver were smacked down hard, as is traditional for a strong payrolls report in the heavily held December contract period.

But this all serves the purposes of the worst, who are loud and proud.

And so let all the worldly rejoice.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Chasing Beta On Light Volumes - Metal Prices Slump on an Option Expiration

"Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage.  And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been [or could be] passed.  Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun."

Kurt Vonnegut, God Bless You Mr. Rosewater


"Isn't it a riddle and awe-inspiring that things can be so beautiful, despite the horrors?  I've seen something wondrous peering through my joy in the beautiful, a sense of its creator.

Only people can be truly ugly, because they have free will to separate themselves from this song of praise.  It often seems they may drown out this hymn with cannon thunder, curses, and blasphemy.  But I have realized they will not succeed.  And so I want to throw myself on the side of the victor.”

Sophie Scholl

The saddest words in any language are those of irreparable regret, that come to haunt us in our last hours, 'If only...'

It was a risk on day in a big way today, as all the major stock indices ran up and out on new highs.

Optimism about China, and trade, and impeachment, and the economy all drove 'money on the sidelines' to try and 'catch up by investing' in risk assets at these bloated price levels.

If you were buying today it was not so much investing as banking on the greater fool theory and the quiet low volume markets in a trade-shortened week.

Gold and silver were lower, as befitting a major Comex option expiration.

We may get another gut check in the metals, given the quiet trading this week and the size of the December metals contracts.

On the brighter side, I have begun sous vide part deux today. The target this time are baby back ribs. Cooking time is about 24 hours at 155°. The ribs were vacuum sealed with a dry rub, a little brown sugar, a dash of liquid smoke, and a dash of bourbon early this morning and left in the fridge.  After they are done they will be quickly seared under the broiler or on the grill.  I'll let you know how it comes out.

The time grows short, shorter for some of us. And the powers of this world are never at rest, but prowl like ravening wolves, seeking to devour us.

Do not spend so much time looking at the other fellow and judging them harshly. First look to yourselves, and practice putting your own hardened hearts and foolish desires aside, for His sake.

The night approaches, and it is almost time to come home.  Do not be left out in the dark.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Don't Fear the Reaper

"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood.

For these few gold has been the asset of last resort."

Antony C. Sutton


"Like liberty, gold never stays where it is undervalued."

J. S. Morrill

Gold and silver were being capped most of the day on rather light volumes.

The CME inventory report for yesterday shows JPM was again the reaper for the bullion banks, bringing in 32,150 ounces of gold bullion to customer storage.   It appears that 1 bar each left the customer vaults of HSBC and Scotia Mocatta.  There was no change to the deliverable category.

As a reminder, next Monday the 28th is an expiration for November options on the Comex.  November is not a particularly big month for the gold and silver futures.

The mining stocks were hit today along with a general pullback in equities.  That often concerns those who watch them because it can signal a bear raid in the metals, with wiseguys positioning in related markets ahead of the hit.  But let's see what happens.

There seems to be a seasonal manipulation in gold and silver during December, most likely tied into year end shenanigans perhaps.   You can read prior articles about this here.

If they do that sort of thing again this year, I think they might be setting themselves up for a difficult first quarter with regard to available physical supply for delivery. It seems that the wiseguys will hit the wall again, taking it just a bit too far in short term greed, but one can always hope that wiser heads might prevail. If they do something and it doesn't break, the immature tend to double down and do it again. And again. And then it ends, badly.

Despite the antics, the structure of the physical gold bullion holdings in the US markets looks a bit stretched on the downside.  I am growing ever more persuaded that higher prices will be required to bring more metal to meet market delivery demands.   But since there has been a massive drawdown in the ETFs in the face of unrelenting demand for physical gold out of Asia, it could be a good trick. 

Better that they start earlier rather than later.  An exchange failure is not a desirable event.  And if a major scandal hits the Fed, it could not come at a worse time for them since they will be facing a massive confidence game next year with regard to tapering. 

Gold is flowing from West to East. This is something that obtain very little recognition in the mainstream media, and certainly not on from the financial media spokesmodels who appear as though they would be quite comfortable serving as the jaded but carefree hosts and hostesses for The Hunger Games.

As for me, I am ready for a perfect Manhattan, up with a twist. It's been a rather long week already. As Chekhov once said, "Any fool can face a crisis; it's the day to day living that wears you out."

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Appearance Versus Reality

As you know I have commented previously about the large drawdowns in gold bullion inventory from the COMEX and GLD among other things. And there is no similar decrease in silver bullion despite an even greater price decline YTD. There is intraday commentary on this here.

I have not yet figured out what is causing this, and I may never find it out. But it does seem to suggest that if gold should break out and run higher there is going to be a grabasstic rush to stake out all the deliverable and allocated bullion that you can find. YTD the gold bullion inventories are down in excess of 700 tonnes, but we see no decline in silver, platinum or palladium inventories across a broad spectrum of publicly disclosing entities.

So capping gold and silver makes a lot of sense here. Let's see how this impasse between supply and demand of real goods plays out into the end of December.

As you may recall we saw big takedowns in the price of gold and silver the past two Decembers. You can click on the two December Manipulation labels at the bottom of this post to see prior comments from last year.

