Gold Daily and Silver Weekly Charts - Stock Option Expiry - US Douleur du Monde

"But there is a sort of 'Ok guys, you're mad, but how are you going to stop me' mentality at the top."

Robert Johnson


“A man who procrastinates in his choosing will inevitably have his choice made for him by circumstance.”

Hunter S. Thompson

Why are our election choices at the end of the day so often a choice between repugnant and despicable, so often a choice between corrupt narcissists with little difference except for their marketing brand and particular sponsors?

I think most of us already know the answer.

Tomorrow is a stock option expiration for March, which as I recall is not inconsequential.

A surprising number of people contacted me via email to ask if something had happened, as gold rallied but was noticeably lagged by PHYS and some of the mining stocks.

And then later on gold was hit, giving up its gains for the day and the miners et al. knocked down a bit further.

Silver held up fairly well, but was more surprising was that the dollar had quite a poor day of it as you can see below.

Other than normal profit-taking and short selling, I would consider the possibility that the biggest options players, who tend to be the Banks and the others who play virtually every market and market cross, saw a nice opportunity to clean the clocks of the call buyers in the miners and related trades who were enthused by the big run higher sparked by the Fed.

However that is a surmise for now and there are somewhat less complicated explanations.  But after all we have seen, I am much more willing to entertain the crookedness of the markets than I might have been some years ago.   The options markets have become almost as bad a rat's nest as the forex markets for the retail traders.

There was negligible precious metal activity at The Bucket Shop yesterday, and just a little leakage of bullion out of the warehouses.

Let's see what happens.

SP 500 and NDX Futures Daily Charts - Stock Option Expiry for March Tomorrow

Stocks were getting jammed higher in fairly light trading today, led by the SP futures more than anything else.

Some might consider this some preliminary action to the March stock option expiration tomorrow.

Then again, perhaps it is just more animal spirits, brewed by those moonshiners at the Fed.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - March Madness

"The main thing is that the debt is in dollars. So we can't run out of cash--we print the stuff. Suppose that foreigners decide we're not reliable.   How does that drive up interest rates?   The Fed controls short-term interest rates, and long-term interest rates reflect expected short rates. How's that supposed to happen?"

Paul Krugman, Interview on CNNMoney

Well, at least now we know why gold was knocked down lower in the paper trading earlier this week.

It was to prepare us for The Big Retraction from the Fed, who begged a mulligan on their most recent rosy forecasts from three months ago about The Recovery™.   And as suspected, it's those foreigners who are at fault.  And that's why we can't have nice things.

There was intraday commentary about that here.

And so after 'fessing up and saying that things are not quite as good as they had thought, the dollar tanked and gold took off higher with some serious vigor.

There was little delivery activity yesterday in gold at The Bucket Shop.

But some customers coughed up over a million ounces of silver, most of which were taken on the cheap by the house account at JPM.    What prescient trading.

You may see that in the delivery report box scores below.  Quod erat demonstrandum.

Let's see how the rest of the week goes.

Get right, and sit tight.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - There Goes The Recovery™ Again, Receding Into the Future

“Victorians, Victorians, who never learned to weep.
Who sowed the bitter harvest that your children go to reap."

F. Scott Fitzgerald, This Side of Paradise

Ah, the vagaries of empire, and the New American Century. O brave new world, that has such wieners in it.

The Fed had to ask for 'a mulligan' on its forecasts from just a few months ago, and reflected that in their FOMC statement today.

They reduced the forecasts for growth and inflation for this year, and suggested they would not be raising rates quite so confidently.

And for all this they seemed to blame 'global developments.'   As if.

Anyone with open eyes and an intermediate education in macroeconomics knows that the Fed is raising rates not for any benefits to the real economy, but to provide themselves some policy room to cut rates without going negative when their latest financial asset bubbles begin to collapse.

So the economic models continue to invent fictions about these long eight years that we have awaited The Recovery™,  while the pampered princes of the Establishment nod their heads accordingly, with a few notable exceptions.

I wonder how well the huddled masses will take it, when they vote for hope and change again, and get thrown under the bus without so much as a fare thee well.

And in the distance, we hear the increasing murmurs from the long suffering sans-culottes.

Have a pleasant evening.

FOMC Statement - Backing Off On the Rate Increases, Lowering Forecasts

The Fed recognized that growth is slow, and that inflation remains subdued.

I include a chart of the real median household income to demonstrate why the recovery is so wobbly.  Demand and investment are weak because most people have less money to spend.  Wow, what a surprise.

The pampered princes of the establishment keep pointing to the 'great jobs growth' while ignoring the low pay, part time nature of those jobs, and the slumping Labor Participation Rate.

The 'trickle down theory' does little more than enrich the already rich, and stretch the fabric of society to the point of instability.  

And I believe that this is purposeful, because they are caught in a credibility trap.  They cannot address the root problems because it risks their place in the 'system' that they have crafted that rewards their wealthy and powerful patrons excessively at the expense of most others.

The Fed attributes this uncertainty to 'global economic and financial developments continue to pose risks.'   And they have not only scaled back their inflation expectations, they have also scaled back forecasted GDP growth, which I think is still a bit optimistic.

If one looks at their 'dot plot' they are indicating a less frequent raising of rates this year, perhaps only two occasions rather than three.

I have included the Fed's data sheet below the text that shows the difference between what they had forecasted in December and what they have changed that to now.

The US dollar dropped and gold took off higher like a scalded cat.  Stocks remain mixed.

Janet Yellen will be giving a press conference shortly.

Release Date: March 16, 2016

For release at 2:00 p.m. EDT

Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Household spending has been increasing at a moderate rate, and the housing sector has improved further; however, business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. However, global economic and financial developments continue to pose risks. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to monitor inflation developments closely.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent.  The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo. Voting against the action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.

Gold Daily and Silver Weekly Charts - The Vultures

"We see dimly in the Present what is small and what is great,
Slow of faith how weak an arm may turn the iron helm of fate,
But the soul is still oracular; amid the market's din,
List the ominous stern whisper from the Delphic cave within,—
'They enslave their children's children who make compromise with sin.'


Truth forever on the scaffold, Wrong forever on the throne,—
Yet that scaffold sways the future, and, behind the dim unknown,
Standeth God within the shadow, keeping watch above his own."

James Russell Lowell

The precious metal markets appear to be seriously interested in what the FOMC has to say tomorrow afternoon around 2 PM EDT.

In fairness to Mr. Rubio, in reference to the video with Greg Palast below, almost all of the mainstream candidates have some 'vulture' perched on their shoulders. The only thing that is new about all this is that the Democrats have wholeheartedly embraced the corrupting power of Big Money since the Clintons rolled into town in the 1990's.

The world watches, and it sees what we may not.

And because our eyes are firmly closed, when they react accordingly, we can pretend to not understand why.

And the 'economic hitmen' are coming back and actively operating now on American soil. Watch what happens next.

Have a pleasant evening.