SP 500 and NDX Futures Daily Charts - Even the Quad Witch Is Sleepy

Today was the big 'quad witch' of September in the markets, but you would have hardly known it as stocks popped and flopped.

SP is also rebalancing their indices today which is driving some of the volume.

The front month in the stock futures is now December. How time flies.

Have a pleasant week.

Jon Stewart: Chaos On Bullshit Mountain

Out of the mouths of comedians...

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Chaos on Bulls**t Mountain - The Entitlement Society
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What kind of a people could delight in machine-gunning the lifeboats of those who are attempting to escape, not to thrive but to merely survive, the mayhem and chaos that these same sociopaths have created through their selfish and criminal actions? And what sort of gullible fools will listen to them, and assist them in their work even if passively by saying nothing?

"The inability to identify with others was unquestionably the most important psychological condition for the fact that something like Auschwitz could have occurred in the midst of more or less civilized and innocent people.

What is called 'fellow traveling' (collaboration) was primarily business interest: one pursues one’s own advantage before all else and, simply not to endanger oneself, does not talk too much. That is a general law of the status quo."

Theodor Adorno

Have we truly learned nothing? Must we make the same mistakes over and over again?

These 49 percent include for the most part the elderly, students, the working poor, soldiers and their families, and the disabled.

These 'handouts' include Social Security and unemployment insurance which people have paid for when times were good. The ranks of the working poor have swelled for sure, because of a financial collapse brought on by unfettered greed and fraud of Wall Street, and a stagnant real median wage for the past 20 years in the face of rising costs, often driven by monopolies, fraud, and cartels.

A kleptocracy is sucking the life out of working men and women by force and fraud. A group of sociopaths, who have committed one of the great crimes in history, not only blithely walk away with their loot unpunished, but come back to rob their victims once again, to finish the job. And they gorge themselves on the public trust even while begrudging the widow her pittance, or trying to steal it.

They pervert and corrupt so many, filling their hearts with their passionate lies, appealing to what is the very worst in them. They are truly a den of vipers and thieves.

You can believe what you will, but you will be held responsible for your beliefs, and your actions, what you do and do not do.

And finally, it takes a comedian to stand up and say it. "Shame."

Source: Reuters

Update on the Gold 'Shadow Chart' - Review of the 'Cup and Handle' Formation

A "Cup and Handle" is a bullish continuation pattern in an uptrend. 

 

The greatest factor working against this current gold chart as a cup and handle is that it appears during a consolidation pattern in a broader uptrend. 

The 'cup' is best shaped as a "U" and the broader the bottom the better.

The 'handle' is a retracement when the right side of the 'cup' reaches its prior highs. The handle often resembles a bullish pennant.

The retracement usually does not exceed 1/3 of the advance of the cup to its second high, but can go as deep as 1/2 in a volatile market.

Here is a textbook picture of a 'cup and handle formation' from Investopedia.

Below that is the chart in progress of a cup and handle in gold that proved to be quite successful.

Here is the current daily chart of Gold. As you can see there is a possible cup formation. It will not be confirmed until we see a successful 'handle.'

I cannot stress this enough.  It will be in the nature of any 'handle' that is formed that the cup and handle formation can be confirmed.

Until then there remains the very real possibility that this will develop into a mere trading range between 1800 and 1550.  Gold may also hit the 1800 level and after some consolidation break away and just keep going higher.

 

The more I look at the possibilities the more I become convinced that this is just a long consolidation in a bull market.  That implies a breakout and breakaway to the next target price.   We cannot tell if it will break out on this attempt at the top of the range.  This is the third major attempt.  It does have the winds of QE3 at its back.  But there is significant trouble in the global economy that may pose a risk to all asset prices.  

And of course the western central banks have a vested interest in keeping the price of gold 'orderly' so it does not impair the confidence in their paper games of QE to ∞.

 One way to make yourself look good is to diminish the competition.  They have to be careful of being too heavy handed because at some point intervention becomes 'machine-gunning the lifeboats.'  Therefore it is likely that they will have someone else holding the gun, some favored bank or hedge funds.

I do not know what will happen.  No one does.  But we know what to look for.

Gold Daily and Silver Weekly Charts - A Look At Precious Metal ETFs - Split Right Ball Curl On Ben

The line is being held as I said yesterday. 1800 is the next 'first down' marker for gold, if they can cross it and hold it. Silver *could* lead the way, but that might look more like a deep pass to midfield.

Ben Davies thinks that the next move in gold can be big. I think he might be right IF they can break and run with it past the prior highs. And that is a big if with Ben and his extended team of thugs throwing cheap shots all over the field and 'managing' the scoreboard. This sometimes seems like The Longest Yard. Maybe its time for the bulls to call Split Right, Ball Curl on 1. Heads up Ben.

Here is some commentary from Lauren Lyster on the use of ETFs in the precious metals markets.

"Investors can gain exposure to precious metals using ETFs. Specifically, Gold and gold miner ETFs have become increasingly popular. But if you buy shares in a gold ETF like the GLD for example, the largest gold ETF in the world, do you actually own gold? The answer is NO. You are effectively buying shares in a fund indexed to the gold market. This is not the same thing as buying physical gold bullion and storing it in allocated vaults, a key distinction.

Also, in the case of GLD, the Trust does not insure its gold. Which means it may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed. And this may surprise you when reading the prospectus as we have. According the prospectus for GLD:

"The amount of gold represented by the Shares will continue to be reduced during the life of the Trust due to the sales of gold necessary to pay the Trust's expenses irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of gold....

Gold held in the Trust's unallocated gold account and any Authorized Participant's unallocated gold account will not be segregated from the Custodian's assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant."

So if the custodian- in this case HSBC- runs into trouble, it may not be able to make good on your claim."

Here is a graph showing the long and short positions in silver futures.