SP 500 and NDX Futures Daily Charts - Push to the Top; Headphones On

The employment and housing numbers in the real world were not very good this morning.

But never mind that, the 'tech stock' craze is back, according to financial television.

The Nasdaq managed to match its closing high from the tech bubble today, about fifteen years ago.

Amazon,  Google, and Microsoft were reporting their earnings and revenues after the bell.

They were trading a bit mixed with some of the less massaged metrics coming in rather disappointing.

A pleasant time is guaranteed, for none but the Masters of the Universe.

Have a wonderful evening.

NAV of Certain Precious Metal Trusts and Funds - Sprott Bid For Canadian Metals Trusts

Bloomberg reports that Sprott may be planning an 'unsolicited bid' for the acquisition of the Central Gold Trust and the Silver Bullion Trust.  The planned acquisition would cut the 'trading gap' or NAV discount of the Gold Trust.

 

The market has already cut the recent discount to NAV roughly in half this morning with a rally in the price of GTU.  Markets tend towards the arc of price discovery, if sometimes more slowly, even in a climate of persistent manipulation.   And once begun, those adjustments have sometimes then come suddenly, which 'no one could have foreseen,' as we saw in the most recent financial crisis of 2007.

"Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as Thursday, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unitholders can redeem their investment as a means of closing their trading gaps.

Sprott aims to use its broader marketing platform and investor relations expertise to close the historic trading gap on both targets between their unit price and their net asset value, said the person familiar with the situation. Sprott projects it will add about $3.14 per unit in value to Central GoldTrust and 95 cents a unit to Silver Bullion by closing that gap, the person said.

J.C. Stefan Spicer, president and chief executive of both Central GoldTrust and Silver Bullion, declined to comment. Glen Williams, a spokesman for Sprott, declined to comment."

 

In other industry news, Bloomberg also reported that growing Swiss exports indicate that 'gold bars are leaving U.K. vaults for Switzerland, where they’re refined and sent to Asia. India and China.' Or in other words, gold is flowing from west to east.

 

Sometime recently challenged that notion of gold flowing East, as just a slogan.  Look, he said, at the mighty gold inventories on the Comex.  Yes, I have looked, and what is truly available at these prices is a rounding error on the physical markets in Asia and the Mideast. 

 

Right now, at these prices, there are a total of 567,928 ounces of registered gold available for delivery in all of the Comex warehouses.   That is a little under 18 tonnes.  The Central Gold Trust alone, a fairly modest player in the bigger scheme of things, holds 698,496 ounces of gold bullion.  It appears that Sprott is bidding to pick up all of it, and at a discount to spot.  How is that for mispricing of value?

 

And yet all of this, all of the Comex and these trusts,  this is just about what is being taken out of the Shanghai gold exchange alone each week.  And then there is India, Russia, and the Mideast.

 

The crux of this, of course, is the implied threat of the West, led by the US, to throw their own gold reserves on the table to keep the prices of bullion artificially low and 'under control.'   Really?  Throw down then, and see what happens next.  Because once that is done, there is no going back.  And the dislocation that follows may bring down more than a few bullion banks with it.

 

Someone needs to sit down with these central banking lads and give them a more realistic assessment of what price levels they can ever hope to sustain given the highly distorted dynamics of the markets which they themselves are perpetuating.   I am sure their bullion banker buddies will tell them whatever they wish to hear while the fees are flowing.

 

I suspect that the real gap here is the divergence between the physical markets and the paper markets.  And after several long years of persistent market rigging it is yawning.   You might do well to mind that gap, because it may close at some point, and that move could be sudden, and noticeable.

 

 

Gold Daily and Silver Weekly Charts - Rangebound for now

We had a few paper claims traded for gold and silver in the delivery reports.

They were moving bullion around the plate in the warehouses.

Gold and silver took a hit around 10 AM New York time and never really recovered.

There is a minor option expiration next Monday.

The next move will show us the trend, or trend change.

Have a pleasant evening.

