Showing posts with label futures. Show all posts
Showing posts with label futures. Show all posts

Sunday, May 17, 2020

WEEKEND WRAP: Stocks Split, Dow Suffers; Gold, Silver May Be Headed For Record Prices

The week just past was not a particularly enthralling one for stock investors, as the Dow and NYSE Composite took it on the chin while the S&P and NASDAQ put up fractional, unsubstantial gains.

As economic and COVID-19 developments were concerned, it was mostly politicking over substance, as President Trump backhanded Dr. Anthony Fauci, head of the CDC, over predictions related to states' reopening their economies and the potential for a second wave of the virus in the coming fall or winter.

For the most part, stocks refrained from further insane advances, though the gains toward the back end of the week reeked of malingering by the Federal Reserve, moving stocks off their lows into green territory in both Thursday and Friday's sessions. With the Dow Jones Industrial Average forming a pretty obvious short-term head-and-shoulders pattern, the equity markets are set up for a breakout either higher or lower, though the least resistant path may be down another six to eight percent over the next week to two weeks. With the traditional third Friday of the month options expiry in the rear view mirror (May 15), the markets will need some kind of catalyst to move forward. Otherwise, expect the Dow and NYSE Composite to both head back below the bear market defined level of -20 percent.

If that were to happen, the NASDAQ, already ridiculously valued, and S&P should fall in sympathy with the Blue Chips.

The week was a very solid one for oil, though the June contract is set to expire on Tuesday (May 18). Producers do not want to see a repeat of the May futures expiration when the price went negative and buyers were being paid to haul oil off to the tune of $41 a barrel.

June futures closed last Friday (May 8) at $24.61 a barrel and this week at $29.43. Monday will likely give a signal as to whether another collapse is imminent, though with US states and most of Europe reopening their economies, it would appear that the massive glut has at least partially abated and demand is rising. There is still no open air for the futures to fly in, however, as the spread between the current month all the way out to the December 2021 contract is pretty slim. 35.78 is the last quoted price for December 2021.

Yields on treasuries continued lower through the week and are presumptuously headed below zero, into the brave new world of negative rates. With the two-year yielding 0.16% and the five-year at 0.31, it would seem only a matter of when, not if rates go underwater. With deflationary forces at work, the low yields on short-dates bills and notes may be attractive as a hedge against asset price declines. Yields cannot fall much more from these levels before going negative in real terms. Those seeing inflation ahead could easily be urged into paying to hold capital.

Gold and silver absolutely exploded this week on eBay, a market where true price discovery can be ascertained.

For the first time since Money Daily began tracking prices a month ago for one troy ounce gold and silver coins and bars, one ounce gold coins sold for more than the all-time record closing spot price ($1895.00, September 5 and 6, 2011) on an average and median basis. The average price for a one ounce gold coin on eBay was $1,917.41, and for a one ounce bar, $1,898.62. Buyers are looking at a premium of over $150 for either coins or bars. Notably, smaller denominations of gold coins and bars (1/10 ounce to 1/2 ounce) are routinely selling at prices that relate to over $225 per ounce.

These actual sale prices are in stark contrast to the easily-corrupted gold COMEX prices where gold closed with a bid of $1742.20 on Friday afternoon.

Silver also showed enormous gains over last week as the average price of a one ounce coin gained from $30.50 on May 10 to $33.71 this Sunday. Price appreciation for silver bars was even more dramatic, gaining from last week's average price of $26.77 to $34.57 this week. That is more than double the COMEX paper silver price bid of $16.61 as of Friday's close.

We employ the same methodology, looking at the most recently-closed sales on eBay, eliminating any coins or bars that may have numismatic or collectible value as best as possible to come up with a standard, reliable price tracking model.

Here are the most recent prices:

Item: Low / High / Average / Median
1 oz silver coin: 20.51 / 47.00 / 33.71 / 32.42
1 oz silver bar: 26.25 / 44.50 / 34.57 / 34.50
1 oz gold coin: 1,833.08 / 2,030.50 / 1,917.41 / 1,907.02
1 oz gold bar: 1,845.37 / 2,035.00 / 1,898.62 / 1,874.09

Parts of Saturday and Sunday mornings were spent viewing some very interesting and important videos.

Mike Maloney's narrative over charts from offers an historic perspective of the American condition.

