SP 500 and NDX Futures Daily Charts - Ghosts of Bubbles Past

The New Homes Sales number came in much higher than expected this morning, and so stocks reversed from their initial slump. They rose to challenge the overhead resistance once again, only to fall back down in the afternoon.

Rinse, wash, repeat.

Be careful, because this is a piñata market, shaped like the bubbles past, an elevated construction with the consistency of papier-mâché, at which a crowd of those with the forethought of children are taking their swings, trying to release its hidden riches.

But, alas, this one comes with a plague of Pandora's woes inside.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - Stockman On Crony Capitalism

As I suggested might happen yesterday, the precious metal longs were given a gutcheck today as the price was hit on the NY open.

The housing number this morning was a well-seasonalized canard, from the looks of it.

Below the chart, there is a reprise of Bill Moyers and David Stockman discussing the crony capitalism that is pervasive on the US economic scene, have encompassed both political parties, despite their marketing campaigns and brand differentiation.

Gold Daily and Silver Weekly Charts - Comex Option Expiration - Far From Any Road

There was very little movement in the Comex gold warehouses yesterday.

Gold was a little stronger than silver today, but both settled back close to evens at the close.

The option expiry was quiet, not unexpected for the less consequential March contract. We *might* get a gutcheck on the new longs if there was a significant amount of call options coming in the money.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Just Another Day in the Hood with the Hoods

There was a lot of back and forth around key resistance today. I suspect that the wiseguys are waiting for some additional punters to take positions before they flip the switch, unless something untoward happens in the great world of reality.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Option Expiry Tomorrow - Remembering Baghdad Bob

As a reminder, tomorrow is the option expiration for precious metals on the Comex, for the March contracts.

There was intraday commentary on the Mad Tea Party at the Comex.

Gold has broken out of the short term downtrend, but has yet to take out the big overhead resistance on the chart below marked in red.  

We have the smaller inverse head and shoulders working with a target that will activate the larger inverse head and shoulder, which forms the right portion of a huge 'W' double bottom.

So what does all that mean?    Follow through to the upside is everything at this point.  The wiseguys still have the whip hand on the Comex.

And the Comex is still playing a role in setting the price of the precious metals at least in the West.

The shorts are not quite on the run yet, and we may have to face some difficulties during the non-active delivery month of March.  

The Baghdad Bob's of the gold cartel are still out there talking their gloom and doom for the metals, and triumphantly asserting their demise.

But so far, so good.   Let's see what happens.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Swing and a Miss

The wiseguys were pumping equities hard today, reaching for that mythical 1348 new all time high on the cash SP 500.

They had it intraday but could not hang on, and profit taking set in during the afternoon, with the futures chalking up yet another failed attempt to breach that overhead resistance.

I am sure they will give it a few more tries. It is not hard to get it there given the dominance of high speed day trading in this market, and lack of substantial investing, which implies a buy and hold approach based on some sort of fundamentals.

Let's see what happens. Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - The Mad Tea Party

"The table was a large one, but the three were all crowded together at one corner of it: `No room! No room!' they cried out when they saw Alice coming.

`There's plenty of room!' said Alice indignantly, and she sat down in a large arm-chair at one end of the table.

`Have some wine,' the March Hare said in an encouraging tone.

Alice looked all round the table, but there was nothing on it but tea. `I don't see any wine,' she remarked.

`There isn't any,' said the March Hare.

`Then it wasn't very civil of you to offer it,' said Alice angrily."

Lewis Carroll, Alice's Adventures in Wonderland

The Comex reminds me of the Mad Tea Party, with the LBMA not all that far behind it. 

As for GLD and its like, when the tea pot gets tipped, let's see what comes out.

As a reminder, tomorrow is the March option expiration for precious metals at the Comex.

The SP 500 is running the stops to a new all time high.  One has to wonder what the Fed and the ruling class are thinking.  

Well,  if you don't know where you are going, any road can take you there.

Death By Metadata: Greenwald and Scahill with Amy Goodman

Bill Moyers: Deep State Hiding In Plain Sight

"Yes, there is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose.

My analysis of this phenomenon is not an exposé of a secret, conspiratorial cabal; the state within a state is hiding mostly in plain sight, and its operators mainly act in the light of day. Nor can this other government be accurately termed an 'establishment.'

All complex societies have an establishment, a social network committed to its own enrichment and perpetuation. In terms of its scope, financial resources and sheer global reach, the American hybrid state, the Deep State, is in a class by itself. That said, it is neither omniscient nor invincible. The institution is not so much sinister (although it has highly sinister aspects) as it is relentlessly well entrenched.

Far from being invincible, its failures, such as those in Iraq, Afghanistan and Libya, are routine enough that it is only the Deep State’s protectiveness towards its higher-ranking personnel that allows them to escape the consequences of their frequent ineptitude."

Mike Lofgren, Anatomy of the Deep State

"Rome lived upon its principal till ruin stared it in the face. Industry is the only true source of wealth, and there was no industry in Rome. By day the Ostia road was crowded with carts and muleteers, carrying to the great city the silks and spices of the East, the marble of Asia Minor, the timber of the Atlas, the grain of Africa and Egypt; and the carts brought out nothing but loads of dung. That was their return cargo."

Winwood Reade, The Martyrdom of Man

Gold Daily and Silver Weekly Charts - Coiling Into Option Expiration

Yes it is that time again as next Tuesday is another option expiration for the precious metals on the Comex. See the calendar chart below.

The Comex warehouses continued to shuffle their chips and cards, with no meaningful movement of gold bullion in or out yesterday.

