23 March 2018

Stocks and Precious Metals Charts - The Darkness Deepens

Those Mischievous Rascals in NY and DC
Stocks sold off again today in a big way.

They were able to stabilize the markets this morning, led by buying of the SP 500 futures, long enough to shove the Dropbox IPO out the door, and even gain a bit off the initial pricing.

But alas, the happy go lucky bully boys were not destined to carry the day into the weekend.

Stocks sold off rather hard, led lower by big tech and financials, especially on increasing volume into the last two hours in the close of the markets in the US.  Just as they had done yesterday.  Oh my.

The US Dollar was weak, which was surprising for Larry Kudlow's 'King Dollar.'

Gold and sovereign debt caught a bid, in what was definitely a flight to safety trade that was hard to miss. No idea why it did not show up yesterday, but another day of stiff selling had the punters running to escape the pain.

Few things stand up to a panic like gold, held in a manner without undue counterparty risk.

There will be an options expiration on the Comex on Monday for April gold and silver.

Trumpolini pulled a rather self-absorbed stunt by threatening to veto the Omnibus Spending Bill at the last moment before the weekend after the Congress had gone home.   Especially since he and his minions were not caught by surprise by anything in it.   It did stir up the market confidence a bit more, but probably played well with his base's baser instincts.

And the band played on.

Next week should be interesting.

Have a pleasant weekend.

22 March 2018

Stocks and Precious Metals Charts - An Apéritif to a Banquet of Consequences - Dow Industrials Drop 700+ Points

"What is most offensive is not their lying— one can always forgive lying— lying can be a delightful thing, for it leads to truth.  What is offensive is that they lie, and worship their own lying."

Fyodor Dostoevsky, Crime and Punishment

“A true opium of [worldly] people is a belief in nothingness after death— the huge solace of thinking that for our betrayals, greed, cowardice, and murders that we are not going to be judged.”

Czesław Miłosz

Stocks continued selling today. What was particularly discouraging for the bulls is that there was no afternoon rally.   In fact, the selling accelerated in the last hours of trading, and the major indices went out on the lows, and on heavier volume.

One might point to the new tariffs to come on China, and fears of a trade war. Earlier this week one would look to the Fed, and talk about the rising interest rates, probably the most carefully telegraphed monetary decision in history.

Perhaps it was the latest antics of Facebook, in the general growth of the abuse of privacy of the public by government and their corporations. One might also look to the dysfunction in Washington, and the misguided policies that have been crippling the middle and lower classes to the advantage of the one percent.

Let's skip the usual bullshit exercise of identifying the reasons for this sell off for the moment shall we?

Certain financial assets, like the major stock indices, led narrowly by the FANG tech stocks and the financials, had been lifted to new heights by what certainly looked like the utter mispricing risks.

And as we have seen in the last two asset bubbles and subsequent financial crises, prices continued rising to even greater over-valuations.  They were lifted on a cloud of misrepresentations and  the purposeful weakening of transparency and regulation, from the purveyors of stocks and their many purveyors of the big lie designed to support the economic status quo.

As I have cautioned,  when this mispricing of risk continued to expand,the 'trigger event' needed to knock the market off its blocks would decrease in required magnitude, until something incidental, or a cluster of rather minor incidents, would be enough to send prices down, and with a vengeance.

So far this latest market decline is what I would call a 'market break' and not a 'crash.'   As a reminder, there was a disquieting market break in March 1929 that was quickly forgotten, until the market breaks of September, culminating in a bloody October.

The Father of Lies
It will not take much for some semi-official group to turn the markets around by buying the SP 500 futures at a key moment.  There is not much fundamental stock picking in this market;  it is all index ETFs and narrowing momentum.

Buying the futures to turn things around could be done by the Fed or some other NGO that is working with their compadres of the revolving door.   One group wants to get rich, and the other wants to not be run out of town on a rail. 

That has been a 'go to' solution since the mid-1990's. It is very possible that stocks will find a bottom, perhaps in a true selling capitulation, and then turn and run back up to perhaps a new high later this year, led by the usual suspects and their aficionados.

But if there is no financial reform, if there is no return to good governance and honesty in the major mechanisms of the financial system which, after all, is the capital allocation heart of any capitalist economy, there will once again be a crash, a staggering correction in prices, for the third time since the year 2000.

There was a very minor flight to safety today. The US Dollar managed to drift slightly higher within its recent trading range. And in the usual manner of the recent currency trading of the precious metals, gold and silver were off a bit in response.

And let us not forget that there will be an option expiration for gold and silver on Monday.

