Gold Daily and Silver Weekly Charts - Comex Option Expiration on Wednesday

Stocks took a beating today, particularly in the HFT trading of the first hour that saw the DJIA down over 1,000 points.

I think the 'fragile' underpinnings of these paper asset markets became all too clear this morning.  And they have not changed, not one bit.

Gold initially caught a stiff flight to safety, but was hit with selling even as the stock market saw a remarkable bounce off its bottom. How unusual.

The US Dollar was certainly no safe haven today as it slumped to a seven month low.

Silver is going to be a pivotal player I think, moreso in the next month than now in this inactive month of August.

Gold is now outperforming the SP 500 for the Year-To-Date. See the chart below. How about that for pet rocks. Both are lower priced in dollars. Gold has been rallying in most other currencies.

The Fed's Lockhart came out this afternoon in a speech on the West coast and reiterated his opinion that the Fed would raise rates this year, although he waffled a bit on his prior certainty. I would say that September will be off the table unless stocks can rally higher and make people forget was the underside of an asset bubble looks like.

There was very little action in The Bucket Shop on Friday, with no deliveries and little warehouse movement as shown below. Its a funny month that started off with big buys in gold, almost clearing out the available inventory, and then a big lapse into nothing.

Let's see how China and Europe trade overnight.

Have a pleasant evening.

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.