Gold Daily and Silver Weekly Charts - When Exchanges Crash Do They Dream of Electronic Sheep

When the Exchanges crash and burn, do they dream of electronic sheep?

Well, I cannot say if they dream or not, but you may as well be dreaming of electronic money,  if that is where you keep your wealth, and it is lost somewhere in an electronic storm. You are reliant on the integrity of the exchanges and their owners for restitution. Often it works out well, and things go on as normal.  But as the dominoes of counterparty risk start falling, it is 'might makes right' as we saw in the mysterious case of MF Global.

I hear that Obama was 'informed' of the problems on the NASDAQ today. I assume that is a symbolic gesture designed to inspire confidence.   And it is as practically futile as giving the Princes of Wall Street a big pile of the public's money to keep their doors open in a collapse of their own causing, and expecting them to 'do the right thing' for the sake of the country.

Gold and silver held their ground today, and are very obviously coiling. You can see it more clearly on the gold daily chart. The odds are it will break to the upside, but there seems to be a determined effort not to allow the metals to break and run, but to keep them well leashed.

I have included two charts of gold in grams priced in Indian Rupees to show the remarkable recovery gold has made from the lows despite the extraordinary efforts being made by the Reserve Bank of India and that government to stop the flow of gold into the hands of ordinary Indian people who are seeking their traditional safe haven for their wealth.

At some point the leash that is holding gold back is likely to break, and then the price will find its own level, though the heavens may fall.  Or at least a few of those demigods that think they are doing God's work.

As a reminder, next Tuesday 27 August is option expiration for gold and silver on the COMEX.  And Friday 30 August is the last delivery day for August. 

There could  be some interesting cross currents next week.

SP 500 and NDX Futures Daily Charts - Gaming the Gaming

Stocks were slumping overnight in the aftermath of the Hewlett-Packard miss after the bell yesterday.

The SP 500 futures made a dead hit on the 50 percent retracement level today, and then took off like a scalded cat in light volumes. I posted on this intraday here.

About 12:23 the Nasdaq exchange went down for the count, and quite a few stocks were no longer able to be traded, although the futures remained opened for business. Trading resumed at 3:25 PM although quotes were available before that.

I hear that trading could have occurred on the NYSE although no quotes would have been available. There is no real backup arrangement, and I suspect there will be more talk of this.

No one is talking about what was going on in the 'dark pools' during this hiatus.

I imagine that some day soon the mavens from the Nasdaq will reveal what went wrong, and the SEC will make the appropriate harrumphing noises, and point to Regulation SCI which they have open for comments on this matter, which was recently extended for even more comments. The regulation deals with system compliance and integrity.

I hate to say it but the level of discussion on Bloomberg TV this afternoon was taking the part of Wall Street and Jamie Dimon so vigorously that they made Andrew Ross Sorkin look like the Savonarola of big finance.

Have a pleasant evening.

NASDAQ Trading Halted, Now Scheduled to Resume at 3:25 PM

As I am sure you have heard NASDAQ trading for stocks and options was halted earlier today around 12:23 PM because of a computer trading glitch. It is now scheduled to reopen for trading at 3:25 PM although quite a few stocks are now showing quotes.

The NDX (Nasdaq 100) futures never stopped trading.

Two NASDAQ listed stocks, Autodesk and Scansource, will report their financial results after the bell as scheduled.

NEW YORK (AP) — Another computer glitch is sowing confusion on Wall Street.

Trading in the Nasdaq, a major stock exchange dominated by the biggest names in technology, was halted shortly after midday Thursday due to an unknown technical glitch. Nearly two hours later, trading was still frozen. Other exchanges were trading normally.

The disruption sent brokers scurrying to figure out what went wrong and raised new questions about the pitfalls of computer-driven stock trading.

Thursday's Nasdaq freeze echoed earlier stock market snafus, such the sudden plunge in stocks in May 2010 that came to be known as the "flash crash" and the glitch-plagued initial public offering of Facebook last year.

The exchange sent out an alert to traders saying that trading was being halted until further notice because of problems with a quote dissemination system. Nasdaq said it wouldn't be canceling any open orders, but that customers could cancel orders if they wanted to...

SEC Whistleblower Gary Aguirre on the SEC's New Wall Street Crackdown

I remember this particular gentleman very well, and when he was fired for daring to attempt to investigate a powerful Wall Street figure for insider trading.

Here is some background on his case, and his reflections on the current state of the SEC.

Some of his comments strongly echo the thoughts presented in Bill Moyer's new interview with Mark Leibovich, author of This Town.