SP 500 and NDX Futures Daily Charts

A light volume, headline-driven market.

There is a lot of desire on the Street to rally stocks into the year end.

Europe is a stumbling block.

What Is the Primary Trend In Gold?

The market maven Richard Russell often speaks about 'the primary trend' in certain assets and markets.

I speak of it as the fundamentals, and also the primary trend.

Someone asked, "What is the primary trend in gold?"

Here is the big picture chart with the trend marked in green.

The primary trend in gold is being driven by two major fundamentals:

1. The Central Banks were net sellers of gold for over twenty years. One can debate their motivations, but it did appear to be a coordinated effort to suppress the price, exemplified perhaps by the clumsy sale of the Bank of England's gold at what has become known as Brown's Bottom. The Banks have now become net buyers of gold, led by the BRICs and popular movements by individuals to safeguard their wealth from the changes in the fiat money systems.

2. The US Dollar Reserve currency regime, also known as 'Bretton Woods II,' is changing. What exactly it is changing into cannot yet be seen with certainty, but it does appear likely that it will be a basket of currencies and gold, and perhaps silver. The Anglo-American banking cartel is fighting this change, as it affects the basis of their power. They are seeking to control it and the evolving nature of the global money supply.

Change is coming slowly, but surely.

"All things flow, nothing abides. You cannot step into the same river twice, for the waters are continually flowing on. Nothing is permanent except change."

Heraclitus

If you wish to find the unchanging, the perfectly complete and sufficient in itself, do not seek it in this world, but in something much greater than yourself, your money, and your diversions from the face of the eternal.

Gold Daily and Silver Weekly Charts - Another Bear Raid Down to Support That Fails

There are a lot of 'fingerprints' on the tape these days.

The bear raid in bullion diverged significantly from the miners this morning, as the wiseguys were playing the old fake 'em and take 'em on the public.

Intraday commentary on that topic here.

What next? The markets are looking for a BIG move on Friday based on European headlines. They may not get it, whatever it turns out to be, but if they do, go with it.

There is no better way to divert an abused public than with bread, circuses, and a rising stock market, IF you can afford them.

SP 500 and NDX Futures Daily Charts - Pop and Flop

Another wide ranging day that accomplished very little, and on light volumes.

The option purchasing is showing a lot of convexity. People are looking for a big move on Friday tied to the European summit meeting. They just don't agree on which way it will move.

The Gold Bull Market Back to the Cup and Handle in 2010

I am probably going to truncate the existing daily gold chart again because it is becoming a bit unwieldy. As you know I reduce its scope occasionally to facilitate showing it on the cafe blog.

But for those who asked for it, here is a copy of the 'big picture chart' showing the original breakout formation of the cup and handle going back to 2010.

You may not be able to view it here, but perhaps you can click and save it if you wish.

Intraday: Today's Gold/Silver Cross Trade Between Bullion and Miners Seemed Particularly Blatant

Here is a message to some trading friends this morning with gold around support at 1710.

They normally hit the miners hard before a smackdown in gold and silver. They did this on Friday. But today we saw the opposite happening, at least this morning. Earlier I had sent out a message saying, 'I think the bottom is in.'

Denver Dave and I had come to the same conclusion after some email exchanges and a search of the news.

See Hecla?
They are buying the miners while smacking down bullion.
And now it reverses.
I bought it pretty hard bullion and some miners.
I hedged the stocks with index shorts keyed on the SP.

They started buying some of the miners, especially some of the silver miners, in numbers and aggressively even while they were still smacking down gold and silver spot prices to the lows.

Those lows were an almost perfect hit on the accumulation-distribution trend on my chart.

I think this type of price action gives them the opportunity to buy some decent positions in the higher beta miners without trading against themselves in the market. The negative bullion price action keeps most of the public buyers on the sidelines.

It is not illegal to buy one thing and sell another.  I am running long bullion/miners and short the SP at the same time.

But it is not allowed to manipulate prices in commodities on the futures markets to game the stocks. And today's action in the precious metals futures was especially heavy handed in smacking price and running stops.  Is anyone trading the futures markets anymore except for insiders?  Probably not so many directly, but through things like ETFs and some funds, perhaps more than they realize.

I am not sure we are out of this nonsense yet because of so many guys standing for delivery this month, and the negotiations that are always going on in cash to buy out the longs w/o taking delivery.

