Gold Daily and Silver Weekly Charts - A 'Risk On' Day

Gold was pushed back hard from its attempt to break out above its 50 DMA which is around 1684.

Silver held its ground a little better.

Cap, cap, cap.

C'est la guerre monétaire.

I found this comment from a reader on the equity markets to be resonant with my own thoughts.

"High frequency trading software that focuses on feedback loops is a useful diversion to hide front-running, short squeezing, and other parasitic activities. The current BS about rotation out of bonds is merely an attempt to attract retail because they’ve run out of shorts to squeeze to take the markets higher.

If you can put aside your moral outrage, this strategy is a thing of beauty – disgusting, evil, and fraudulent but beautiful in its execution."

Frauds R' Us.   Its the major growth industry, and the dominant export of the US and UK.

SP 500 and NDX Futures Daily Charts - The Dell Computer Market

It was rally mode today as traders celebrated the great economy in Europe, which is allowing their banks to pay back the ECB as they get 'healthy.'

Huh? Well, that's what the spokesmodels said. Its a 'better-than-expected' world, at least for the one percent.

This is the Dell Market, with lots of money flowing around the plate, but little value being added, just a further concentration of money and power.

Is that Mr. Megaphone Talking on the SP 500 Futures Chart? Or Yet Another Headfake?

Is that a megaphone top forming up on the SP 500 March futures chart?  Or is the Fed just glad to keep fueling this glorious rally for freedom?

Formations like this are fun to watch as potential indicators, but they really do not work until they 'work.'

That is, they are not active until activated by a clean trend break in one direction or the other.  This is true of all chart formations that represent a possibility that can become more or less probable over time, depending on which way things develop.

Charts don't do anything.  They merely reflect the underlying reality in an easier to grasp representation, for those with that sort of visual inclination.  They are a roadmap, not the road.

Right now 'the market wants to go up,' meaning lots of market participants want it to go up, want to take it up and keep squeezing the bears who piled on ahead of the fiscal cliff and sequestration.

My interpretation of this 'megaphone' is that the market is undecided about the viability of the rally continuing given the impasse in Washington and the impending battle of the budget over sequestration which should happen in about four or five weeks.  And despite the recent happy talk, the European situation remains volatile, and the currency war continues.

If you want to play a formation like this, thenwait for it, and give up bragging rights and save yourself a loss from being 'too early' or just plain wrong.

There is a word for those who bet against the market on the if-come.  They are called 'broke,' and spend most of their time badgering people on chat boards.  They are often wrong, but rarely in doubt.

Why Bears Should Tread Carefully