Refinitiv shares a wide-ranging interview with Real Vision’s CEO and co-founder, Raoul Pal, who provides distinct trading strategies and a serious view of what's ahead for the world's economies.

Gregory Mannarino supplies a look ahead for Stocks, Bitcoin, Gold and Silver.

Something to make note of as the world cascades through the covid crisis and beyond is that all of the important videos on youtube and various websites are being made by people who are generally shunned by mainstream media.'s Mike Maloney, Adam Taggert and Chris Martenson of Peak Prosperity, Real Vision's Raoul Pal, Max Keiser and Stacy Herbert of the Kaiser Report, and, to a lesser extent, various guests of Keith McCullough's Hedgeye can be seen only on the internet, while Fed officials, government bigwigs like Treasury Secretary Steven Mnuchin, and old line investors like Warren Buffett are the staple of mainstream TV media.

It's quite a contrast when you view it from that perspective and realize that the stories being told and the predictions being made about the future of the crisis and of the world are radically different. There's a choice to be made. Just which narrative are you going to believe? Who's advice will you follow, and where will you end up, socially, politically, and financially.

At the Close, Friday, May 15, 2020:
Dow Jones Industrial Average: 23,685.42, +60.12 (+0.25%)
NASDAQ: 9,014.56, +70.84 (+0.79%)
S&P 500: 2,863.70, +11.20 (+0.39%)
NYSE: 10,947.32, +19.92 (+0.18%)

For the Week:
Dow: -645.90 (-2.65%)
NASDAQ: +70.84 (+0.79%)
S&P 500: +11.20 (+0.39%)
NYSE: -407.02 (-3.58%)

Monday, March 9, 2020

Weekend Wrap: This Is Bad; Oil Crashes; Stock Futures Limit Down; Global Market Panic in Progress

Thanks to a late-day ramp on Friday afternoon, the week turned out to be mostly positive for the investor class, though it certainly didn't seem to be that way most as the days wore onward.

With a 600-point buying spree on the Dow Jones Industrial Average - which pulled all the other indices higher as well - stocks finished with gains instead of substantial losses. After a week of wild swings, the mood had turned ugly, accentuated by cascading drops on Thursday and Friday at the opening bells both days and concerted selling in airline stocks, banks, and hospitality.

As pronounced as the near-panic over the prior five trading sessions was, what's ahead on Monday will be worse by orders of magnitude.

Beginning with the coronavirus (COVID-19) decimating economies and social structure from China to Italy to South Korea, Iran, and beyond, slumping demand and forecasting of a bleak near-term future prompted extreme action from Saudi Arabia over the weekend. On Friday, when Russia refused to go along with a planned 1.5 million barrels a day reduction in crude production by OPEC+ nations, the Saudis decided to put the screws to everyone in the oil business by slashing their rates and ramping up production.

The impact of this momentous decision on Saturday was immediately felt across not just the oil futures markets but equity and credit markets around the world. With all major indices closed as usual on Sunday, focus was attuned to futures, which were being hammered lower by as much as seven percent in some cases. In the US, futures trading was halted when the Dow, S&P, and NASDAQ futures fell by five percent, otherwise known as limit down.

Crude futures were down by extreme amounts. WTI crude was last seen at $32.07 per barrel, a 22% loss from Friday, when it was selling in the low 40s per barrel.

Bonds were being battered as well, with reports that the benchmark 10-year note was trading with a yield below 0.48% (at one point yielding an all-time low of 0.31%) and other bond yields were being destroyed in markets that began to open, first in Japan, China and the Far East, then to Europe. If fear of COVID-19 contagion was palpable, the contagion from the economic fallout had become all to real.

With US markets set to open in an hour, the condition is dire.

A quick rundown of the carnage on major indices around the world:

  • NIKKEI (Japan) -5.07%

  • Straits Times Index (Taiwan, Pacific Rim) -6.03%

  • SSE Composite (China) -3.01%

  • Hang Seng (Hong Kong) -4.23%

  • BSE Sensex (India) -5.17%

  • All Ordinaries (Australia) -7.40%

  • KOSPI (South Korea) -4.19%

  • MOEX (Russia) -3.45

  • Jakarta Composite (Indonesia) -6.58%

  • FTSE Bursa (Malaysia) -3.97%

  • DAX (Germany) -7.00%

  • CAC-40 (France) -7.14%

  • FTSE 100 (England) -6.93%

  • EuroNext 100 (Europe composite) -7.50%

Suppression of the precious metals, the only remaining asset class that may hold some value, continues unabated as global economies come under severe pressure. Gold gained marginally, to $1678.00 per ounce, following a banner performance last week. Silver is under even more pressure, trading at $16.83 on futures markets, making a mockery of the gold/silver ratio, which is nearly 100:1. In more measured times - as in all centuries prior to this one - the gold silver ratio was pretty steady at 12:1 to 16:1. The current measure is a bad joke on a bad day, told by bad people with nothing but evil intentions (central banks).

