Stocks and Precious Metals Charts - The Madness of Herds - New Highs Needed to Sustain Speculative Froth

 

"At what point shall we expect the approach of danger?  By what means shall we fortify against it?--  Shall we expect some transatlantic military giant, to step the Ocean, and crush us at a blow?  Never!-- All the armies of Europe, Asia and Africa combined, with all the treasure of the earth (our own excepted) in their military chest; with a Buonaparte for a commander, could not by force, take a drink from the Ohio, or make a track on the Blue Ridge, in a trial of a thousand years.

At what point then is the approach of danger to be expected?  I answer, if it ever reach us, it must spring up amongst us.  It cannot come from abroad.  If destruction be our lot, we must ourselves be its author and finisher.  As a nation of freemen, we must live through all time, or die by suicide." 

Abraham Lincoln,Lyceum Address, 27 January 1838

“Through pride we are ever deceiving ourselves. But deep down below the surface of the average conscience a still, small voice says to us, something is out of tune.”

Carl Gustav Jung 

 

 “Pride gets no pleasure out of having something, only out of having more of it than the next man. It is the comparison that makes you proud: the pleasure of being above the rest.

As long as you are proud you cannot know God.  A proud man is always looking down on things and people; and, of course, as long as you are looking down, you cannot see something that is above you.”

C.S. Lewis, Mere Christianity

Stocks went on a tear higher today in celebration of the lousing housing numbers this morning.

And because they can.

Gold and silver made a  rally attempt, and managed to hang on to some of it into the close, silver a little moreso than gold.

A huge tranche of gold showed up in Hong Kong.   

Funny how a big smackdown in the paper price and a scraping out of the ETFs manages to show up there, given a little time.

The Dollar finished lower.   All a part of the lousy economic news being good for the bankers, moneyed interests, and their bubbles.

Tough times ahead.   

In fit of emotion people are going to do very dumb and willful things that hurt more than themselves, although eventually they will be falling away in numbers that may be alarming.

"There have always been plagues and wars, yet they always take us by surprise.  Stupidity has a knack of getting in the way, which we would see if not wrapped up in ourselves.  In this our townsfolk were like everybody else— they did not believe in plagues." 

Albert Camus, The Plague

The bulls are smelling new highs in stocks, almost within their grasp.

If they fail to make those new highs, things may get interesting, quickly.

They may get a few tries at it, but don't miss.

The underpinnings of the equity markets is speculative froth.

Have a pleasant evening.

Stocks and Precious Metals Charts - Say It Ain't So, Jerome

 

"The control of information is something the elite always does, particularly in a despotic form of government. Information, knowledge, is power. If you can control information, you can control people."

Tom Clancy, Interview with Schafer, 15 December 1995

 

“I've always resented the smug statements of politicians, media commentators, corporate executives who talked of how, in America, if you worked hard you would become rich. The meaning of that was if you were poor it was because you hadn't worked hard enough. I knew this was a lie, about my father and millions of others, men and women who worked harder than anyone, harder than financiers and politicians, harder than anybody if you accept that when you work at an unpleasant job that makes it very hard work indeed.” 

Howard Zinn 

 

"Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million worth of stock from his personal account on October 1, 2020, according to disclosure forms reviewed by the Prospect. Powell’s sale of shares from a Vanguard Total Stock Market Index Fund has not been previously reported. 

This sale occurred right before the Dow Jones Industrial Average suffered a significant drop."

Robert Kuttner, The American Prospect, 18 October 2021

 

"There is no clean way to make a hundred million bucks. Somewhere along the line guys got pushed to the wall, nice little businesses got the ground cut out from under them. Decent people lost their jobs. Big money is big power, and big power gets used wrong." 

 Raymond Chandler, The Long Goodbye

 

“People with advantages are loathe to believe that they just happen to be people with advantages. They come readily to define themselves as inherently worthy of what they possess; they come to believe themselves 'naturally' elite; and, in fact, to imagine their possessions and their privileges as natural extensions of their own elite selves.” 