So, one cannot predict what will happen again, but it will most likely be interesting.

Have a pleasant evening.

Gold This Time Last Year - A Faux Deal and Ongoing Currency Wars

The waters are a little muddied this time around because of the fiscal fluff and the January debt ceiling policy scrum to come, but lo and behold, gold rallied sharply on the last day of the year, after a series of repeated hits lower.

How unusual.

New year, same old games.

And Washington announced, in time before the markets close, that they reached a deal, kind of.

No grand bargain, but a deferral.

It looks like the Senate will agree to avert the tax increases for those with less than 450,000 per year in income, arrangements on capital gains, 40% inheritance tax on estates over 5 million, and AMT. It appears they will leave the budget cut wrangling for the debt ceiling fight in January, and possibly every two months next year after that.

The House will not have a chance to vote for it until later this week most likely.

And at the bottom, an update on Jim Rickards on the ongoing currency wars.

Gold and Silver Smackdown: Same Time Last Year

The takedown in gold and silver is fairly obvious, so much so that all but a career bureaucrat might have trouble not noticing it.

So how does one explain it away.

Who is selling this time? Soros? Paulson? And for what reason? Liquidation, redemptions, profit taking, tax selling?

Tax selling is fruitless unless you see a big change in the position coming anyway and are going to sell in the short term, because you sell and then have to buy back in.

Its possible to do it for pure capital gains considerations, but you have to be able to time/set the market price to suit yourself to allow a buy back in without losing on the price. Or you could shift assets from one market to another more adeptly without incurring the wash rule, that is, derivatives and stocks, playing the same fundamental direction if the regulators are asleep at the switch and don't have a look across your positions.

I have been hit several times in the past three weeks by people who claim to have talked to a insider friend who heard from 'high level money managers' in NYC, London, or Tel Aviv, that say that Paulson is facing redemptions and is selling off his GLD position. Everyone wants to be 'in the know.'

Well, I should like to think that these fellows are not cretins, just dumping positions carefully timed in ways to maximize the downside price movements. Unless of course it is purposeful, which there is almost no doubt in my mind that this is. There could be a squeeze on, and front running of forced sales, but the timing makes this a little problematic in my mind.

More likely this is the same thing which we saw last year. The bottom two charts are for gold and silver from last year.

There are any number of ways to explain this.

The one which I favor is that if a certain party is carrying a enormous, and losing, short position, one of the ways to manage the end of year mark to market would be to smack the price down as much as possible, and cover at least part of the short position going into year end, ending around Dec 26 or 27 given the "Buy to Close" rules.

This also provides a method of gaming that long term short position. Not only do you get to mark it at a lower price, but you can 'trade around it,' picking up metal on the cheap as weaker longs capitulate and toss it at the bottom. And the momentum wise guys get in on the action, the trading desks start spreading their rumours and deploy their useful idiot analysts and talking heads, and we have a major price bottom in the making.

For this and some other reasons, I think we see the usual rally in January, as the market starts to correct back to something roughly reflecting physical reality.

The complicating factor is that this time we have the 'fiscal cliff' to consider, and the potential for a liquidation event. That is a littler harder to play.

But Jesse, wouldn't other players in the market see this obvious manipulation and buy against the artificial price declines?

Yes in a theoretical model of independent players in an efficient market with transparent information and the rule of law this would happen. And how many moons orbit your planet, if you think this is reality given all that we have seen in the past five years?

How many scandals do you have to see and try to ignore before you 'get it.' The financial system is broken and corrupted.

As for now, there may be more downside, but most of it is over. Currency manipulation tends to overshoot. And this looks like a manipulation given the way in which all the usual correlations were pitched, and the downward movements were played in dull markets with concentrated selling. 

And I suspect we will be seeing the same thing next December, if the 'big shorts' in the metals are still on and being held by two or three of the big banks. As I recall HSBC is one of the big shorts.  A bank of their size and reputation could not possibly be involved in anything dodgy, with the officials turning a blind eye, could they?

So as always, the message is one of reform. Until there is justice and transparency and the rule of law, you may as well get used to this sort of thing, affecting an increasing portion of your daily lives. Not just precious metals, but the price of gasoline, electricity, natural gas, food, water, other staples, and your children's education.

And they will use their media to turn your anger against---  regulation and the rule of law.

This is not the abuse of 'big government' but the partnership of the monied interests and a corrupted government that is also known as corporatism, or deep capture. And where their interests align, the people should beware. They are becoming ever more open in their actions. And if you wake up and object they say, 'So what? How are you going to stop us?' It is an audacious oligarchy.

There will be no sustainable recovery until the financial system is reformed and the grip of big money on the politicians and bureaucrats is removed.

"It is the neo-liberal idea that has given us deregulation and de-supervision; that has given us the notion that markets can function on their own without breaking down or blowing up..

This is the great illusion of the last generation, and it fostered a form of economic growth that was intrinsically unstable and unsustainable. Why?...

To put it in simple terms, it was based upon financial fraud, on the most massive wave of financial fraud that the world has ever seen."

Jamie Galbraith, IG Metall Conference, Berlin, 6 Dec 2012