Silver would have to rise to $100 per ounce for the gold/silver ratio to be anywhere near historical norms. With gold on the verge of a major breakout above $2000 per ounce, silver should - some day, maybe - be worth over $150 per ounce or similar equivalent in some other currency.

Monday's open should be epic. The aftermath, and the expected coordinated response by central banks figures to be a complete clown show, highlighted by massive injections of cash, POMO, TOMO, market-neutral rates, negative rates, and eventually, some collapsing banks. Couldn't happen to a more deserving crowd.

Money Daily will provide updates as time allows. Panic is a mild term for what's about to occur.

At the Close, Friday, March 6, 2020:
Dow Jones Industrial Average: 25,864.78, -256.52 (-0.98%)
NASDAQ: 8,575.62, -162.97 (-1.86%)
S&P 500: 2,972.37, -51.57 (-1.71%)
NYSE: 12,352.03, -240.97 (-1.91%)

For the Week:
Dow: +455.42 (+1.79%)
NASDAQ: +8.25 (+0.10%)
S&P 500: +18.15 (+0.61%)
NYSE: -28.94 (-0.23%)

Friday, November 15, 2019

Stocks Remain In Slumber Zone for Fourth Straight Session

The slowdown continues...

Rather, this is what happens when humans make poor decisions, over and over again, allowing computers to do most of the decision-making on trading. Now you're stuck between a rock and a hard place.

The rock: China's refusal to concede on many points in a trade deal.

The hard place: US insistence that a deal is "close."

This has been going on for months, about 16 to be precise, and stocks have been whipsawed in either direction depending on what the algos are going to interpret as good and/or bad news.

The latest, by presidential economic advisor and former financial talk show host, Larry Kudlow, has futures pointing higher prior to Friday's opening bell. But, we've seen this picture before. By he end of the day, there won't be a deal, and the Chinese will issue forth a press announcement that they don't agree to this or that or anything, maybe, and stocks will erase the gains they've made.

Count on it.

Judging by the figures below for Thursday's session, markets - outside of bonds - were essentially flat for the fourth consecutive day. Money Daily's headline yesterday, that this was about a dull a market as has ever been, was confirmed on Thursday.

Will Friday be any different, and, does it matter?

The chances that Friday will be different, and that stocks will find some direction, are good. It's an options expiration day, which usually adds some volatility, and it's the end of the week, so the market has those things going for it. On the other hand, there's nothing really new or different upon which to base trades.

As for the bond market, specifically treasuries, a rally is well underway. The selloff that saw yield on the 10-year note go from 1.54% on October 4 to 1.94% on November 8, is reversing course. The benchmark closed out yesterday at 1.82% and appears to have momentum heading into the holiday season. A slow-moving equity market at or near all-time highs (the S&P set another closing high yesterday) isn't helping inspire confidence, so there are many seeking the safety of government bonds.

As we head toward the opening bell in what can only be described as the welcome end to a week of insignificance, it's worth noting that even the phony impeachment hearings on Capitol Hill aren't even making headlines. That speaks volumes about how poorly the news media is perceived and even more about how loathsome our political leaders have become.

OK, you can go back to sleep now...

At the Close, Thursday, November 14, 2019:
Dow Jones Industrial Average: 27,781.96, -1.63 (-0.01%)
NASDAQ: 8,479.02, -3.08 (-0.04%)
S&P 500: 3,096.63, +2.59 (+0.08%)
NYSE Composite: 13,392.00, +6.94 (+0.05%)

Tuesday, December 18, 2018

Oil Crashes, Takes Stocks Down With It

Quite literally, oil is the grease of the global economy. Nothing moves unless oil is pumped, shipped, distilled and employed in the manufacture of just about everything. It is instrumental not only in manufacturing, but in food production and distribution.

