Gold Daily and Silver Weeky Charts - Better Call Saul

It is hard to miss the price capping and manipulation on the metals market at the Comex, unless one does willfully so. And there are certainly those who do, and I suspect you know who they are.

There was little action on the metals front last Friday as the clearing and warehouse reports below demonstrate. The action has shifted to the East.

I expect the markets to unravel their story about the future somewhat slowly over the summer. This goes for stocks, bonds and commodities. We are seeing a great reckoning between reality and the will to power.

If anyone is near to a fiduciary responsibility for the obligations for gold and silver bullion delivery, or even large positions of naked shorts in stocks, and they do not personally have title and possession of the metal or the equities, I would probably suggest that they get out or start lawyering up now, with a well thought out Plan B involving offshore accounts and domiciles.  You can always try for a Presidential pardon later on.   I suspect it will become the fashionable thing to do.

If this convoluted system of asset rehypothecation starts breaking bad it is going to make MF Global look like a church picnic.  'Everyone was doing it' is not an unassailable defense, and 'I had no idea what was going on'' only works for those with very lofty connections and office.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Apple Splits 7-1, An Otherwise Sleepy Day

Apple's seven-for-one stock split took place today.

The split will allow Apple to take its message around the professionals and institutions directly to the retail investor who will now consider Apple 'more affordable.' It would also make it more palatable for that great stock Judas goat, the Dow Industrials average.

I figure the market will top out this summer, sometime around 2000 on the SP 500 futures or perhaps a bit of an overshoot. I don't know how long it will take to get there, and we may see a minor correction first. We are working off a funny kind of a stock formation that will lead to an unsustainable level unless it corrects back to the more sustainable trend.

This is barring any exogenous events which will tend to spin the market according to their own force. As the market reaches loftier levels ahead of the real economy, it becomes increasingly vulnerable, less robust. Or as Taleb might say more 'fragile.'

So we will see how it progresses, and will be able to determine if we are seeing a classic handoff of pumped up stocks to mom and pop near a top, or just an ongoing campaign by the Fed to inflate asset bubbles and reward their cronies with paper assets, while starving the real economy.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Negative Interest Rates Have Arrived

"We have been silent witnesses of evil deeds; we have been drenched by many storms; we have learnt the arts of equivocation and pretence; experience has made us suspicious of others and kept us from being truthful and open; intolerable conflicts have worn us down and even made us cynical.

Are we still of any use? What we shall need is not geniuses, or cynics, or misanthropes, or clever tacticians, but plain, honest, and straightforward men. Will our inward power of resistance be strong enough, and our honesty with ourselves remorseless enough, for us to find our way back to simplicity and straightforwardness?”

― Dietrich Bonhoeffer, Letters and Papers from Prison

Negative interest rates are a stealthy confiscation of wealth and of savings from those who are less equipped to protect themselves against it.

The policy makers seek to compel people out of their savings and any safe havens, and into the unreformed paper asset markets of Wall Street, so they can be sheared and then slaughtered.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Breaking Bad

Non-Farm Payrolls came in a tad to the low side, but close enough to be considered 'in-line.'

Stocks continued to romp higher. The Russell 2000 and the broader market continue to lag a bit, but has finally returned to even money for the year. Chart below.

In a quiet market, absent any exogenous events, they can certainly keep whipping the market higher led by the SP 500 and NDX futures tag team.

The economic news is relatively lightweight next week with a few of the more important items near week's end.

It feels exactly as though we are already in the dog days of Summer.  Since Alibaba is coming out on August 8th, we might well expect the market to muddle through until that beast can come forth, all things being equal.

It's not about the money; it's about the power.  We make a desert, and call it peace.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Pop Go the Weasels

Gold and silver liked Marvelous Mario's new negative interest rate policy for the ECB this morning. There is not a lot of doubt in my mind that they took a hit the past couple of days after option expiration to dampen any rally possibilities over what should surely be a big positive for the precious metals. Such are the ways of a currency manipulation.

So what next? Non-Farm Payrolls tomorrow, and Wall Street has set up what ought to be a real softball number of 215,000 headline jobs added, at least in the SIXTH year of The Recovery™.

If there are any more bad numbers to get out of the way, now would be the time to do it, because the midterm elections are drawing closer and closer, and the comps don't need to be increased for the months before an important event. That is certainly something that Wall Street and Pennsylvania Avenue have in common.

I am not so concerned with the short term movements in markets these days. Things will play out as they play out. Draghi's plan to institute negative interest rates on cash is significant, and don't let anyone make you think that is not. 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Wages, Wages, Wages

The ECB initiated its negative interest rate policy today, and despite a brief slump the equity market took off and set new highs, squeezing the bears. Gold and silver liked this policy, which is probably why they were beaten down further post-option expiry. Can't frighten the herd you know.

Tomorrow is Non-Farm Payrolls, and Wall St has us set up for a softball number of about 215,000 headline jobs.

Its a tough call but I would like to think that similarly to GDP if Washington has any bad news to get out they are going to do it now, rather than closer to the mid-term elections.

Mary Jo White once again denied that the market is rigged, but waved her royal hand towards those who have been calling out the blatant front running hypocrisy, and initiated a few token reforms.

Tomorrow I would watch the hours worked and the wages paid. The jobs being added are inferior, and certainly will not be supporting an increase in aggregate demand which is what this economy needs to become sustainable, without adding a substantial number captive customers in new colonies, that is.

Have a pleasant evening.