SP 500 and NDX Futures Daily Charts - Dazed and Confused By Financial Gimmickry

The US equity markets took a swan dive on the open, with a first hour of trading dominated by flash crashes and algo-driven volatility.

As noted previously, the composition of these markets is very fragile, and open to a cascading waterfall decline.  We can lay the responsibility for this right on the shoulders of the Fed, the regulators, the exchanges, with some help from a servile media.

And this is far from over.  The worst thing we can see now is a sharp rally back up with no change in the attitudes and connections to the real economy.

The dip was bought in part on a message from AAPL's Tim Cook to CNBC's James Cramer assuring him that their sales are proceeding briskly in China.

When Mr. Cramer shared this message online it helped to trigger a reversal in Apple which in turned triggered a rally off the bottom that lasted into the European close. Alas that was not to last, and stocks slumped anew as the dip buyers were suckered in, and stocks continued to slump into the close, albeit not at the lows of the opening bloodbath.

Today's commentary on the financial networks was just-- ridiculous.  They were pounding the table to buy the dip.   They were incredulous that the stockmarket could decline.  They were frightened and yet defiant.  And most of what they had to say was useless.

I am not sure we saw an actual capitulation today.  I have seen capitulations in selling, and this one did not quite feel right.  I think a good part of it is that these markets are dominated by computers, and much of the trading is not human, but algo-driven.  The first hour seemed more like a big flash crash than real selling.   And the rally back had a similar character.

We now are in the solid correction phase. I have noted the percentages on both of the charts below.  Both the SP 500 and the NDX futures tagged mid teen declines off the highs as they both fell out of their symmetrical triangle topping patterns.

Let's see how China does overnight.  This seems to be the big driver.  This notion of American exceptionalism and its singularly robust economy is so much baloney.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

Gold was functioning as a 'safe haven' this morning as the Dow Jones Industrials opened down 1,000+ points.

Silver was hit.  I bought a little more to add to the new position from last week.

Stocks recovered from their early losses into the European close.

 Let's see how the trading closes in New York this afternoon ahead of another day's trading in China.

The Street crawlers on the financial networks are pounding their desks for the public 'to buy the dip.'

Gold and silver were hit after the morning opening and will likely go out lower on the day.

I would be slow to do something like that.  Very slow.

China On Track For a Record Year For Gold Bullion Withdrawals From the Shanghai Exchange

In the latest week 65.3 metric tonnes of gold bullion were withdrawn from the Shanghai Gold Exchange.

Comparing the yearly demand at week 32 for China with prior years shows that it appears to be a record year in the making with 1,585 tonnes so far.

So much for the 'weak demand' in China.

Gold Daily and Silver Weekly Charts - Capped - Option Expiration Next Week

"MIT and Wharton and University of Chicago created the financial engineering instruments which, like Samson and Delilah, blinded every CEO. They didn't realize the kind of leverage they were doing and they didn't understand when they were really creating a real profit or a fictitious one."

Paul Samuelson

The precious metals were remarkably quiet again at The Bucket Shop®.

There were no gold contracts taken, and although there were 242 silver contracts stopped, customer to customer, which is much more than we have seen so far in this off month for silver, I don't see any particular significance to it.  Sometimes some metals sites do go overboard with trumpeting these little jiggles.  Maybe something is there, but not that we can see yet.

There was intraday commentary last night about the setup for a short squeeze in the metals titled Spec Flambe.   I do think that we will see more about this, and I will be watching the Commitments of Traders composition a bit more carefully for the next few weeks.

It is unusual for the private speculators to be so short this market, and it generally gives the commercials, the professional market makers and takers, to give them a bit of a run.

I suspect today was a lot of gold bulls taking profits ahead of the weekend.   Profits have been so scarce that one can hardly blame them.

I have included the economic calendar for next week below.  GDP seem to be the biggest thing.

We will have a precious metals option expiration on Wednesday the 26th which may be more of a thing for silver than for gold.

We had a nice rally off an oversold bottom this week.   Follow through is everything, so eyes on next week.

It is hard to believe that the end of Summer is nearly in sight, and the harvest time. We will be reaping what we have sown soon enough.

Please try to remember the poor, and those who have none to care for them.  And for each other, in our daily thoughts and prayers.   Life can be hard for everyone, but particularly for those who are burdened by the emptiness of their own hardened hearts, broken by disappointment, and lost in a misunderstanding of what it is to be human and to love.  Theirs is the greatest poverty of all.

Have a pleasant weekend.