Gold is obviously coiling in a symmetrical triangle at key resistance, within a large inverse H&S formation, and an even larger 'W formation.'

I do not expect the Comex situation to resolve itself this month, with continuing low inventories of deliverable gold and antics with price and delivery being played until there is some shock from outside the pits, some failure to deliver that cannot be covered up or brushed aside. 

It *could* break right at the Comex, but I suspect that the price setting mechanisms there are sufficiently divorced from the real market so that Comex will be collateral damage to some much larger event. 

It takes patience in times like these, since things unfold slowly when you watch them every day.  But when the time is come, it seems as though it happens all in a rush, and the inevitability of it all appears to have been written large on the wall. 

That is how it was with the last financial crisis, and that is how it will be with the next one which is probably no more than two years away.  While the policies and fundamentals remain the same, it will be foolish to expect other outcomes.

Have a pleasant weekend. See you Sunday evening.

 

SP 500 and NDX Futures Daily Charts - Bumping Against Resistance

Stocks tried to rally today, but fell back again in the afternoon. This 1840ish resistance on the SP 500 futures is proving formidable, with at least twelve tests so far this year that have failed to breach it, four times most recently.

I think we will need to see some signs of sustainability in the real economy before stocks can move confidently higher, with the Fed starting to pull back on the rate at which it throws easy money to the financiers.

And despite a few misleading statistics here and there, it is just not happening yet. This is a classic liquidity trap, where the failure of aggregate demand is causing the production side to hold back, and yet the policy makers continue to dampen the income side that fuels that demand.

Do not get me wrong, providing living wages to more people would certainly stimulate aggregate demand, but so also would a more mercantilist stance towards exports and imports, or an exogenous demand such as war. Perpetual war of the sort we see the US and UK engaging in does not quite do it, as it is a slow smolder and narrowly concentrated in high ticket technology.

How can any other outcome be expected, given the continuing anti-human nonsense that is monetary and public policy?

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - The Reivers

"And so we were three, three reivers high-tailing it for Memphis. Oh, 'reivers'. That's an old-fashioned word from my childhood. In plain English, I'm afraid it meant 'thieves'."

William Faulkner, The Reivers

Gold and silver caught a bit of a bid today, moving higher with stocks.

There was no movement in or out of the Comex warehouse yesterday, but some reclassifications of bullion as the gamblers continue to arrange their hands before the river card is thrown.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Ghosts of Bubbles Past

The spokesmodels on financial TV were thrusting their pom-poms this morning over the Facebook acquisition of 'WhatsApp' for $19 billion dollars.  This reminds me of techbubble-nomics.  Facebook is paying with an inflated currency for a big chunk of it, eg. their stock. 

And the Markit PMI came in high side, and so stocks were moving higher.

Did the analysts you were watching even mention the horrendous miss on the Philly Fed in the afternoon?  Must have been a snow day. Unemployment claims remain stubbornly high. 

I have outlined the key resistance and support levels on the SP 500 chart below. 

There was intraday commentary about the rising stock market and the Fed's rising Balance Sheet here.

Have a pleasant evening.

The Recovery™ - Bubble Back To the Bar For the Hair of the Dog That Bit You

"Double, double toil and trouble,
Fire burn and cauldron bubble.

Cool it with a baboon’s blood,
Then the charm is firm and good...

By the pricking of my thumbs,
Something wicked this way comes."

William Shakespeare, Macbeth, Act 4 Sc. 1

And why would we expect anything different, given the lack of serious reform and the careful targeting of the monetary expansion into the hands of the same old TBTF financial firms that have been distorting markets and misallocating capital for their own advantage since the repeal of Glass-Steagall?

The best way to cure the damage from a widespread, real economic collapse in the aftermath of a financial asset bubble is surely a continuation of the failed policies of the past, and yet another asset bubble targeting the most wealthy in the hope that something will trickle down to the rest.

Gold Daily and Silver Weekly Charts

There was no movement in or out of the Comex gold warehouses yesterday. At some point they must show the removal of any bullion taken by the February longs which have stood for delivery and decided to hold something more substantial than a claim check.

Gold and silver were short term overbought yesterday, and so a pullback is not all that surprising. It was interesting to see the precious metals moving with stocks today, as gold at least had been working as a counterplay flight to safety.

The 200 DMA for gold is around 1309, and so we would like to see this level hold on this retest and retrenchment.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Pullback

The housing data this morning was weaker than expected.

The Fed minutes unnerved the markets which were already wobbly.

If you look at the charts, the indices have had an amazing run up off the bottom of the trend channel without a pullback, much less a serious one.

I took off an opportunistic short position at the close which I had put on the other day.

Let's see what happens. That will help to determine if this is a real correction or just a pause in an overly strong run higher.

Gold Daily and Silver Weekly Charts

"A shudder in the loins engenders there
The broken wall, the burning roof and tower
And Agamemnon dead."

W. B. Yeats, Leda and the Swan


"When clouds appear, wise men put on their cloaks;
When great leaves fall, the winter is at hand;
When the sun sets, who doth not look for night?...

Bloody thou art; bloody will be thy end."

William Shakespeare, Richard III


"As it will be in the future, it was at the birth of Man,
There are only four things certain since Social Progress began:
That the Dog returns to his Vomit, and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing, and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!"

Rudyard Kipling, The Gods of the Copybook Headings

They are still not showing the ounces being delivered out of the Comex warehouses to standing February contracts.

It is thin on deliverables, not as thin as it had been, but it will be getting thinner.

Let's see what happens.

Have a pleasant evening.