17 November 2017

Stocks and Precious Metals Charts - The Willful Mispricing of Risk


Today was a stock options expiry.

Gold and silver rallied smartly, back up to the levels where they roughly were before they were bushwhacked on the Comex into the FOMC meeting and Non-Farm Payrolls boogie woogie.

I guess the theory that this smackdown of gold to retest 1270 earlier this week was a gambit ahead of stock option expiry was tradeable.

We are in a new era. I am hearing this on TV and in comments and on chat forums.

We are in an era where risk has been abolished by the central banks and their free money. So there is little difference between prime and subprime, between 2 year and 10 year Treasuries, and between stocks and bonds.

According to some of the Pied Piper pundits stocks are better than riskless cash, because stocks are going to keep rallying forever after, and cash is trash.   Buy buy buy, and don't be left behind.

This is the kind of mantra that the sell-side and the wiseguys of the Street too often resort to when they are taking profits from their pool after a big price run higher, and unloading mispriced junk on mom and pop, through the funds and institutions.

Once the selling starts in earnest, and it will beyond any doubt at some point, by whatever event that may happen to trigger it, this is going to get ugly very quickly.  But this is the system that we have today.  This will be the third bubble and bust since the repeal of Glass-Steagall, one of the highest funded PR and political campaigns in modern history.

And no one could have seen it coming.

Who runs Bartertown?

Have a pleasant weekend.


16 November 2017

Stocks and Precious Metals Charts - Rally Monkeys Away


US equities rallied today on the earnings report from WalMart, and an excess of hot money with nowhere productive to go.

Today was characterized as a great time to buy the dip, which occurred earlier this week.

Stocks are a buy because corporations are enjoying record profits, which they mostly spend on dividends, boondoggles, monopolization,  and tax buybacks.

Quick, give those folks a tax break!

Tomorrow will be a stock options expiration.

The House passed its version of 'tax reform' today. It will have to be reconciled with reform from the Senate.

The yield curve differential between the 2y and 10y treasuries continues to flatten, with some suggesting it will go to '0' next year.

This is a signal of an oncoming recession.  The other data suggests that the US consumer is 'tapped out.'

The Fed says that healthcare is contributing to the lack of inflation.  Seriously?

How do you know when Paul Ryan is lying about tax reform being done for the average American?    His lips are moving.

How does Paul Ryan know when he is lying about tax reform?   He doesn't care.

I agree with Jeffrey Gundlach's recent observations about the carried interest rule in the tax reform legislation, and that the swamp is not being drained— it is getting larger.

Sow it; reap it; eat it.

Have a pleasant evening.





15 November 2017

Stocks and Precious Metals Charts - Stock Options Expiration on Friday - As If Maybe Someone Could Hear


We will have a stock option expiration on Friday.

I believe that this is driving some of the action in the precious metals.

Not in the metal itself, but by extension to the miners which follow the price of the metals, and tend to be a favorite of options players, and a rather volatile crew.

Have a pleasant evening.





14 November 2017

Stocks and Precious Metals Charts - The Wild Life


Luca Signorelli. The Deeds of the Antichrist
"You may be sure that no sordid compromises nor carrying of waters on both shoulders will see you through.  Those who have the faith had better keep in the state of grace, and those who have neither had better find out what they mean, for in the coming age there will be only one way to stop your trembling knees, and that will be to get down on them and pray.  The most important problem in the world today is your soul, for that is what the struggle is about."

F. J. Sheen


"He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft.  He shows you how to become as gods.  Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J.H.Newman, The Times of Antichrist

Stocks have been showing an interesting pattern, of rolling over and falling in the morning, and then rising again in the afternoon, led by purchasing of the SP futures it appears.

And gold and silver and the VIX and the other havens and alarms of risk are being capped and suppressed, as is also visible on the charts.

We will see what the Consumer Price Inflation data has to say about things tomorrow.

Duc l'Orange will be back, and he promised even more fabulous news of his achievements.

The corporate wing of the Democrats and their enablers are incapable of thinking of anything but Russia, and how it must have surely stolen their dreams of power ascendant. If you step back and listen to them, they are as ridiculous as any of the true believers on the Right whom they despise. MSNBC has become as unwatchable to me as Fox News. And that is too bad.

How can we trust the corporate 'mainstream media'?  Only by dismissing and forgetting episodes such as thisthat occurred on the Clinton administration's watch by the way. 

The glorious 'tax reform' toddles on, bringing even greater benefits to the corporations who are already enjoying record profits, which they assiduously funnel into dividends and self-enriching stock buybacks.  Wages and well-paying jobs, not so much.  But their hirelings serve Mammon well, forsaking all others.

Sed libera nos a malo.

Have a pleasant evening.





13 November 2017

Stocks and Precious Metals Charts - The Great Complacency


"In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousand fold in the future.   When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.”

Aleksandr Solzhenitsyn, The Gulag Archipelago

Stocks were largely unchanged today, as the lack of news left investors spinning around last week's levels, trying to squeeze a little coin out of the markets.

Gold and silver managed to make a little headroom, although they are still lower after the big 'Dr. Evil' smackdown last week in which a large volume of metal was dumped at market with the design of cracking the price lower and 'running the stops.'

We will be getting quite a bit of economic data this week. I have included the economic calendar below. PPI and CPI should give us a look at the inflation that the Fed is pushing against by raising rates, or not.

And all eyes are on Washington while Duc l'Orange is wowing them in Asia. The Senate and House have both crafted versions of the 'Tax Reform' legislation that the corporate world awaits with bated breath.

Have a pleasant evening.