But these sorts of moves tend to set up bigger moves higher. Barring the disintegration of Europe in the short term of course.

Speaking of heavy handed, is Standard and Poors working off some sort of community service sentence? Do they have to wear orange jumpsuits while issuing negative statements and downgrades on foreign sovereign debt in high coincidence with US policy measures?

The pressure they are putting on the Europeans to back up Timmy's policy advice (thinly veiled directives) to them is a bit much. I understand the advice is to cut their rate 50 bp or more tout de suite to stop making Ben look bad and smooth the way for the US QE3 without knocking the dollar off its pedestal. And of course they must act to bail out the TBTF banks.

Is Tim going to be appointed financial Viceroy of Europe by the Banks? Would that be an IMF or Treasury title?

One can only look on in wonder these days.

P.S. I have had no position in Hecla today at all. I watch it and a few others as bellwethers.

Categorizing Those Unemployed by the Recession Caused by the Financial Crisis

Words like 'shameful' and 'national disgrace' do come to mind.

Rutgers University Working Paper
Categorizing the Unemployed by the Impact of the Recession
By Dr. Cliff Zukin, Dr. Carl E. Van Horn, and Charley Stone

In August 2009, the John J. Heldrich Center for Workforce Development at Rutgers, The State University of New Jersey began following a nationally representative sample of American workers who lost a job during the height of the Great Recession.

The research began with a cross-sectional sample of 1,202 who had said they had lost a job at some point in the preceding 12 months (between August 2008 and 2009). They were resurveyed in March 2010, again in November 2010, and then in August 2011.

A total of 3,972 individual surveys were completed over the two years. Well over half of the original respondents participated in all four waves of the project, meaning they spent, on average, 50 minutes of their time responding to roughly 200 questionnaire items.

This resulting measure combines an assessment of the respondent/family’s current economic status with the magnitude of change in the quality of daily life, with an assessment of whether this change represents a new normal or is a temporary stay in limbo. Combining answers to these three questions result in a typology with five groups, defined as follows:

􀀁 Workers who have MADE IT BACK consider themselves in excellent, good, or fair financial shape and have experienced no change in their standard of living due to the recession.

􀀁 People ON THEIR WAY BACK have largely experienced a minor change to their
standard of living, but say the change is temporary. They also consider themselves in excellent, good, or fair financial shape.

􀀁 Workers who have been DOWNSIZED meet one of three conditions; they have
experienced: a minor change that is permanent; a minor change that is temporary, but they are in poor financial shape; or a major change in their standard of living that is temporary and they are in at least fair financial shape.

􀀁 Workers classified as DEVASTATED have experienced a major change to their
lifestyle due to the recession. They can be either in poor financial shape and think the change is temporary, or in fair financial shape but think this change is permanent.

􀀁 Workers that have been TOTALLY WRECKED by this recession have experienced a major change to their lifestyle that is permanent and are in poor financial shape.

Read the rest of this working paper here.

Gold Daily and Silver Weekly Charts - Light Volumes and Frivolous Day Trader Markets

“The world is short water, energy, & commodities. We’ve under-invested in our natural resources as a society and as a consequence, we’ll see higher prices around the globe.”

Mark Cutifani, CEO, AngloGold-Ashanti

Gold was hit early on, and silver shortly followed, despite the rally in stocks and the falling dollar.

This struck me as price manipulation tied to the settlement negotiations that are being done at the Comex as the December positions still standing get resolved for cash with a premium.

Later in the day all prices dropped, with stocks retaining some gains, on news that Standard & Poors would place all the Euro nations on ratings watch, with a pointed reference to the summit meeting later this week.

Speaking of debt, here is a chart showing the worst of the G10 nations in terms of total debt in their economy.  As you may recall, I hav said that before the US economy falters, the UK will go first. 

On Sunday I read The Hunger Games at the suggestion of she-who-must-be-obeyed in my role as the judge and chief taster of things that the household children might consume that could-be-of-a-questionable-nature.   This goes for books, movies, and food.   I am also in charge of spider and other unappealing creatures disposal. 

It was an easy story and diverting for those who like futuristic science fiction. While a bit dark it was not inappropriate for the 13+ set. I picked up books 2 and 3. I believe there is a film coming out on this book next year.