Gold Daily and Silver Weekly Charts - Option Expiration Tomorrow - How To Manipulate a Market

There will be an option expiration tomorrow for precious metals on the Comex.

Gold and silver were hit in the classic contract dump early on in the New York Trade.

Surprisingly the US dollar also fell.   Stocks tried to stage a rally but faded badly and fell into the close.

I wanted to take a moment to give the reader a little better view of the paper precious metals landscape into year end.

In the fourth chart below you can see the Comex gold contracts listed, with their volumes.  As you can see the most active contract remaining is December.  It will be the next active month.   There is some minor activity in October because of the options activity.

The fifth chart shows the silver contracts.  There the most active contracts are September and December.

So, if tomorrow is the option expiration for the September contracts, we would expect to see the action become more pivotal for silver, since silver is going to be an active month for that contract.

Gold, not so much as the active month fades.  But that does not mean that gold will become quiet, except perhaps at The Bucket Shop.   There is clearly a huge market for gold, and the exchanges in the East will keep buying and delivering large amounts of bullion.

Lastly I show the small amount of 'delivery' at the Comex in gold yesterday in which Goldman was most notable taking 4400 ounces worth of contracts for their 'house account.'

Let's see what happens as we work our way through the option expiration tomorrow, and also see how the equity and bonds markets keep digesting this disruption in their long climb to bubbledom.

Honest markets are not a nicety; they are a necessity, a sine qua non for productivity and prosperity.

The appalling lack of reform in the Anglo-American markets is extracting a heavy price.   We may not see it, we may be distracted and befuddled as to the true nature of things.  We may be deluded, and blinded to the true nature of our involvement and actions with the global markets.

The rest of the world may not be so similarly inclined.  And therein we have the basis for the currency war.

And finally at the end there is a brief video from Jim Cramer about how one goes about manipulating markets like stocks and commodities.  You move prices up, and then you smack them lower to create negative sentiment.

You spread stories and biases with the media.   You abuse the market system under the noses of regulators with the acquiescence hopefully of your fellow professionals, wreaking carnage on honest people and the real economy.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Whiplash

US equities came in roaring this morning, with punters buying the dip with abandon.

Alas, it was not to be.

The rally faded badly into the afternoon, and the equity futures ended up in a classic whiplash reversal of an attempted 'dead cat bounce.'

So what next.

One thing is that the Fed is probably, if they are wise, taking any idea of a September rate increase off the table.

Not that a 25 basis point increase would make much difference.   The Fed has distorted the real economy badly, and created a formidable asset bubble in paper, and a systemically dangerous financial sector through policy errors and malign regulation .

No they won't do it if the markets are still wobbly because they do not want to do anything visible that could be pointed at later when the search for a scapegoat begins, like the last time, with furious words and much fake anger by the wise men of Capitol Hill.

Today's action was not encouraging since almost everything went lower.   We might have to spend a little time at these levels, allowing things to consolidate, before the bulls and their pals in the banking sector begin to attempt to reinflate this pig.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

When the suffering becomes visible and the reaction strong and widespread enough, perhaps change will come.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Comex Option Expiration on Wednesday

Stocks took a beating today, particularly in the HFT trading of the first hour that saw the DJIA down over 1,000 points.

I think the 'fragile' underpinnings of these paper asset markets became all too clear this morning.  And they have not changed, not one bit.

Gold initially caught a stiff flight to safety, but was hit with selling even as the stock market saw a remarkable bounce off its bottom. How unusual.

The US Dollar was certainly no safe haven today as it slumped to a seven month low.

Silver is going to be a pivotal player I think, moreso in the next month than now in this inactive month of August.

Gold is now outperforming the SP 500 for the Year-To-Date. See the chart below. How about that for pet rocks. Both are lower priced in dollars. Gold has been rallying in most other currencies.

The Fed's Lockhart came out this afternoon in a speech on the West coast and reiterated his opinion that the Fed would raise rates this year, although he waffled a bit on his prior certainty. I would say that September will be off the table unless stocks can rally higher and make people forget was the underside of an asset bubble looks like.

There was very little action in The Bucket Shop on Friday, with no deliveries and little warehouse movement as shown below. Its a funny month that started off with big buys in gold, almost clearing out the available inventory, and then a big lapse into nothing.

Let's see how China and Europe trade overnight.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Dazed and Confused By Financial Gimmickry

The US equity markets took a swan dive on the open, with a first hour of trading dominated by flash crashes and algo-driven volatility.

As noted previously, the composition of these markets is very fragile, and open to a cascading waterfall decline.  We can lay the responsibility for this right on the shoulders of the Fed, the regulators, the exchanges, with some help from a servile media.

And this is far from over.  The worst thing we can see now is a sharp rally back up with no change in the attitudes and connections to the real economy.

The dip was bought in part on a message from AAPL's Tim Cook to CNBC's James Cramer assuring him that their sales are proceeding briskly in China.

When Mr. Cramer shared this message online it helped to trigger a reversal in Apple which in turned triggered a rally off the bottom that lasted into the European close. Alas that was not to last, and stocks slumped anew as the dip buyers were suckered in, and stocks continued to slump into the close, albeit not at the lows of the opening bloodbath.

Today's commentary on the financial networks was just-- ridiculous.  They were pounding the table to buy the dip.   They were incredulous that the stockmarket could decline.  They were frightened and yet defiant.  And most of what they had to say was useless.

I am not sure we saw an actual capitulation today.  I have seen capitulations in selling, and this one did not quite feel right.  I think a good part of it is that these markets are dominated by computers, and much of the trading is not human, but algo-driven.  The first hour seemed more like a big flash crash than real selling.   And the rally back had a similar character.

We now are in the solid correction phase. I have noted the percentages on both of the charts below.  Both the SP 500 and the NDX futures tagged mid teen declines off the highs as they both fell out of their symmetrical triangle topping patterns.

Let's see how China does overnight.  This seems to be the big driver.  This notion of American exceptionalism and its singularly robust economy is so much baloney.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

Gold was functioning as a 'safe haven' this morning as the Dow Jones Industrials opened down 1,000+ points.

Silver was hit.  I bought a little more to add to the new position from last week.

Stocks recovered from their early losses into the European close.

 Let's see how the trading closes in New York this afternoon ahead of another day's trading in China.

The Street crawlers on the financial networks are pounding their desks for the public 'to buy the dip.'

Gold and silver were hit after the morning opening and will likely go out lower on the day.

I would be slow to do something like that.  Very slow.

China On Track For a Record Year For Gold Bullion Withdrawals From the Shanghai Exchange

In the latest week 65.3 metric tonnes of gold bullion were withdrawn from the Shanghai Gold Exchange.

Comparing the yearly demand at week 32 for China with prior years shows that it appears to be a record year in the making with 1,585 tonnes so far.

So much for the 'weak demand' in China.