Stocks and Precious Metals Charts - Forget It Jake - The Great Wealth Transfer Mechanism

 

"The sense of responsibility in the financial community for the community as a whole is not small.  It is nearly nil.  Perhaps this is inherent.  In a community where the primary concern is making money, one of the necessary rules is to live and let live.  To speak out against madness may be to ruin those who have succumbed to it.  So the wise in Wall Street are nearly always silent.  The foolish thus have the field to themselves.  None rebukes them."

John Kenneth Galbraith, The Great Crash of 1929


"Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.”

Richard M. Salsman


"How did we get into this mess in the first place?  As in the 1920s, the current 'disturbance' started with a 'mania.'  But manias always have a cause.  If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset.

The particular asset varied from one boom to another.  But the basic underlying propagator was too-easy monetary policy and too-low interest rates...  And then of course if monetary policy tightens, the boom collapses."

Brian M Carney, Bernanke Is Fighting the Last War, Oct. 18, 2008


"Foolishness has a knack of getting its way; as we should see if we were not always so much wrapped up in ourselves.  In this respect our townsfolk were like everybody else, wrapped up in themselves; they did not believe in plagues."

Albert Camus, The Plague

Well the good news is that stocks have a ways to go lower if we are looking at a genuine CrashTrak signal.

The bad news if you are holding on to this mess you are losing a lot of your recent profits, for mostly nothing.

I came in from Friday evening short, and took them down before the close today.

Let's see where they take this thing next.  It's a bit early in the year for a crash landing.  But they have a very good scapegoat teed up.

Don't want to waste a crisis, or a distraction.  Look at Boris Johnson go.

Gold and silver rallied hard in the morning, but were quickly hit and hard back down to a little over unchanged.

Strafing the lifeboats is harsh but effective.   Especially if you are feeling especially audacious and unindictable.

The Dollar edged a little higher to 100 on the DXY.

Who could have seen this coming?

Mackie, what price did you pay?

Forget it Jess.  It's Central Banking.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - What Time's the Next Black Swan? - Down to Key Support

 

"The period of financial distress is a gradual decline after the peak of a speculative bubble that precedes the final and massive panic and crash, driven by the insiders having exited but the sucker outsiders hanging on hoping for a revival, but finally giving up in the final collapse."

Charles Kindleberger


"They run all away, and cry, 'the devil take the hindmost'."

Beaumont and Fletcher, Philaster, or Love Lies a-Bleeding


“It has been more profitable for us to bind together in the wrong direction than to be alone in the right one.  Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes.  This is apparent from a social pathology: psychopaths rally followers.”

Nassim Nicholas Taleb, The Black Swan
 

"Through a set of economic policies designed to bail out and subsidize failed and often tainted corporate enterprises, while actively promoting a false sense of confidence to support those policies, the public has become exposed, by those very people entrusted to protect them, to dangerously high levels of hidden counterparty risks. 

The cautionary functions of the media, the political class, and the regulatory bodies have been routinely directed, distorted, and even silenced for the benefit of a highly compromised and increasingly self-serving elite.  And this corruption has begun feeding on its own momentum, resulting in increasingly blatant examples of deception, distortion, and outright theft.  This is crony capitalism, and its deadly credibility trap." 

Jesse, April 2012

 

Stocks retraced the bounce from yesterday, but managed to hold at key support levels.

We may be one exogenous event away from a significant market dislocation.

Precipitous declines of 10+% are always lower probability events, but sometimes the tails are little fatter than at other times.

Gold and silver bounced.  Silver in particular was impressive since it diverged from stocks. 

The VIX fell.  

There is not panic selling yet.   I suspect the specs are buying the dips.

I came in short from last night and got a little shorter on the early bounce.   I trimmed back a bit for the weekend. 

If the major stock indices break below further key supports with the right kind of tension on the tape I will try to start calculating just what kind of decline we may be facing.  

The Fed is active in the markets.   But even they have a limited ability to respond to a significant event.

Stock index option expiration next Thursday.

As next week is Holy Week I will be posting but it may be late or abbreviated.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Stock Option Expiration Next Week

 

"For the hearts of these people are hardened,
and their ears cannot hear,
and they have closed their eyes,
so their eyes cannot see,
and their ears cannot hear,
and their hearts cannot understand,
and they cannot turn to me
and let me heal them."

Matthew 13:15


"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought."

John Kenneth Galbraith


"In spite of every sage whom Greece can show,
Unerring wisdom never dwelt below;
Folly in all of every age we see,
The only difference lies in the degree."

Nicolas Boileau-Despréaux


"Obstinate ignorance is usually a manifestation of underlying political motives."

Michael Kalecki

 

Stocks shook off geopolitical and economic concerns and moved higher.

But they ran out of gas towards the end of the day, and gave back some of their gains.

Was this just a bounce, or the beginning of a turnaround.

Stay tuned and we'll see tomorrow.

Gold and silver managed to post some gains and hold on to them.

Silver is now back to even on the week.

The VIX fell back a bit.

But The Dollar pushed higher toward the 100 handle on the DXY index.

Next week things could be a little more lively because we start to get earnings numbers for the first quarter, and there is a stock option expiration on Thursday. 

The markets will be closed on Friday in observance of Holy Week.

But first let's see how the markets go into the weekend.

Have a pleasant evening.

Stocks and Precious Metals Charts - But If Not - The Vast Wasteland

 

“Why do you not understand what I am saying?  Because you cannot bear to hear my word.  You belong to your father the devil, and you willingly carry out your father’s desires.'"

John 8:43

 

"O Nebuchadnezzar, we do not need to defend ourselves before you in this matter.  If we are thrown into the blazing furnace, the God we serve is able to save us from it, and he will rescue us from your hand.   But if not, even if he does not preserve us, we want you to know, O king, that we will not serve your gods, or worship the images of gold you have set up and commanded us to worship." 

Daniel 3:16-18

 

"Take a stand for that which is right, and the world may misunderstand you and criticize you, but you never go alone.  Walk with him this morning and believe in him and do what is right and he'll be with you even until the consummation of the ages. 

You're going with justice, you're going with goodness, and you will have an eternal companionship.  And the world will look at you and they won't understand you, for your fiery furnace will be around you, but you'll go on anyhow.  But if not, I will not bow, and God grant that we will never bow before the gods of evil."

Martin Luther King 

 

"For evil to appear disguised as light, as charity, as historical necessity, or social justice is quite bewildering to anyone raised on traditional ethical concepts.  But for the Christian who builds his life on the word of God, it merely confirms the fundamental perversity of evil." 

Dietrich Bonhoeffer 

 

"The most important problem in the world today is your soul, for that is what the struggle is about." 

Fulton J. Sheen

 

Stocks sold off again today, dropping down to some key support levels.  

They managed to bounce back a bit into the close.

Keep an eye on those support levels, because they may be pivotal between what is a 'normal' correction and another failed rally.

Gold finished unchanged and silver managed to bounce back into the green with stocks, but both were hit hard in the early trading in New York and London.

The Dollar edged a little higher.

The VIX rose with the morning declines, but pulled back a little in the afternoon.

This is a dangerously volatile market, with a number of significant exogenous factors that could move stocks significantly.

I have taken down my index shorts and am not just sitting in cash.

I have pretty much stopped watching network television because the fog of war is flowing thick and heavy.   Most shows and series are just not very interesting or entertaining or enlightening.

I remember the FCC commissioner in 1961 referred to network television as 'a vast wasteland.'

Now it is more like a noisome swamp, clouded with thick mists, populated by will o' the wisps and phantoms.

Have a pleasant evening.