Gold Daily and Silver Weekly Charts - Stock Option Expiry Friday, Comex Options Next Week

"What is the Democratic Party’s former constituency of labor and progressive reformers to do? Are they to stand by and let the party be captured in Hillary’s wake by Robert Rubin’s Goldman Sachs-Citigroup gang that backed her and Obama?

The 2016 election sounded the death knell for the identity politics. Its aim was to persuade voters not to think of their identity in economic terms, but to think of themselves as women or as racial and ethnic groups first and foremost, not as having common economic interests. This strategy to distract voters from economic policies has obviously failed...

This election showed that voters have a sense of when they’re being lied to. After eight years of Obama’s demagogy, pretending to support the people but delivering his constituency to his financial backers on Wall Street. 'Identity politics' has given way to the stronger force of economic distress. Mobilizing identity politics behind a Wall Street program will no longer work."

Michael Hudson

December is historically a big month for gold on the Comex, and this year looks to be no real exception.

The precious metals have been getting knocked lower in the Dollar crosses by paper traders who look at them as a currency with some perceived equilibrium with respect to the currency per se.

Put more simply, they are trading gold and silver as emerging market currencies, and running them contra the Dollar which is still the heart of the global financial establishment.

This can run for some time. When I did studies in the past, multi-linear regression analysis across a wide range of variables, I found that this contra-dollar correlation for gold in particular could last for long periods of time.

However, there are other periods in which gold moves in other ways without respect to this negative dollar correlation.

This caused me to suspect that the real correlation is more complex than a simplistic linear pricing model.

But what the heck, let's just see how long this strong dollar, higher yields on bonds and lower precious metals trade can go. Typically the forex crowd are paper traders using astronomical leverage. And they always tend to 'overshoot' their trends, and suffer sharp correction.

So all that being said, let's watch the charts and see which way we go, from what is clearly a short term oversold situation. It could become moreso. Or not.

In the intermediate to longer term I still believe quite strongly that the market is going to implode from an excess of leverage and a lack of primary assets backing those claims. And it could be quite impressive.

I am also quite concerned about the rise of civil disobedience and protests of the sort we have not seen in the US in many years. I have to admit that I am somewhat relieved that Hillary and her neo-cons have been tossed.

But it is far too early to have much confidence in Donald Trump and his advisors, whomever they may eventually be.  I have completely lost confidence in the wisdom and restraint of the 'ruling elite' and their enablers.   And that does not bode well for anyone.  So one takes measures.  Hence alternative currencies.

So here we are.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Stock Option Expiration This Friday

As a reminder there is a stock option expiration at the end of this week.

The stock market has been buoyed by whomever, for whatever reasons,  since the Trump election last week.

I suspect that it will be running out of gas, about now.  But let's wait to see it reach its apogee.

There are some big changes, and likely some shocks coming.  

Not a good time for the Fed, which has been in the long term confidence, bubble-blowing game far too many years now.

Let's allow Trump to show his true colours in his appointments.  I am trying to ignore most of the rumours, some of which are calculated to alarm people perhaps.

Have a pleasant evening.

Just Charts At 3:30 - Good To Me

"When is a crisis reached? When questions arise that cannot be answered."

Ryszard Kapuscinski

And it is also when the excessive leverage of a financialized market begins to implode, as the holders of claims discover that they have been the unwitting victims of misrepresented counterparty risks.

I am upgrading my computer and I am going to have to spend a little time on that one, getting some software and applications that are misbehaving sorted out.

The US dollar was on another tear higher today, and so we saw some weakness in the precious metals.

The bonds, especially the longer dated ones, have been getting beaten up of late. No real surprise there as they were caught up in a mispricing of risk, or in plainer words a bubble, for quite some time, compliments of the Fed.

Stocks were mixed to lower, with the usual suspects showing some resilience in the SP, not so much in the NDX which is tech heavy.

This 'flight to risk' which we have been seeing since the election is acting heavy now, and may be coming to an end.

I have taken money out of cash and put it back into the metals, and selectively in the miners, over the past two trading days.

See you tomorrow.

Have a pleasant evening.

Thomas Frank: Clintons Led the Democratic Betrayal of the Average Working American For Big Money

"There are two theories of prosperity and of well-being: The first theory is that if we make the rich richer, somehow they will let a part of their prosperity trickle down to the rest of us. The second theory — and I suppose this goes back to the days of Noah — I won't say Adam and Eve, because they had a less complicated situation — but, at least, back in the days of the flood, there was the theory that if we make the average of mankind comfortable and secure, their prosperity will rise upward, just as yeast rises up, through the ranks...

We so easily forget. Once the cry of so-called prosperity is heard in the land, we all become so stampeded by the spirit of the god Mammon, that we cannot serve the dictates of social conscience. . . . We are here to serve notice that the economic order is the invention of man; and that it cannot dominate certain eternal principles of justice and of God...

The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."

Franklin Delano Roosevelt

You can fool all of the people, some of the time. You can fool some of the people all of the time—  but you can’t fool all of the people all of the time.