Stocks and Precious Metals Charts - End of Quarter Boogie Woogie - Non-Farm Payrolls and Golden Week

"Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and resources, and to the preservation of the long term wealth of investors and the economy as a whole.  If price discovery is compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable.

Over the past 25 years the forces of regulatory liberalisation and demutualisation of markets have allowed the largest global banks to set the rules, processes and infrastructure of global markets to their own self-interested requirements."

London Banker, Lies, Damn Lies, and LIBOR


"Plus ça change, plus c'est la même chose."

Jean-Baptiste Alphonse Karr, Les Guêpes

Today was the end of the third quarter. As usual the paint was going on the tape again to make those end of quarter results look better, or at least less bad.

The big shorts in the gold and silver markets, primarily on the Comex, managed to continue the knockdown of the metals that began with the October option expiration last week. see the Dr Evil strategy for details about this.

'Golden Week', a seven day national holiday in China, begins on October 1. There markets are closed. This provides a good cover for the paper trading to be conducted without undue physical buying pressure. Although the rise and steady level of gold inventories in the Comex Hong Kong has been notable.

There was a huge amount of gold contracts changing hands on the Comex last Friday.   The big seller was customers at JPM and the house account at HSBC. I have included that clearing report below.

The big gold contract buyers were the house accounts at JPM, Goldman, Citi, and MacQuarie.  Presumably some of this was short covering.

I would imagine that the price smackdown today and the past few trading sessions will have knocked down the number of longs being held in both gold and silver.

The Dollar was up marginally, as were stocks, and the VIX drifted lower.

There will be a Non-Farm payrolls report on Friday.

I was closed out of the remaining trading position I had long gold in the opening minutes today, on a tight stop.  A good chunk of it went out on Friday.  I will be looking for a re-entry point.  Carefully.

My thoughts on the markets with regard to support and resistance levels are marked on the charts below.

Have a pleasant evening.

Stocks and Precious Metals Charts - Ninety Years Ago - Stocks Tumble on Trade War - Golden Week

"There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound. This is a circumstance of first-rate importance. In 1929 the rich were indubitable rich. The figures are not entirely satisfactory, but it seems certain that the five per cent of the population with the highest incomes in that year received approximately one-third of all income. The proportion of personal income received in the form of interest, dividends, and rent – the income, broadly speaking, of the well-to-do – was about twice as great as in the years following the Second World War.

This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury consumer spending or both. The rich cannot buy great quantities of bread. If they are to dispose of what they receive it must be on luxuries or by way of investment in new plants and new projects. Both investment and luxury spending are subject, inevitably, to more erratic influences and to wider fluctuations than the bread and rent outlays of the $25-week workman. This high bracket spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October 1929."

John Kenneth Galbraith, The Great Crash of 1929


"Wall Street got the credit for this prosperity and Wall Street was dominated by just a small group of wealthy men.  Rarely in the history of this nation had so much raw power been concentrated in the hands of a few businessmen.

Everything was not fine that spring with the American economy. It was showing ominous signs of trouble. Steel production was declining. The construction industry was sluggish.  Car sales dropped.  Customers were getting harder to find.  And because of easy credit, many people were deeply in debt.  Large sections of the population were poor and getting poorer.

Just as Wall Street had reflected a steady growth in the economy throughout most of the 20s, it would seem that now the market should reflect the economic slowdown. Instead, it soared to record heights.  Stock prices no longer had anything to do with company profits, the economy or anything else.  The speculative boom had acquired a momentum of its own.

On September 5th, economist Roger Babson gave a speech to a group of businessmen. 'Sooner or later, a crash is coming and it may be terrific.'   The market took a severe dip. They called it the "Babson Break."  The next day, prices stabilized, but several days later, they began to drift lower.  Though investors had no way of knowing it, the collapse had already begun."