 

 

 

 

SP 500 and NDX Futures Daily Charts - Bubble-nometry

After the bell, Facebook was the big news tickle on results, but the stock was flat after hours.

Qualcomm hit the numbers but lowered its forecast, and AT&T beat EPS by a penny but flat revenues missed.

Las Vegas Sands turned in poor earnings results and was selling off after hours. Wait until the sun shines, Shelly.

The tape had some oomph and then faded into the afternoon with the after hours trade sluggish.

We might be close to the end of the wash cycle, and might start hearing the whirring of a rinse.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Currency Wars

Early this morning I put out an update on the state of the currency war.  I suggest that you take a looks at this short piece which I added to the Russia gold reserve update here.

 

The metals were the same old, same old. They were hit twice in the morning, in London and then New York, and rallied into the close to gain back most of what had been lost yesterday.

The metals are largely moving sideways here, and the wiseguys are trying to shake some metal out of loose hands.

It worked a bit in gold. If you look at the delivery report showing yesterday's action, you can see that a customer of JPM let some bullion go, and JPM and Nova Scotia picked it up for their house accounts.

 

I also show the warehouses for both gold and silver below.  

 

While the actual movement of the metals is not unique compared to the recent status quo, I thought it was impressive to see the amount of physical silver being held by JPM.   While we do not know if those are for their accounts or customers, it is still noticeable.

 

As for gold, most of the Comex gold is being held by HSBC and Scotia Mocatta, although there is also a 'kilo gold only' report that I normally do not show that is dominated by Brinks.  I do not show it because the report has no registered bullion, merely kilo storage at least since they have been issuing it as a new report.

 

Larry Fink, the head fink at BlackRock, says that the best stores of wealth these days are in NY, London and Vancouver real estate, and contemporary art, rather than in gold.

 

What an obtuse observation.   NYC, London, and Vancouver real estate are in an obvious bubble, and as for contemporary art, art in general has been a good hedge against inflation in general, but is notoriously illiquid, and subject to great variances in quality and appreciation.  And art is also in a bit of a bubble.

 

So what did old Larry really say?  That there are a couple of bubbles here, likely fueled by low interest rate hot money, and it is better to pile in there at a likely top, rather than buy gold which is bottoming after a three year bear market, and is one of the more undervalued of the traditional hedges against uncertainty and risk.

 

Right on Larry.  Thank you for talking your book.  Don't let the door hit you on the way out.

 

If there wasn't a gold pool still operating, I would say that the bottom is probably in when you start hearing rubbish like this.

 

Have a pleasant evening.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Shaky Times In Croneyland

Stocks made an early move and then gave most of it up into the afternoon.

Volumes to the upside remain light, and so are vulnerable to profit taking. My sense is that they are primarily gimmick driven.

After the bell Chipotle beat its earnings and revenue, but missed on comparable store sales. Further, they see the rest of the year growth in the single digits. While they may sound good for most stocks, for a company with Chipotle's multiples that was not enough, and the stock was selling off after hours.

Yahoo just missed everything, and the business continues to wallow, although they are doing well in the their investments like Alibaba.

 

YUM says they were hurt by the strong dollar.  They get quite a bit of their sales from China.  Their results missed expectations pretty much across the board.   However, the stock traded higher after hours by affirming its full year forecast.   Until they don't.

I think the stock market is vulnerable to a sell-off because its composition seems as substantial as meringue.

However, buying programs meet most selling and the Fed seems invested in keeping paper assets inflated for their constituency, so unless something happens to really provoke some selling volumes I think the market can keep drifting.

This is a set up for a crash IF the right trigger presents itself. And the responsibility for this is with the Fed and the other regulators who permit such a dangerous market, driven by spoof trading and hot money, to become the new normal.

 

The problem in trying to play it is that many short positions are time sensitive, and if volumes remain light one falling into the price gimmicking machine of the algos.  It is one thing to be right, and very much another thing to have the right timing.  This is why I prefer riding trends rather than the wash and rinse cycles of the wiseguys.

Have a pleasant evening.