Thus, when the price of oil crumbles, as it did on Tuesday, it worth taking notice. WTI crude futures were down sharply on Monday and again on Tuesday, dipping below $46 per barrel before recovering slightly to around $46.50. Tuesday's slide marked a $30 decline in the price of crude in just the past three months. On a percentage basis, oil is off 40% from its high of $76 per barrel in early October, coinciding with an all-time high recorded on the Dow Jones Industrial Average (October 3).

While the price drop may superficially be assigned to oversupply, there's also the condition of slack demand amid what is largely being hailed as a global slowdown set to commence early in 2019, if not already well underway. If companies aren't growing, they're not using more oil. With too much supply already weighing down prices, a perceived lack of demand is causing futures traders to panic.

The price of oil is going to be a boon to consumers as gas prices have been dropping, with some states now seeing gas at the pump for under $2.00 per gallon. Cheaper gas helps people with moderate income, freeing up capital for other expenses. The last time oil was down in this range (2015-16) the price dropped as low as $30 per barrel but at the time, people expressed a desire to either save the extra money they weren't spending on gas or pay down debt. If that's the generally-accepted policy for consumers at this juncture, it's going to play right into the global slowdown meme and send not just oil and gas prices tumbling, but stocks as well, as has already been the case.

As far as stocks were concerned, traders tried to shrug off Monday's crushing losses by bidding the Dow up by more than 300 points on Tuesday. As has been the case for weeks, the rally fizzled midday, and the Dow - along with the other US indices - fell into negative territory early in the afternoon. In what's become something of a motif for this current regime of volatility, short-covering perked up the indices into the close, but the entire session wasn't much of a response to Monday's mess. In fact, there was more weakness on display as stocks failed to hold ground, finishing with minor success.

With oil in the dumps and stocks hitting the skids, now might be the right time to cash out and walk away from the betting tables. After all, it is December. Any losing wagers can help with the inevitable tax bill come April.

Dow Jones Industrial Average December Scorecard:

Date Close Gain/Loss Cum. G/L
12/3/18 25,826.43 +287.97 +287.97
12/4/18 25,027.07 -799.36 -511.39
12/6/18 24,947.67 -79.40 -590.79
12/7/18 24,388.95 -558.72 -1149.51
12/10/18 24,423.26 +34.31 -1115.20
12/11/18 24,370.24 -53.02 -1168.22
12/12/18 24,527.27 +157.03 -1011.19
12/13/18 24,597.38 +70.11 -941.08
12/14/18 24,100.51 -496.87 -1437.95
12/17/18 23,592.98 -507.53 -1945.58
12/18/18 23,675.64 +82.66 -1862.92

At the Close, Tuesday, December 18, 2018:
Dow Jones Industrial Average: 23,675.64, +82.66 (+0.35%)
NASDAQ: 6,783.91, +30.18 (+0.45%)
S&P 500: 2,546.16, +0.22 (+0.01%)
NYSE Composite: 11,502.16, -29.96 (-0.26%)

Friday, May 25, 2018

Sliding Oil, Spanish Crisis, Mid-Week Ramp-Fest May Produce A Dizzying Friday Plunge

Just for the heck of it, let's look at the markets from a trader's perspective as the entire US population prepares to end the work week and head off for a three-day, fun-in-the-sun weekend.

Now, this trader, call him Bob, yeah, Trader Bob, has to be looking at the charts from Wednesday and Thursday, seeing that the Dow took a deep dive on both days before recovering, but also that Thursday's dive was deeper than Wednesday's and the closing level significantly lower as well. So, Trader Bob may be thinking, "This looks suspiciously like the work of the PPT or maybe even short-covering."

Scanning the headlines for Friday morning on his Bloomberg terminal, Trader Bob takes interest in a story out of Spain that is saying Prime Minister Mariano Rajoy is facing a vote of no confidence in that country's parliament, meaning that an entire country could be soon plunged into a chaotic situation. Bob also recalls that part of Spain - Catalonia - tried, unsuccessfully, to secede from the nation last year.

Then, Trader Bob sees the price of oil dropping off the chart, and notes that Saudi and Russian oil officials are stating that crude supply increases are likely in the near future.

Trader Bob, considering how much he's made for clients by going long oil futures, produces the following thought bubble:

Amazing, isn't it, that even Saudi government people and those pesky Russians understand some of the principles of economics?

Whoda thunk that if gas prices go up from about $2.30 a gallon to roughly $3.00 a gallon (a 30% increase), some people might not have as much disposable income?

