Gold Daily and Silver Weekly Charts

I was out most of the day.

The markets were quiet, digesting the recent developments in the US domestic economy, but especially with the European debt situation.

See you Monday.

SP 500 and NDX Futures Daily Charts

Gold Daily and Silver Weekly Charts - A Possible Breakout on Debt Monetization in Europe

The 'gut check' in metals was very short-lived, as the precious metals rallied with the melt up in financial assets on the debt monetization plans out of Europe to save their banks.   It was 'risk on.'

What next? We may have some follow on, but continued upside depends on additional QE3 from the Fed, as well as the actions by all the world's central banks to monetize the private banking debt and inflate their currencies.

The metals will do well in this kind of an environment. But the sailing is not yet clear.  There will likely be more upside after corrections, but if this works, then the major test will come with the December option expiration.

As a reminder I will be out of pocket tomorrow and will not be looking at emails or the markets, probably not until late night or Saturday.

SP 500 and NDX Futures Daily Charts - Time To Go On Bubble Watch

A massive rally in US equities today led by financials as there was relief that Europe will be bailing out the sovereign debt of some of their members, and most importantly of all, the large European and US banks.

The US GDP came in well. Intraday commentary was provided, and it was a hollow victory as household income continued to decline.

I think the stock rally may have more to go, but it might take QE3 to take it much higher into year end. And if we do get QE3, we then go into bubble watch as financial assets inflate at the expense of the real economy.

This is what happens when one applies monetary stimulus to a broken economy.

The US GDP Report

One picture is worth a thousand words...

Buffaloed Tim and Howdy Bernanke

Gold Daily and Silver Weekly Charts - La Douleur du Monde

Another nice up day in the metals running a bit counter to commodities.

Gold finished around the big resistance of 1720. Today was a quiet expiration and it may be that the new holders of futures, compliments of their 'in the money' calls, will be given a gut check tomorrow or the next day.

But the news and the headlines from Europe are so dominant in this market that this is the primary driver, and most other things are secondary.

I put my own portfolio in a defensive position into the close. I will be out of pocket almost all day on Friday so there will be no updates until very late, or on Saturday.

SP 500 and NDX Futures Daily Charts - Hope Floats, and So Does This Market

A bit of a drift higher with a short squeeze based on a report (rumor) that China will ride in on a white horse and bail out Europe by buying their euro bonds.

This is a very mixed market and headline driven. So we wait for the next headline which is what it will take to fuel a sustained rally if it is favorable and substantial.

Bill Black: What I'd Demand of the Fed - Fire Bernanke and Geithner

I think this is a superb list, but a bit misdirected, because as is obvious from my title, the advice ought not to go to the Fed, but to the government in Washington. Timmy is Ben's colleague and quasi-boss, and the problems are intertwined.

That takes nothing from Bill Black who would be an appropriate choice to head one of the big regulatory agencies. And it is unlikely that Obama would appoint him.

The Fed is a critical part of the problem, and is unable to reform itself because it is owned by the banks and the monied interests.

But so is Washington. And that is a matter for a much deeper discussion on the crying need for serious political reform, and how it might be achieved.

They will throw out a landscaper's nightmare of tangled branches, but the key is to strike at the root of it, which is campaign finance reform and the access to power of organized money, and the personal benefits received therein by politicians.

This may not happen now, and the pampered princes of the political aristocracy may put it off yet again. But it will almost certainly happen, one way or the other, after the next financial crisis.

The tragedy is that much of this is within Obama's reach, despite his problems with a fanatical element in the Congress. His priority now is four more years, and to accomplish that he is taking money and orders from the Wall Street bankers.