Stocks and Precious Metals Charts - Correctomundo - Unanswered Questions - Walk Down Memory Lane

 

"The [unanswered] questions include why does silver have the largest concentrated short position in terms of real-world production of any other commodity?  Next is why have the big shorts always been allowed to add as many new short positions as needed to cap the price and then buy back those shorts on lower prices? This is not allowed anywhere but on the COMEX. Finally, how could the 4 big shorts being the sole short sellers into the price rally into Feb 1, not show that these traders capped the rally? All while the physical silver market had never been tighter. I believe these are the only legitimate questions that matter." 

Ted Butler, May 12, 2021, The Questions No One Has Legitimately Answered

 

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” 

Upton Sinclair

 

The CPI came in much higher than expected this morning, causing the markets to sell off briskly on concerns about inflation and the Fed posture towards interest rates. 

The Dollar rallied on the expectations of higher interest rates. 

Gold and silver retreated. 

Stocks sold off fairly sharply and steadily again, going out near the lows. 

As a reminder there is still an open gap around 4000 level, lower than the close of the SP 500 today.

PPI tomorrow will give us a look at the wholesale inflation picture. 

Personally I do think this is a sign of an uneven recovery from the Covid shutdown. 

The results of the CPI were heavily skewed by just a couple of factors that are not likely to repeat over time. 

But fear sells clicks.

And facilitate the wash cycle of a valuation wash and rinse adjustment.

Have a pleasant evening. 

 

 

 Here is a blast from the past. I remember almost every one.  Some I have not thought about in years.

 We only had three black and white channels to watch back then.   So choices were limited.

 

Stocks and Precious Metals Charts - It Can't Happen Here - And No One Can See It Coming

 

"The time is almost here — and ignorance, falsehood, cruelty, greed and lust of power were never stronger in the hearts of any ruling class in history than they are in those who constitute the Invisible Government of America today.  Day by day the money-masters of America become more aware of their danger, they draw together, they grow more class-conscious, more aggressive. 

The [first world] war has taught them the possibilities of propaganda; it has accustomed them to the idea of enormous campaigns which sway the minds of millions and make them pliable to any purpose. American political corruption was the buying up of legislatures and assemblies to keep them from doing the people's will and protecting the people's interests; it was the exploiter entrenching himself in power, it was financial autocracy undermining and destroying political democracy."

Upton Sinclair, The Brass Check, 1919

 

“Booms start with some tie-in to reality, some reason which justifies the increase in asset values, and then — and this is the critical feature of speculative mood — the market loses touch with reality.” 

John Kenneth Galbraith

 

“A country that tolerates evil means—evil manners, standards of ethics—for a generation, will be so poisoned that it never will have any good end.” 

 Sinclair Lewis, It Can't Happen Here 

 

"Everyone knows that plagues have a way of recurring throughout history, yet somehow we find it hard to believe in the ones that crash down on us out of the sky. There have always been plagues and wars, yet they always take us by surprise. When war breaks out people say it's stupid and won't last long. Stupidity has a knack of getting in the way, which we would see if not wrapped up in ourselves. In this our townsfolk were like everybody else— they did not believe in plagues." 

Albert Camus, The Plague

 

Stocks were hammered in the morning trade, purportedly over concerns about inflation.

Comments from Stanley Druckenmiller about the status of the Dollar contributed to the selling. 

Gold and silver were also caught in the early selling.

However, as the day wore on, the dip-buyers came in, buying up precious metals until they went on to close with decent gains.

I joined a bit in the early dip-buying.  I had waiting for a pullback like this.

Big cap tech also recovered significantly in the afternoon.

The  rest of the equity market not so much. 

I would presume that traders will be watching the consumer inflation data out tomorrow morning.

Have a pleasant evening.

Stocks and Precious Metals Charts - Risk Off

 

"Monetary and regulatory policy encourage asset bubbles to proliferate.  Hot money seeks out the conscious mispricing of risk.  Capital, in the form of both money and personal talent, increasingly flows into malinvestment and the gaming of markets.

The productive economy languishes, left wanting for the lack of creative resources and attention.  The bubble rises to unsustainable valuations— and fails, and a nation's capital is consumed." 

Jesse 5 August 2019, The Men Who Sold the World

 

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. 

Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy. These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry. 

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism." 

Charles Ferguson, Predator Nation

Stocks moved sharply lower after some rose to new all time highs in the morning. 

Declines were led by the big cap tech bubble. 

The crypto bubble, or ponzi scheme, deflated a bit. 

Gold was up slightly as silver edged lower. 

The Dollar was unchanged. 

The VIX was higher. 

In a liquidation event everything declines.   The object at that point is survival.

I am taking a little break, and my trading account has been sitting in cash since Friday. 

My long term position are just as they have been, for years. 

The commodity of greatest concern to these financial markets is the supply of greater fools.

Let's see what happens. 

Depending on how things go I may trot out a few charts showing how various assets perform in deep corrections. 

How America Became the Money-Laundering Capital of the World.

Have a pleasant evening. 

 

Stocks and Precious Metals Charts - The Leader of the Pack

 

"Look out! Look out!  Look out! Look out! 
I felt so helpless, what could I do?
Remembering all the things we'd been through
In school they all stop and stare
I can't hide the tears, but I don't care
I'll never forget him— the leader of the pack."

Barry, Greenwich, Morton, Leader of the Pack

 

"The markets traded as though they are anticipating a weaker than expected number, which will be dovish and friendly for maintaining lower interest rates."

Jesse, 6 May 2021 

 

Bingo.

The Non-Farm Payrolls number posted a huge miss, with downward revisions in the prior months.

All the better to justify stimulus for the economy, my dear.

And so the markets took off higher.

And forgotten was the cautionary statement from the Fed at the close of trading yesterday.

Hey, but we warned them, right?

Gold finished solidly, and silver held much of its gains.

The Dollar headed lower on expectations of more easing for longer, aka low interest rates.

The SP soared to a new high, while the tech heavy NDX gave back a chunk of its early gains.

Let's see what the new week may brink with the inflation numbers.

Have a pleasant weekend.