Government bonds caught a bid, which was a bit odd in this interest-raising environment needed because things are just that good in the real economy right?   We certainly don't want any overheating, as in higher wages for working people.

Wall Street will be dropping another IPO into the markets tomorrow in Dropbox, unless they call it off for reason of market conditions.    I suspect that they will try to stabilize the markets while Wall Street squeezes this latest creation out.

This is not going to end well. But if we get another rally, all of this gloom will be forgotten, and it will be bread and circuses and the latest scandals of the rich and frivolous all over again.

And when it really hits the wall, when the financial system is thoroughly knackered, we can always blame Trump, or Russia.

Have a pleasant evening.

21 March 2018

Stocks and Precious Metals Charts - Providence, the Hidden Hand

"Wonderful providence indeed which is so silent, yet so efficacious, so constant, so unerring.  This is what baffles the power of Satan.  He cannot discern the Hand of God in what goes on; and though he would fain meet it and encounter it, in his mad and blasphemous rebellion against heaven, he cannot find it.

Crafty and penetrating as he is, yet his thousand eyes and his many instruments avail him nothing against the majestic serene silence, the holy imperturbable calm which reigns through the providence of God."

John Henry Newman, Parochial Sermon 17

Unless you were buried by a snowdrift you know that the Fed did the expected today, increasing their benchmark rate by 25 bp and maintaining their vectors for three interest rate increases this year, and two next year.

There was some feeling based on remarks in their statement that the Fed was signaling a bit more hawkishness based on increasing employment levels and a recovering economy. This also sparked some indications that three rate increases for this year are fully priced in, and the possibility for a fourth has increased somewhat.

Gold and silver, which had been showing some perkiness, took off higher, rallying quite a bit more than our most recent experiences.

And conversely the Dollar took a swan dive, at least for the day. I have posted a chart of that action below.

However, it should be noted that in the bigger picture the Dollar and the Metals are still just wriggling around in trading ranges. While there is some real potential on the charts, that potential has yet to be confirmed.

Bonds rallied, perhaps because the hawkish of the statement was snot as much as expected, and it was tempered even more by Jay Powell in his press conference.

Oil rallied along with gold and silver, helping boost the commodities.   There was another larger than expected drawdown in oil supplies.

It has been announced that Trumpolini will be announcing  new tariffs aimed at punishing China for their transgressions in abusing US corporate Intellectual Property rights.  It could be important to watch how China responds.

For today those who were positioned well can take some comfort from the results.

And for all those many more who don't chase the wiggles, but hold on for the longer term, things continue unwinding, slowly but surely, with much that can give them some rightful optimism.

There will be a stock option expiration for the precious metals next Monday the 26th. I have included that calendar below.

Let's see how the rest of the week unfolds.

The nor'easter, which has been passing through all day, is under-achieving itself so far. But the snow is now sticking, slowly but surely, and the forecasters are saying that we are in for heavier bands of snowfall from a bit later for about six hours. This is how the other nor'easter also worked its devices— deceptively slow to start, and then all in a rush.

As for me, I have the young man to assist me, and a very capable snowblower at the ready. And from her serene perch indoors, Dolly views all this with her usual disdain for all things that are snow or rain.

Have a pleasant evening.

A Breed Apart Without Conscience - Psychopaths and Systemic Crisis

Psychopaths are social predators who charm, manipulate, and ruthlessly plow their way through life, leaving a broad trail of broken hearts, shattered expectations, and empty wallets.  Completely lacking in conscience and in feelings for others, they selfishly take what they want and do as they please, violating social norms and expectations without the slightest sense of guilt or regret.

Psychopaths often come across as arrogant, shameless braggarts—self-assured, opinionated, domineering, and cocky.  They love to have power and control over others and seem unable to believe that other people have valid opinions different from theirs.

What makes psychopaths different from all others is the remarkable ease with which they lie, the pervasiveness of their deception, and the callousness with which they carry it out.

The most debilitating characteristic of even the most well-behaved psychopath is the inability to form a workable team.

The majority of people and therefore workplaces are easy prey, because we still want to believe that people are inherently good.  We don't really want to believe that such people exist...Wherever you find money, prestige and power you will find them.

We are far more likely to lose our life savings to an oily-tongued swindler than our lives to a steely-eyed killer.

Robert D. Hare, Without Conscience

And this is why people must come together, to create a system of laws and transparency, of checks and balances, of objective oversight.

It is difficult to believe that we have to remind otherwise intelligent adults, who might be temporarily, but too often enthusiastically, blinded by some utopian ideology too often crafted by devious intents, that not everyone is good, law-abiding, and honest.