SP 500 and NDX March Futures Daily Charts

“I have never known much good done by those who affected to trade for the public good.” Adam Smith

Support held, and there was a bounce in tech.

The close into the weekend tomorrow will be the real test.

Silver Market Hit Hard With Bear Raid - The Infamous Dr. Evil Strategy

Yesterday I said:

"Today was the option expiration on the Comex, and those options which are 'in the money' and have not been settled for cash are now converted to March futures positions.

Depending on the size and distribution of those conversions we may see some 'action' in the front month because they are sometimes notoriously weak hands and will receive at least one 'gut check.'"

And a gut check to run the stops was very obviously delivered in the afternoon trading session at the Comex and across the monthly contracts.

This is remniscent of the 'Dr. Evil' strategy that got Citi warned and fined in Europe a few years ago. Memories of Citi's Eurobond Manipulation At the time one of the defenses offered by an ex-pat trader was 'in the US everybody does it.' Has JPM taken up the trading strategy that Citi once made infamous? And why would banks be trading for themselves in markets with players they help to finance, and with public money?

Large players can come into a relatively small market and drive the price by selling in size, running the stop loss orders which they often can 'see' through probing orders and positional advantage, and essentially bomb the market, manipulating the price in the short term to their advantage. The profit is made through derivative and correlated bets that depend on the price of the metal, index, or bond such as shorts on mining stocks, currencies, bonds, etc.

This is why the 'uptick rule' in stocks served a purpose, and why regulators are in place to keep an eye on big players with deep pockets and a far reach. In a properly regulated market the CFTC would immediatly pull the trading records for today and track the big sellers, and inquire as to the reasons for their sudden selling in a quiet market.

It *could* have been a hedge fund margin call. It could even have been a margin call provoked by a bank tightening credit lines with one hand while playing the market with their other hand. There were rumours being spread all week keying in on the day after expiration.  I do not have any inside information, no special knowledge, only the advantage of experience and a watchful eye on the markets.

And so there it all is. I was ready for it. I may or may not make money from it, but at least I had flattened my positions as I had said earlier this week and did not lose from it. But it sickens me to the heart nonetheless, to see a once great government fallen so low.

Gold Daily and Silver Weekly Charts - Blythe Might As Well Be Walkin' On the Sun

Today was the option expiration on the Comex, and those options which are 'in the money' and have not been settled for cash are now converted to March futures positions.

Depending on the size and distribution of those conversions we may see some 'action' in the front month because they are sometimes notoriously weak hands and will receive at least one 'gut check.'

The trends remain as they are, without regard to the short term 'wiggles.'

I made the call for gold, and slightly thereafter silver, based on a fundamental analysis of the US economy and the actions of the Federal Reserve. This was when the prices were 275 and 4.50 respectively. I see no reason to change anything yet.

When the fundamentals change and information becomes more universally disclosed, then the market will clear and reach stability. Until then the safe havens from the dollar credit bubble will continue to go higher in spite of the gimmickry and perception management of the monied interests and their financial engineers. They have been caught with their hands in the cookie jar, and are trying to bluff and rationalize their way out of it to their personal benefit, as they have done throughout their lives.

SP 500 and NDX March Futures Daily Charts

Here comes the most important test for US equities, for the rest of the week and especially over the weekend.

They have fallen to levels that have typically sparked a new round of buying in this protracted liquidity rally for another melt up higher on thin volumes.

The end of this will come, but perhaps not yet. The market must tell us what is hidden and must be revealed.