And, if that lessened amount of disposable income is not spent on consumer goods, then whole industries might suffer?

And, if whole industries suffer, that might affect the greater economy?

It's not rocket science, it's the dismal science called economics.

So, what's Trader Bob likely to do Friday morning when the opening bell rings?

Well, for one thing, since he has 24-7 access to the futures market, he's dumping all his WTI crude futures calls. Fast. When the market opens, he's probably going to sell some stocks, just to get out in front of the herd, where he won't be trampled by the rush to the exits.

But, Trader Bob isn't actually convinced that a selloff is a done deal, so he's not going to get too far out in front, just enough to trim some of his more speculative positions. He doesn't want to be, as surfers call it, "hanging ten."

Trader Bob will be patient, with one eye on oil but a more focused eye on the US equity markets. If things go from bad to worse, he'll consider whether or not it's time to bail. 200 points down on the Dow would be a test of Thursday's low (24,605.40). Breaching that level might produce the stampede everyone on Wall Street fears.

An hour prior to the opening bell, at 8:30, Bob sees the Dow, S&P, and NASDAQ futures plunging into the red. He sells more oil futures. He looks around the trading floor. Some of the younger traders are looking a little queasy, green in the face. The older, more experienced guys are handling it better, having coffee and donuts while taking up substantial short positions is selected stocks, some of them whacking away at oil companies, others focused on Facebook (FB) and Apple (AAPL).

Trader Bob's hands are getting sweaty. He knows that he's prone to panic attacks, but so is all of Wall Street. He's not thinking about a three-day weekend. He's thinking about selling everything and moving to Maine.

Dow Jones Industrial Average May Scorecard:

Date Close Gain/Loss Cum. G/L
5/1/18 24,099.05 -64.10 -64.10
5/2/18 23,924.98 -174.07 -238.17
5/3/18 23,930.15 +5.17 -233.00
5/4/18 24,262.51 +332.36 +99.36
5/7/18 24,357.32 +94.81 +194.17
5/8/18 24,360.21 +2.89 +197.06
5/9/18 24,542.54 +182.33 +379.39
5/10/18 24,739.53 +196.99 +576.38
5/11/18 24,831.17 +91.64 +668.02
5/14/18 24,899.41 +68.24 +736.26
5/15/18 24,706.41 -193.00 +543.26
5/16/18 24,768.93 +62.52 +605.78
5/17/18 24,713.98 -54.95 +550.73
5/18/18 24,715.09 +1.11 +551.84
5/21/18 25,013.29 +298.20 +850.04
5/22/18 24,834.41 -178.88 +671.16
5/23/18 24,886.81 +52.40 +723.56
5/24/18 24,811.76 -75.05 +648.51

At the Close, Thursday, May 24, 2018:
Dow Jones Industrial Average: 24,811.76, -75.05 (-0.30%)
NASDAQ: 7,424.43, -1.53 (-0.02%)
S&P 500: 2,727.76, -5.53 (-0.20%)
NYSE Composite: 12,696.69, -46.71 (-0.37%)

Friday, February 9, 2018

The Gartman File (It's about time this fraud was exposed)

Well, after publicly calling out Dennis Gartman, celebrity investment advisor and frequent guest on CNBC, and trying to sign up for his newsletter (, Money Daily editor Fearless Rick has received no response.

Now, maybe it's because the people at The Gartman Letter are really, really busy, tracking stocks and currencies and ETFs and what not, though that's a serious doubt. It would make more sense to believe that Gartman is indeed lying - to his subscribers, primarily - about his year-to-date (as of March 10) performance of 12.3% and outperforming the S&P by 14%, especially after digging into Mr. Dennis Gartman's history.

On March 29, 2016Gartman "admits" that he's up 8.2%.

At one time, Gartman was pegged to manage an ETF for Horizons, a Canadian-based investment firm with various funds and ETFs under management. Specifically, the fund was known as the Horizons AlphaPro Gartman ETF, which was founded in March 2009 (perfect timing, being that was the market bottom), and went out of business four years later, on March 22, 2013.

Gartman, expert trader and analyst he claims to be, managed to lose money for the ETF and its clients while the S&P was up something on the order of 132% (from about 670 to roughly 1550).

Here's an article from the UK's Guardian (note: no mention of this on CNBC or any other US news media), published just before the AlphaPro Gartman ETF closed its doors at 7.90 per share, after opening four years earlier at $10.00.

