SP 500 and NDX Futures Daily Charts - The Paint Stays Mainly On the Tape

The several days of selling did dry up yesterday as we had suspected and today we had the end of quarter paint job.

We will probably see this continue into the weekend barring something unforeseen.

Let's see what happens.

Updated Gold Shadow Chart - Gold Hitting New Highs In Euros

Gold is now jammed up against resistance as many of the weak hands have been shaken out and the shorts are getting squeezed by fresh jitters in Europe. 

But is it enough to support a breakout? We will have to wait and see.

Gold is hitting new highs in terms of the Euro. 

I will be a little surprised if we get the breakout cleanly now without a serious 'gut check' after the gold option expiration, in which the in-the-money call holders now find themselves with shiny new futures positions.  But this might just be my inherent distrust of the trading environment on the CME.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts - Silver Turns It Around - Gold Options Expiration - Ted Butler

As noted in the intraday commentary this is a week with a few key events on the Comex for gold, and so we continued to see the metals under pressure, although silver turned it around quite impressively and reached back up for the 34 handle.

Let's see how we go into gold option expiration and first notice.

Sept. 26 Comex October miNY gold futures last trading day
Sept. 26 Comex September silver futures last trading day
Sept. 27 Comex October gold options expiry
Sept. 28 Comex September gold futures last trading day
Sept. 28 Comex October E-mini gold futures last trading day
Sept. 28 Comex October gold futures first notice day

Ted Butler on J.P.Morgan and silver:

"My allegations in silver are incredibly specific. I believe that JPMorgan, by virtue of a massive concentrated short position in COMEX silver futures, is manipulating the price of silver lower than it would be otherwise. If JPMorgan’s concentrated short position did not exist, the price of silver would be substantially higher. It does not matter if the bank is hedging or engaged in market-making; the mere existence of such an unprecedented large and concentrated short position proves manipulation. That’s a key feature of commodity law and is why the CFTC monitors concentration closely.

For some reason, however, the Commission treats silver differently than other commodities. In addition to ignoring the concentrated short position, it glosses over the results of the concentration on price. Silver witnessed, among other large and uneconomic sell-offs, two distinct sell-offs in 2011, in which the price fell 30% and 35% within a few days. Not one word was heard from the Commission on the two most pronounced sell-offs in modern commodity history. Yet, this week Commissioner O’Malia promised that the Commission was looking into the 4% price decline in oil. A decline in oil of 4% gets same day comment; 35% down in silver is not worthy of any comment. This amounts to a level of discrimination that is not tolerated in society or in regulatory matters.

In addition to being specific, my allegations around JPMorgan manipulating the silver market are consistent and continuous. Four years ago, instead of responding directly to public complaints about JPMorgan’s concentrated short position, the Commission chose to investigate as a way of kicking the can down the road. After four years, the issue remains because JPMorgan’s concentrated short position remains. No one in authority wants to make the issues around this short concentration more transparent; not the CFTC, not the CME, not JPMorgan itself. Transparency is good in principle and for the other guy; but when it comes to silver, not so much..."

Ted Butler, 25 September 2012

As you know I think the CFTC may be caught in a credibility trap with respect to the silver and gold markets. And if so, at some point this is going to break, as a scandal of major proportions.

All the CFTC has to do is to release its findings, and satisfy analysts like Ted Butler with proof that the big short in silver is a genuine hedge. That is their responsibility as the representatives of the public in overseeing the markets.

That they will not do so, that they will not even speak to the issue but continue to be evasive, makes one wonder just what sort of people these are, and what they have to hide.

I read with some cheerfulness today that Europe is using the US markets as a model of what NOT to do, in crafting their new regulations about high frequency trading. The types of 'Dr. Evil' market manipulation practiced in the states is already illegal in Europe, and more importantly, enforced on occasion.

And for New York and London and their contempt for the people, shame.