SP 500 and NDX Futures Daily Charts - Bully Sticks the Breakout

The bulls were able to hold their ground for the week and stuck the close above resistance.

Now the hard work begins, as the initial sugar high of QE3 fades a bit, and harsh reality sets in.

How will the Fed translate lower mortgage prices and the monetization of junk into real growth in the non-financial economy?

And how will the President and a hard core in the Congress make any progress towards reforming and restructuring the economy from a predatory trash heap to a well ordered garden of blooms of growth?

Hope, but not optimism.

Gold Daily and Silver Weekly Charts - Benny Has a Printing Press - QE3 Begins

Jeff Christian's clients were being carried out on stretchers today as the Fed made it rather clear to any who were still in doubt that they do have a printing press and, by hell's heart, they are going to use it.

The Fed clearly signalled their intent to spend, and gave some indications of their willingness to 'do whatever it takes' in their own Draghi moment.  What will restrain them? The difference is that the US has no Merkel, just Urkel(D).  Or Herman Munster(R).

Remember that in this sort of reserve fiat currency the only limiting factor to their printing is the value of the bonds and the dollar, which is after all a bond of zero coupon and unrestricted duration. Well, unrestricted until there is a default, but that is another matter. And they all do it, sooner or later.

Gustav Klimt, Portrait of Adele Bloch-Bauer

Gold and silver both ran higher along with stocks. The stock market action was interesting if you looked at volume and which sectors were leading, and which ones lagged. Volatility is on Quaaludes.

So what next. Gold has made its 'cup' which I showed intraday. What happens next will determine what we will make of it. We need to see it stick the rim, and then form a decent handle. I will review the technical rules soon if that happens. Remember the retracements.

Blythe Masters had an interesting addition to her CV at JP Morgan which was noted in intraday commentary. As you may recall, Blythe is of special interest to us because she is the Captain of the USS Silver Short Position, currently racing through the North Atlantic at top speed with its running lights off.

I am reading a Berlin Noir novel Prague Fatale by Philip Kerr, a remarkable writer who ornaments his well structured and researched story with an amazing, almost exuberant display of wide learning and broad cultural erudition.  I am curious to know how he accumulated such an array of knowledge. He weaves it together well.

It was very entertaining and is his latest work.   I intend to read more of his other books to see if this was the full flowering or more par for the course.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bernanke in Drag(hi)?

The markets went coo-coo for Cocoa Puffs today as the Fed threw a gallon of vodka into the punchbowl.

The financials were leading the charge. When Citi outdistances AAPL you know its not Kansas that they put on that blotter paper that day.

Is this Ben's Draghi moment? So far the Fed has not made much of a dent in the real economy, just the banks and bonds. And helped some gold bugs feel better about themselves I think.

Part of this is certainly the government's fault, but quite a bit is the Fed's, for their coddling of the Banks with their excess reserves and gambling ways. They are the regulator and a strong voice for policy after all.

A reckoning is coming.