But the Gartman ETF, named after advisor Dennis Gartman, ubiquitous author of the Gartman Letter, an investment advisory, couldn’t harness the benefits of its fortunate timing. The fund went public at $10 a share. Those same shares now fetch around $7.90.

More astonishing is that this closed-end fund actually saw the equivalent of massive redemptions. That’s unheard of in the closed-end world. With the asset base, and therefore fees, down sharply, it’s no surprise that Horizons Alphapro has decided to shut the fund down next month.

Here's an earlier article on Seeking Alpha, (June 23, 2011) that notes the fund had done OK for some time, but as of the article's writing, was down 7.7%.

Here is a rather humorous note from Peter Grandich, on Gartman's performance with a chart comparing his fund to the price of gold.

Nowhere to be found on any of Mr. Gartman's various postings and appearances are mention of his Hedge Fund, formed in August of 2009, as the River Crescent Fund (apparently named for the street on which he lives and likely does business from, in Suffolk, Virginia). At the time, Gartman was looking to raise the modest sum of $200 million from investors, and, according to his SEC filings, would accept a minimum of $5 million for starters.

Apparently, anybody with five million bucks didn't need Gartman's advice, because since its inception, there's been no news, no investments, no nothing, except for a lonely SEC filing. That's probably a good thing for most investors.

So, what does Gartman manage today, after failing miserably during one of the great bull markets of all time? According to sources, he manages his own retirement fund. And that's the one he claims is up 12.3% on the year, while the stock market was beaten down severely in January and early February, and gyrating in negative territory for the better part of the past month.

Essentially, from March 2009 through March 2013, Gartman should have had worn disclaimers every time he appeared on CNBC. whether he was or not is a question for the way-back machine. Certainly, there are clips from that time period and Money Daily will investigate further. Oddly enough, no mention is made of Gartman's failure with the AlphaPro Gartman EFT on his official CNBC biography.

Here's a particularly bad call, when Gartman said he was getting out of stocks in August of 2012, just prior to the Fed's launch of QE3, a mammoth stimulus, less than a month later.

Also, as far as can be discerned, Mr. Dennis Gartman is neither a registered equity trader, a member of FINRA, nor a futures trader (since 2005). Nor is Mr. Gartman a registered investment advisor.

The only conclusions one can reasonably assume is that Dennis Gartman, being well past his prime, is living off the $50 to $100 per day he makes appearing on CNBC and whatever meager earnings he derives from his newsletter.

Speaking of his newsletter - which I have never seen and doubt ever will as my request on his website has not elicited so much as a response - here are a few reviews. They're generally unflattering, again, begging the question as to why the clownish Gartman is even on CNBC at all.

Updating on April 21, 2016, Gartman says he likes Alcoa (AA) and Gold in Yen or Euro terms. Naturally, as soon as he had finished his on-air mouthings, gold fell $20... in US dollar terms, of course. As for the Alcoa call, it's a pretty safe one, since AA has been as high as 17.75 (November, 2014) and, recently, down to a multi-year low in January of 6.12 (intra-day). Calling it a buy around $10 a share isn't exactly rocket science. Gartman may actually have a winner here, but it won't be much of one.

UPDATE: Gartman has gone from bearish (in light of a face-ripping 200-point rally on the Dow, May 24) to bullish in 24 hours. This is the typical Gartman flip-flop and more evidence that he's a complete buffoon and plays with imaginary money.

What a clod!

Wednesday, August 16, 2017

How to Make $10,000 in Six Hours Before FOMC Minutes Are Released

It helps to be an insider on Wall Street if you expect to make big money.

Just as a for instance, take the trade in gold today prior to the Fed releasing the FOMC minutes from July at 2:00 pm ET.

At 8:00 am ET, gold was sitting right around $1270 per troy ounce. Six hours later, prior to the release of the FOMC minutes, it was at $1280 or above.

If one was so inclined, one could have placed a futures bid at 8:00 am and sold it at 2:00 pm, for a profit of $10 per troy ounce. Since futures are dealt with in lots of 100s, one would have had to made the order for 100 futures contracts. It would have cost a fraction of the actual value of the gold involved, but, upon selling, the profits would have netted somewhere in the neighborhood of $10,000, less commissions, which, as an insider, would be minimal.

Also, as an insider, one could probably have bought the futures via a margin account, thus putting up even less actual money.

