The Recovery™ - Bubble Back To the Bar For the Hair of the Dog That Bit You

"Double, double toil and trouble,
Fire burn and cauldron bubble.

Cool it with a baboon’s blood,
Then the charm is firm and good...

By the pricking of my thumbs,
Something wicked this way comes."

William Shakespeare, Macbeth, Act 4 Sc. 1

And why would we expect anything different, given the lack of serious reform and the careful targeting of the monetary expansion into the hands of the same old TBTF financial firms that have been distorting markets and misallocating capital for their own advantage since the repeal of Glass-Steagall?

The best way to cure the damage from a widespread, real economic collapse in the aftermath of a financial asset bubble is surely a continuation of the failed policies of the past, and yet another asset bubble targeting the most wealthy in the hope that something will trickle down to the rest.

Gold Daily and Silver Weekly Charts

There was no movement in or out of the Comex gold warehouses yesterday. At some point they must show the removal of any bullion taken by the February longs which have stood for delivery and decided to hold something more substantial than a claim check.

Gold and silver were short term overbought yesterday, and so a pullback is not all that surprising. It was interesting to see the precious metals moving with stocks today, as gold at least had been working as a counterplay flight to safety.

The 200 DMA for gold is around 1309, and so we would like to see this level hold on this retest and retrenchment.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Pullback

The housing data this morning was weaker than expected.

The Fed minutes unnerved the markets which were already wobbly.

If you look at the charts, the indices have had an amazing run up off the bottom of the trend channel without a pullback, much less a serious one.

I took off an opportunistic short position at the close which I had put on the other day.

Let's see what happens. That will help to determine if this is a real correction or just a pause in an overly strong run higher.

Gold Daily and Silver Weekly Charts

"A shudder in the loins engenders there
The broken wall, the burning roof and tower
And Agamemnon dead."

W. B. Yeats, Leda and the Swan


"When clouds appear, wise men put on their cloaks;
When great leaves fall, the winter is at hand;
When the sun sets, who doth not look for night?...

Bloody thou art; bloody will be thy end."

William Shakespeare, Richard III


"As it will be in the future, it was at the birth of Man,
There are only four things certain since Social Progress began:
That the Dog returns to his Vomit, and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing, and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!"

Rudyard Kipling, The Gods of the Copybook Headings

They are still not showing the ounces being delivered out of the Comex warehouses to standing February contracts.

It is thin on deliverables, not as thin as it had been, but it will be getting thinner.

Let's see what happens.

Have a pleasant evening.