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"The desire of gold is not for gold. It is for the means of freedom and knowledge."
Ben Davies
Gold and silver diverged from US equities today as fresh jitters over the Euro bailout put a damper on stocks.
Keep the $45+ rally in context of the current trading range however as is shown below. It has not yet broken out.
If you are trading with Level II market view in something like the miners or a less liquid ETF, you may place a bid or ask of a thousand shares or more, and it quickly finds a lot of 'friends' of a lesser amount jumping in front of it. And when you place a sell into a group of bids, a tiny amount may be filled, but then the bids disappear and drop lower.
These are thin, volatile markets, permeated by fraud, deception, and front-running of everything from global headlines down to individual bids. The talking heads and Wall Street demimonde are spinning stories and alternatively feeding hysteria and euphoria, greed and fear, under cover of the lax regulation and co-opted public policy.
The US financial system has gone predatory. The political system has given itself over to the corporate interests. Nothing could be more clear in the regressive tax proposals coming out of the Republican debates, and the Democrats are feeding greedily at the same trough of foul campaign funds and special privileges.
If you are a daytrader and can make money playing the momentum in this then good for you. But I think that most people who attempt to trade these markets will make very little on net, and are more likely to lose money. Better to stay with the longer term trends based on fundamentals. This will get worse before it gets better.
Markets were cheered by a better than expected economic activity report from China and good earnings from CAT. Europe was forgotten for the day.
Gold and Silver had decent gains as the dollar slumped.
The trend is not clear here and the breakouts are still pending.
Big up day but on light volumes.
CAT earnings provided the domestic push, and better than expected data from China cooled fears of global recession.
The punters were whistling pass the graveyard on Euro debt today.
Let's see if they can break stocks out from here and make it stick ahead of the European meeting on Wednesday.
NFLX guided lower and was punished after the bell.
It was 'Risk On' today as stocks rallied and went out on their highs and gold followed.
The US Dollar dropped to a post WW II low against the Yen on talk of QE3. I suspect strongly that someone in Treasury shared some prospective monetary actions with their Asian counterparts today. Apparently they are not so sanguine about the benign affects of modern monetary theory, even of the more benign and traditional Keynesian sort.
The Fed Is Laying the Groundwork for Further Easing - Thoma
Stimulus will not work in a system that remains unbalanced and broken, with the real economy skewed to support a non-productive financial class. And austerity will merely bring the final crash and counter reaction more quickly. It will not 'get it over with.' It is more like driving faster so you can impact with this bridge abutment rather than one further down the road. A flaming wreck is rarely a good outcome. We might consider fixing the car instead. But that would require a change of drivers.
See you Sunday night.
