The Technically Driven Market: Wash and Rinse Cycles In a Trend

Hot money blunts the impact of all but the most extreme events in the real world.

Computer algorithms dominate the trading environments in volume, speed, and short term gamesmanship.  A 'random walk' my ass.

The market becomes an endless churn and burn with an upwards bias supported by the Fed's expansion of the money supply.

The market is notable for the bifurcation into professionals and marks, with the occasional warring factions between the monied interests. 

Wash, churn, rinse, repeat.

This is what I mean by 'the technically driven trade.'  It is a constant game of liar's poker in a largely lawless environment.

The moral hazard is the misallocation of capital, the misappropriation of policy money, the corrosion of the public trust and national character, and the dissipation of wealth in the occasional market breaks and collapses.

China Gold Imports Through Hong Kong

Trend?  Change?  Not possible.

No one is interested in gold.

Nothing to see here. Move along.

Chart by Data Wrangler Nick at Sharelynx.com.

Gold Daily and Silver Weekly Charts - Metals Take Back Their Levels, But Germany Can't Get Their Gold

There was no movement reported in the Comex gold warehouses yesterday.

A few more contracts stood for delivery yesterday bringing the total to 427,000 for the month.

Let's see how those contracts are resolved and what shows up in the warehouse reports.

The junior miners had a bit of a pop today.

We have a potential right shoulder forming up on the gold chart and on the silver chart as well.  In this case follow through is everything as it is not yet a confirmed formation.

The shameless shills and trashtalk trolls keep putting the worst possible interpretation they can find on even positive developments in the metals, while supposedly interjecting 'objectivity' into our expectations.  They are hardly objective and have missed every metals rally since 2000.

And on the other hand the legendary legends of legendarianism keep touting their sky high target valuations for gold and silver. 

I would settle at this point for a solid breakout from this clamp that has been placed on the precious metals for the past fourteen months, ever since the Fed had to de facto default on the return of the German gold as requested, in case you have forgotten. That must have been a real come-to-Jesus moment for the pinstripes and soft lies over elegant luncheons crowd.  

One step at a time.  Let's allow the market to have its say.  Talk is cheap, and at the end of the day performance is everything.  The fundamentals are highly positive, and remain so.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bounce Off the Trendline

“Whatever you do, kid, never invest a penny in the stock market, because it’s run by crooks and sons of bitches.”

Ralph Madoff, father of Bernie Madoff

Alcoa kicks off earnings season after the bell.

Stocks bounced with some precision off the trendline with the momentum techs taking a bit of a lead.

Have a pleasant evening.