SP 500 and NDX Futures Daily Charts - I Came to Casablanca For the Waters

Light volume trading day with mostly sideways action despite the 'better than expected' new home sales number.

President Obama gave the introductory speech to his new economic vision. It sounded good but many of his visions have turned out to be mirages.

After the bell Facebook and Visa beat their numbers, and Las Vegas Sands missed.

Many of the nouveau tech and financial sector companies use 'conceptual accounting' provided by the misinformation industry.

Have a pleasant evening.

Gold Intraday and the Slanting W Chart Formation

As a reminder, tomorrow is an option expiration for precious metals on the COMEX.  As you may have gathered a pullback today was to be expected given the behaviour of momentum algos and skittish longs.  Tomorrow is another matter depending on how the call and put structure of the options is distributed.

If a large number of calls become converted to active August contracts, then a 'gutcheck' to test the new contract holders on Friday or Monday may be anticipated.  That does not mean that shorting or selling is a sure thing for the momentum speculators.

The delivery period for the August contract begins at the end of next week.  The inventory levels at the COMEX are dangerously thin if a robust delivery mechanism for physical bullion remains functioning.   The word of the gold supply situation has gotten out to the general trading news sources.

A failure of the exchange is almost unthinkable given its consequences and the effects on an already eroded confidence and reputation. 

As we have recently seen, lower prices may have gleaned bullion from the gold ETFs, but it triggered a wave of physical bullion, particularly from Asia, that has placed the exchange systems in London and New York at risk.

I have highlighted the key support levels which will test the slanting W formation on the chart.

What happens will confirm the formation, or not, and help to set a minimum price objective from that formation if it does.

US Healthcare Costs a Global Outlier and Monument to Crony Capitalism

I think the Big Pharma/Health and Big Finance sectors have similar cartel like structures where a few large companies dominate the field, exercising considering political power and the ability to obtain subsidies and protections from the system while fending off regulation and price restraints.

There are others of course, like the energy field from exploration to distribution, often known as Big Oil, but which now includes natural gas and electric energy production and distribution.

The recurring myths of the efficient market and 'free trade' are exacting a heavy toll on the general public and the real economy.  They provide ideological cover to a favored elite that is acting in the manner of a privileged and extractive aristocracy while beguiling many with the allure of easy money.

The concentration of ownership in the media has become an inhibiting and directing influence in public discourse that is hard to miss.

The current recovery fueled corporate perks and ZIRP for the financial sector, a fine example of 'trickle down' economics, will be remembered as one of the great policy errors of modern economic history. They pretend ignorance, they feign helplessness, and they know.  But they are getting paid not to act effectively, and even not to see, but to spin some fantasy.

They 'feel your pain.'  They just do not do anything substantial about it.  Even a second term president can still talk as though he is a recently arrived outsider, critiquing the actions of some predecessor and a corrupt system in which is he barely involved.

These are not leaders.  They are like modern CEO's, professional organizers and managers, who talk a great game about their accomplishments but, when the truth comes out, posture that they stand outside the very system for which they have long held the ultimate responsibility.  

But even worse are those who make little pretense to justice and goodness and moral principle, preferring to appeal to the darkest impulses, the fears and hatreds of a society.  Their actions betray their words.

The lack of serious reform, in large part because of the partnership between Big Money and Washington's new political class, and the dormancy of the progressive impulse, will eventually stress the fabric of society to the limit.  And then change will come.

Read the entire story here.

Gold Daily and Silver Weekly Charts - Thursday Is COMEX Option Expiration

Gold finally broke through its 50 Day Moving Average today and ran a little higher on that momentum.

It is now in what could prove to be heavy resistance between 1340 and 1360.

Silver is not really moving with gold for now. I think gold is being driven by more of a short squeeze that is particular to its own supply issues, as well as a monetary situation that does not affect silver yet as strongly.

As a reminder, Thursday the 25th is precious metals option expiration on the COMEX.

Trading options on the COMEX is trading paper derivatives of paper derivatives of rehypothecated paper assets.   It is such an absurd game that only 'systems players' would stay with it.