C. Wright Mills, The Power Elite

 

Stocks managed to stage a rally today, and went out near the highs.

Gold and silver fell a bit.

The Dollar was flat.

It seems like the VIX is bottoming. 

Jerome Powell's credibility as a 'self-policing' leader of the Federal Reserve just got shot all to hell.

It seems like most were doing it there, trading for themselves with huge information advantages, doesn't it. 

Just the tip of the dirty iceberg.

Have a pleasant evening.

Stocks and Precious Metals Charts - What a Surprise - Metals Smacked Hard For Option Expiration

 

"Our Lord has no body now but yours,
  no hands, no feet on earth but yours.
 Yours are the eyes through which He looks
  with compassion on this world,
  yours are the feet with which He walks to do good.
 Yours are the hands, with which He blesses all the world.

Let nothing disturb you.  Let nothing make you afraid.
All things are passing.  God alone never changes."

Teresa of Avila

 

Stocks managed to extend their rally in the big names. 

Goldman turned in 'stellar results' from their trading.

Maybe Kaplan's trading book which he kept with them helped.

The broader stock market in the Russell 2000 not so much. 

The Dollar was unchanged, just hovering below the 94 handle.

Gold and silver were hammered because -- well it was a stock option expiration.

The VIX was lower.   

Today was a 'risk on day,' deluxe. 

Let's see if stocks can bravely soldier on.

And if the wiseguys can keep the precious metals under wraps.

I almost took a position in the metals today but I wanted to see how things went on Monday.

The heart of the problem is the same as it has been throughout most of history:  too much power in too few hands. 

Need little, want less, love more.

For those who abide in love abide in God, and God in them.

Have a pleasant weekend.

 

 

Stocks and Precious Metals Charts - A Rising Tide of Whatever - Option Expiration Tomorrow

 

"Stock prices have reached what looks like a permanently high plateau.  I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted.  I expect to see the stock market a good deal higher within a few months."

Irving Fisher, Ph.D., Oct. 17, 1929 

 

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices." 

Goodbody and Company, The New York Times, October 25, 1929 

 

"This is the time to buy stocks.  This is the time to recall the words of the late J. P. Morgan that any man who is bearish on America will go broke.  Within a few days there is likely to be a bear panic rather than a bull panic.  Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years." 

 R. W. McNeal, NY Herald Tribune, October 30, 1929 

 

"America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years.  On this basis we now have three more years to go before the tailspin." 

Stuart Chase, NY Herald Tribune, November 1, 1929 

 

"If you're going to be in this game for the long pull, which is the way to do it, you better be able to handle a 50% decline without fussing too much about it." 

Charlie Munger "

 

"Life is a school of probability." 

Walter Bagehot 

 

That last quote is the money quote.  No one can predict an improbable event like a crash. 

Unless you have real time access to critical insider information perhaps.

There are far too many variables, and too many degrees of freedom for the powers that be in the regime of a fiat currency and an oligarchical political structure in campaign funding.

But there are periods of increasing risk, even for lower probability events.

And if the Fed keeps saving the one percent and their Banks, and letting Main Street fend for itself, then stagflation becomes a more likely outcome, even though it is an economic distortion of the first order.

But, with no disrespect to Mr. Charlie Munger, unless you are part of the one percent, expect to be told to 'suck it up' if half of your savings evaporate.

Do not let greed overwhelm your common sense, no matter how persuasive the siren songs of easy money may be.

If you still had any doubts, this recent and pervasive scandal of insider trading at the Fed demonstrates how rotten and inefficient and rigged for the benefit of a few that the existing 'market' economy has become.

Stocks were off to the races, as fear was shed and greed became the theme of the day for traders.

Gold rose, and silver rose even more, rising the wave of fearless beta.

The Dollar fell slightly, slipping off the 94 handle.

The VIX dropped through its moving averages on an upswelling of exuberance.

The root cause of these supply chain disruptions are fragile operational systems driven by self-serving greed, the growth of behemoth corporate monopolies, and reckless, short term management.

Stock option expiration tomorrow.

Have a pleasant evening.