The market fluctuated wildly up and down. On September 12th, prices dropped ten percent.  They dipped sharply again on the 20th.  Stock markets around the world were falling, too.  Then, on September 25th, the market suddenly rallied.

Practically every business leader in American and banker, right around the time of 1929, was saying how wonderful things were and the economy had only one way to go and that was up.

There came a Wednesday, October 23rd, when the market was a little shaky, weak. And whether this caused some spread of pessimism, one doesn't know. It certainly led a lot of people to think they should get out.

And so, Thursday, October the 24th -- the first Black Thursday -- the market, beginning in the morning, took a terrific tumble. The market opened in an absolutely free fall and some people couldn't even get any bids for their shares and it was wild panic. And an ugly crowd gathered outside the stock exchange and it was described as making weird and threatening noises. It was, indeed, one of the worst days that had ever been seen down there.

But Monday was not good. Apparently, people had thought about things over the weekend, over Sunday, and decided maybe they might be safer to get out. And then came the real crash, which was on Tuesday, when the market went down and down and down, without seeming limit...Morgan's bankers could no longer stem the tide. It was like trying to stop Niagara Falls. Everyone wanted to sell.

In brokers' offices across the country, the small investors -- the tailors, the grocers, the secretaries -- stared at the moving ticker in numb silence. Hope of an easy retirement, the new home, their children's education, everything was gone."

PBS American Experience, The Great Crash of 1929

Stocks slumped badly today on the news from Bloomberg that the White House is considering limiting US investment in China and Chinese companies.

Chinese companies listed on US exchanges were sold. It will be interesting to watch the open on world markets on Monday.

I have posted the upcoming economic events calendar for next week. There will be a Non-Farm Payrolls report on Friday.

Next week begins 'Golden Week' in China, October 1^st to 7^th.   This may allow more than usual antics with some stocks and commodities as their markets will not be open for this national holiday.

The Dollar was lower, and gold and silver were hit in follow up action to the recent Comex option expiration, driven by the big futures short position holders, the Banks. Those same jokers who helped to fund the long campaign to sell the idea of deregulation to free the markets, and to overturn protections for the public trust like Glass-Steagall.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant weekend.

Related: Crash Signatures

Stocks and Precious Metals Charts - The Increase in Lawlessness - The Imperial Presidency

“There are two ways to be fooled.  One is to believe what isn't true; the other is to refuse to believe what is true.”

Søren Kierkegaard


"The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated communist, but people for whom the distinction between fact and fiction, true and false, no longer exists.”

Hannah Arendt


"Narcissists are unstable and go through repeated cycles of self-destruction, with other people usually paying the heft of the price.  Narcissists tend to be divisive, vindictive, confrontational, aggressive, hate-filled, raging, incoherent, judgment-impaired, and irrational.

Narcissists are liars, confabulators, and miserable failures, although some of them are geniuses at disguising the fact that they are, in fact, losers."

Sam Vaknin


"And because of the increase in lawlessness, the love of most will grow cold."

Matthew 24:12

Stocks took a bit of a dive today, as the weight of mispriced risk and the illusion of economic recovery continues to weigh on the speculative excesses of the markets grown corrupt and inefficient through lack of proper oversight.

Being based on the human profit motive and the principle of selfishness markets in themselves have  no basis for being a moral principle.  Profit can be obtained through fair means and innovation, but as we have seen can more easily and richly be gained through exploitation and lawlessness.

The campaign to overturn the laws that protect the markets, which served us well for so long, has been determined and well-funded.  And it has worked a great deal of damage on the public and the quality of the financial system.

As usual the stocks regained much of their losses in the quiet afternoon.

Gold and silver moved sideways and the Dollar was marginally higher.

I think the charts are fairly clear. The problem is that most other things are not.

The other day I said: "I am certainly no fan of Joe Biden, who has a long record as a corporatist tool. And certainly not of Trump, who I suspect may wish to be impeached, and be remembered by some as a martyr, and spare himself the humiliation of losing badly in the next election."

