Gold Daily and Silver Weekly Charts - Coiling Into Option Expiration

Yes it is that time again as next Tuesday is another option expiration for the precious metals on the Comex. See the calendar chart below.

The Comex warehouses continued to shuffle their chips and cards, with no meaningful movement of gold bullion in or out yesterday.

Gold is obviously coiling in a symmetrical triangle at key resistance, within a large inverse H&S formation, and an even larger 'W formation.'

I do not expect the Comex situation to resolve itself this month, with continuing low inventories of deliverable gold and antics with price and delivery being played until there is some shock from outside the pits, some failure to deliver that cannot be covered up or brushed aside. 

It *could* break right at the Comex, but I suspect that the price setting mechanisms there are sufficiently divorced from the real market so that Comex will be collateral damage to some much larger event. 

It takes patience in times like these, since things unfold slowly when you watch them every day.  But when the time is come, it seems as though it happens all in a rush, and the inevitability of it all appears to have been written large on the wall. 

That is how it was with the last financial crisis, and that is how it will be with the next one which is probably no more than two years away.  While the policies and fundamentals remain the same, it will be foolish to expect other outcomes.

Have a pleasant weekend. See you Sunday evening.

 

SP 500 and NDX Futures Daily Charts - Bumping Against Resistance

Stocks tried to rally today, but fell back again in the afternoon. This 1840ish resistance on the SP 500 futures is proving formidable, with at least twelve tests so far this year that have failed to breach it, four times most recently.

I think we will need to see some signs of sustainability in the real economy before stocks can move confidently higher, with the Fed starting to pull back on the rate at which it throws easy money to the financiers.

And despite a few misleading statistics here and there, it is just not happening yet. This is a classic liquidity trap, where the failure of aggregate demand is causing the production side to hold back, and yet the policy makers continue to dampen the income side that fuels that demand.

Do not get me wrong, providing living wages to more people would certainly stimulate aggregate demand, but so also would a more mercantilist stance towards exports and imports, or an exogenous demand such as war. Perpetual war of the sort we see the US and UK engaging in does not quite do it, as it is a slow smolder and narrowly concentrated in high ticket technology.

How can any other outcome be expected, given the continuing anti-human nonsense that is monetary and public policy?

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - The Reivers

"And so we were three, three reivers high-tailing it for Memphis. Oh, 'reivers'. That's an old-fashioned word from my childhood. In plain English, I'm afraid it meant 'thieves'."

William Faulkner, The Reivers

Gold and silver caught a bit of a bid today, moving higher with stocks.

There was no movement in or out of the Comex warehouse yesterday, but some reclassifications of bullion as the gamblers continue to arrange their hands before the river card is thrown.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Ghosts of Bubbles Past

The spokesmodels on financial TV were thrusting their pom-poms this morning over the Facebook acquisition of 'WhatsApp' for $19 billion dollars.  This reminds me of techbubble-nomics.  Facebook is paying with an inflated currency for a big chunk of it, eg. their stock. 

And the Markit PMI came in high side, and so stocks were moving higher.

Did the analysts you were watching even mention the horrendous miss on the Philly Fed in the afternoon?  Must have been a snow day. Unemployment claims remain stubbornly high. 

I have outlined the key resistance and support levels on the SP 500 chart below. 

There was intraday commentary about the rising stock market and the Fed's rising Balance Sheet here.

Have a pleasant evening.