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Once again the dollar was weak, and metals rallied, while stocks wallowed.
I am once again long metals, short stocks. Options Expiration on the Comex tomorrow. If they cannot bring prices down watch for a secondary bear raid into the weekend. This is how they played the last one.
Of course it is possible that the paper bears will be broken in their attempts to take on the bullion demand, and will be forced to retreat and attempt to defend a higher price level. This has also happened around an expiration.
The US is heading towards a crisis that very few understand, whether out of ignorance or arrogance. I have been a little surprised by this, but it is only to be expected, and is the hallmark of the really 'big events' in which God let's us have our way, if only to teach us that our ways are not His, and bear the taint of death.
"In this world there's room for everyone, and the good earth is rich and can provide for everyone. The way of life can be free and beautiful, but we have lost the way. Greed has poisoned men's souls, has barricaded the world with hate, has goosestepped us into misery and bloodshed."
Charlie Chaplin
They'll never learn, it seems, except the hard way.
This is about the area where the bulls need to obtain traction and take this market higher, or risk losing control of the trend.
I added index shorts on strength today to bring my short term portfolio to a neutral stance, long metals and short stocks.
Flight to safety day as the European debt crisis continues to shake the markets. So we saw a rally in gold and the dollar, with stocks selling off. From a short term trading standpoint this downtrend is getting a little old unless we are seeing an intermediate trend change to the downside.
It looks like we might be a in period of chop and consolidation, with brief rallies and declines within some trend probably upward slowing.
I thought it was very interesting that the VIX remains relatively quiet. Watch this carefully.
A 'flash crash' is possible as the markets are thin and the technical gamesmanship and fraud are thick. Equally thick is the propaganda that dominates Western economic discussions and tends to cloud the problems and issues.
"We now know that there has been a dramatic reversal in world central bank thinking, and instead of selling gold as they have been doing, world central banks, on balance, are buying gold. We know that China, Russian and many Asian countries are urgently increasing their gold-to-reserves ratio.
Rising gold is also putting pressure on the silver shorts. I've heard that there is now more silver shorted on the COMEX than is available in physical silver.
A few weeks ago, shorting silver was considered a "no-brainer." In this business, if you run with the crowd, you're liable to get trampled to death...
But more powerful than anything else will be the trend of the stock market. If the bull market dies here or even if it corrects severely, the pressure will fall heavily on the administration and the Congress.
For this reason, I expect the rest of the year 2011 to be 'wild and wooly.' I expect government lies and propaganda to reach a crescendo. I'm bracing myself for a parade of surprises. Politicians love power and perks. But to keep those two, they must also keep their jobs. Therefore, coming up, I expect an extreme in dirty politics and internecine political battles.
The year 2011 should wind up as a banner year for political and economic propaganda, all lies and bull-shit.”
Silver Shorts Liable to Get Trampled - Richard Russell
There was a remarkable divergence in the markets today as gold rallied sharply, dragging silver behind it with a lag, while stocks headed lower.
The impetus was clearly the Greek debt decision by Fitch, as the markets moved right with the announcement, breaking up the usual option expiration shenanigans.
Let's see how this progresses next week. This breaking of the mold will likely not continue without interruption, since old tricks die hard.
But it may be a portent of things to come. Great events and changes are in motion.
Another options expiration with shenanigans, and a downgrade to Greece sovereign debt that roiled the market mid-day and triggered a bit of a flight to safety.
The markets generally ignored the financial crisis as it unfolded, and stocks were largely unchanged on the weekend before the collapse of Lehman Brothers took the markets down hard. I do not expect the next financial crisis to be anticipated any better by this market. Price discovery and efficient capital allocation is not possible in a system permeated with fraud.
Let's see how the Asian markets open on Sunday.
Here is what I am watching in US broad equities in the May option expiration. There is support for the SP around 1321-1324. If it breaks that and sticks the close there might be something to this, moreso than the usual option wash and rinse.
On the NDX chart the intermediate uptrend is more pronounced with strong support at 2330.
Update at 11:10 - FITCH DOWNGRADES GREECE TO 'B+'; RATING WATCH NEGATIVE
Fitch has downgraded Greek debt, which has caused a flight to safety in the dollar and precious metals.
The Chart That Should Accompany Every Discussion of Deficits - The Atlantic
Obama shares a significant portion of the blame, contrary to what the Atlantic may be implying. But the sources of the financial collapse and deficits are identifiable, but little discussed by the corporate media.
The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.
No breakouts, stocks remain in a short term downtrend.
LinkedIn IPO came into the market today, and it was bubblicious.
GAP slashed its outlook after the bell on rising costs.
Dominique Strauss-Kahn was granted bail, with a form of house arrest while he awaits trial.