And I will certainly stand by that as a possibility.  But like so many others I may be giving Trump far too much credit as a thinker, and cunning strategist.   His strength is his weakness, and he has some distinct flaws that work to his political disadvantage.

Trump is the consummate narcissist, a king among the class of egotists, bullies, and weasels.   He does not make occasional mistakes in judgement like most people.  He is driven into error by recklessness and pathological excess.

Don't expect things to get any better—  they will become progressively worse, until something finally either works, or breaks.  And if it breaks, there will be plenty of collateral damage, and much of it among the innocents as well as true believers.

And I hope that the liberal establishment, who expended a great deal of political capital and energy on their own madness that was RussiaGate, will regret their foolishness when they try to surmount their losses and perform an adequate investigation of this genuine abuse of power.  

In her day Hillary and her machine seemed to be indestructible and unstoppable— and it fell apart like a house of cards.  And when he falters, Trump's 'supporters' are going to descend on him like a pack of jackals.

Trump is not 'good for the markets.'   He is not the state, and as President is not above the law, although he thinks that he is.  Trump is a symptom of a system that has crept well into disorder and imbalance out of a long buildig sense of hubris and greed.

“Hubris calls for nemesis, and in one form or another it's going to get it, not as a punishment from outside but as the completion of a pattern already started.”

Mary Midgley

He is corrosive and corrupting, and quite possibly the rope of excess with which the predatory capitalists and their cronies are going to hang themselves.

Have a pleasant evening.

Stocks and Precious Metals Charts - Quelle Coïncidence - Metals Hammered On Comex Option Expiration

“Any idea pushed into the popular mind with considerable force will keep on going until some opposing force—or the slow resistance of friction—stops it at last.”

Charlotte Perkins Gilman


“Religion used to be the opium of the people. To those suffering humiliation, pain, illness, and serfdom, religion promised the reward of an after life. But now we are witnessing a transformation: a true opium of the people is the belief in nothingness after death, the huge solace, the huge comfort of thinking that for our betrayals, our greed, our cowardice, our murders, that we are not going to be judged.”

Czeslaw Milosz, The Discreet Charm of Nihilism


“Evil, when we are in its power, is not felt as evil but as a necessity, or even a duty.   Power is as pitiless to the man who possesses it, or thinks he does, as it is to its victims; the latter it crushes, the former it intoxicates. The truth is, no one really possesses it."

Simone Weil

It was looking a bit grim this morning as stocks were set to open up quite a bit lower.

And then Trumpolini threw out a major news distraction in the press discussion following the announcement of a limited trade pact with Japan.

"U.S. President Donald Trump said on Wednesday that a deal to end a nearly 15-month trade war with China could happen sooner than people think and that the Chinese were making big agricultural purchases from the United States, including of beef and pork.

“They want to make a deal very badly... It could happen sooner than you think,” Trump told reporters in New York. Trump said later after trade discussions with Japanese Prime Minister Shinzo Abe there was a good chance of reaching a trade deal with China.

He said China was trying to be nice to him and added to reporters: “I was nice to them.”

Reuters, Trump says trade deal with China could happen sooner than people think

And so the Dollar and stocks were off to the races.  What great news!  Who can argue with that?

Gold and silver were just hammered on the Comex October option expiration. What a coincidence.

I hope you were at least prepared a little for this nonsense.  I did mentoin it several times.

Better if you ignored the whole thing really, and just got right and sat tight and ignored all the madness and concurrent goofiness.

There is a bull market in cognitive dissonance.  And pathological lying. People often believe what they wish to believe, because it will give them advantage and riches and power.    After all, we have to be realistic, practical.  Right?

No one can serve both God and Mammon.  For he will come to love the one, and despise the other, and hate those who serve Him. And so the love of most will grow cold.

Let justice be done, though the heavens may fall.

Have a pleasant evening.