Gold Daily and Silver Weekly Charts - Pop Go the Weasels

Gold and silver got legs when Bernanke confirmed that the FOMC was just talking about ending QE. And I think we knew that.

But apparently the metals market didn't right? I think this rally has everything to do with the end to this brazenly artificial paper selling into the options expiration yesterday.

So what next?

Gold is approaching a 50 percent retracement of this big waterfall decline that was driven by the funds. While I feel comfortable in buying long term straight up bullion in moments of such extreme oversold weakness, I am not quite confident yet in taking more longs into a trade just yet.

The sequester is dead ahead, and with the markets this wild and loosely regulatred, it is hard to have conviction using any kind of leverage.

The long term prospects for precious metals remain unchanged, perhaps slightly better given the lack of serious reform in the real economy and the broken financial system.  

 

SP 500 and NDX Futures Daily Charts - Bernanke Bounce

Housing was rosy this morning, and perhaps deceptively so.

Bernanke calmed the markets and gave the bulls some cajones to by the dip.

Some dip.

The sequester looms large. A lot of bets are on that they will kick the can down the road again.

I'm not willing to take that bet at this time. I am too uncertain here about the short term in this phony market, after this big spike in the VIX. So I have taken a lot of money off the table.

 

Moyers and Wolff: Capitalism Has 'Hit the Fan'

"Even as President Obama’s talking points champion the middle class and condemn how our economy caters to the very rich, modern American capitalism is a story of continued inequality and hardship.

Even a modest increase in the minimum wage — as suggested by the president — faces opposition from those who seem to show allegiance first and foremost to America’s wealthy and powerful."

Bill Moyers, Taming Capitalism Run Wild

A symphony of greed.

I would lay the failure of capitalism, or more properly the lapse of market capitalism into crony capitalism and corporatism, at altar of the triumvirate of the false gods of modern economics: globalization, fiat currencies, and naturally efficient markets.

And of course the fact that it is no longer socially unacceptable to be a lying, cheating conman, as long as you are sucessful at it. Greed is good, and so the achievement of wealth by any means available, as long as you beat the system and don't get indicted, is the epitome of human achievement and worth.

The most insidious trend is the adoption of the 'just-world hypothesis' and a Darwinian rationalization in blaming the victims for the outcome of this flawed set of policies and sanctifying of success.

This will very possibly result in yet another century of turmoil, degradation, and blood.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Premium are back to a more 'normal' profile than they have been during the concerted selling by the funds, but are still modest by historical measures.

It was nice to see gold take out 1600 and silver 29.00. The rest of the week will tell the tale.

These round prices were around the 'max pain' figures for options expiration, so it is no surprise that this is where we ended up for expiration.