Nice way to make a living, you say?

Well, if the Fed is nothing more than a stealth conduit for the wealthy and well-connected, it would surprise nobody if the contents of the FOMC minutes were leaked or casually mentioned in private conversation.

That's how corrupted markets work, and there's nothing more corrupted than the gold and silver futures markets, except maybe, the US equity markets.

What was discovered - among many views and opinions - in the FOMC minutes was that various members expressed a need to tighten policy, in other words, raise rates and/or roll off some of the excessive assets held by the Federal Reserve.

Roughly the same trade could have been made in various commodities, especially by being on the short side in WTI crude oil futures, or stocks, or by going long bonds. The Dow was up 87 points early in the day before reversing - well before the FOMC minutes release - finally closing just short of 26 points to the upside.

It is a nice way to make a living, especially when one has friends in high places.

At the Close, Wednesday, August 16, 2017:
Dow: 22,024.87, +25.88 (+0.12%)
NASDAQ 6,345.11, +12.10 (+0.19%)
S&P 500 2,468.11, +3.50 (+0.14%)
NYSE Composite: 11,865.33, +21.85 (+0.18%)

Friday, June 23, 2017

Mixed Stocks Ahead Of Quad-Witching; Fed Gearing Toward Recession

For the second straight session, stocks closed mixed, with the Dow and S&P finishing in the red while the NASDAQ and NYSE Composite registered marginal gains.

Essentially, markets were flat as the trudge through June continues.

As the week draws to a close, Friday looks to be a troublesome day, owing largely to options expiration and the fact that with the exception of the Dow, the major indices are right back where they began the month.

This condition - known as quadruple witching - may result in increased volatility, and, with prices flat, many stock options and futures may close without redemption, i.e., losses.

Quad witching is the simultaneous expiration of options and futures tied to individual stocks and stock indexes occurring on the last month of each quarter.

While the name may sound frightening, it often is not, especially when stocks are gaining, which, over the past eight years, has been more often than not. This quarter may prove a hurdle too high, sending stocks screaming lower.

Psychologically, losing money on a Friday sends traders home to unhappy weekends with thoughts of carnage fresh in their minds, so Monday's trading may prove more prescient in terms of market direction.

Meanwhile, bonds are telling. The 10-year note slipped to 2.15 on Thursday, with the 30-year bond holding steady at 2.72. The curve has continued to flatten, and that could actually be due to the Fed's tightening. With the overnight federal funds rate at 1.00-1.25 - the highest in nearly a decade - the Fed may be - inadvertently or otherwise - prompting the US economy into a recession.

GDP growth continues to flag and employment is stagnant. Raising rates during a period of slow to no growth makes sense only to Federal Reserve governors or others who bear no consequences for their actions.

Friday's action in the markets deserves close attention.

At the Close, 6/22/17:
Dow: 21,397.29, -12.74 (-0.06%)
NASDAQ 6,236.69, +2.73 (0.04%)
S&P 500 2,434.50, -1.11 (-0.05%)
NYSE Composite: 11,712.52, +16.24 (0.14%)

Thursday, May 30, 2013

Global Equity-Ponzi Bubble Expands (except in Japan)

Apparently, Japanese Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda just don't have the same financial panache as maybe Barack Obama and Fed head, Ben Bernanke.

If they did, their stock market - the Nikkei - would not have fallen five percent on Thursday, in a continuing downdraft in Japanese equities. Had they the skills of Bernanke, their stocks would have been up, like in the US, where the major averages shrugged off Wednesday's declines and rallied throughout the session.

Then again, maybe the Japanese have something up their sleeve, issuing new foreign exchange margin trading rules within the final hour of trading in New York, which prompted the markets - especially the Dow Industrials - to discard most of the gains on the day and cause the Dollar/Yen carry trade to slip into the red.

In today's economic landscape, controlled almost entirely by central banks, these kinds of things aren't supposed to happen. Stocks are always supposed to go up, the Yen must fall against the mighty US dollar (and all other currencies), bonds stabilize at historical low levels and unicorns puke up skittles and gold nuggets.

Maybe it's that last part - those gold nuggets - that have everybody nervous. Everyone knows that the spot, or paper, or futures gold price has nothing to do with the actual price of gold in physical terms and this disconnect, though held well below the surface purposely, because, in the words of the Great Bernanke, gold is not money and is something of an "ancient relic" in financial terms.

Well, that's just too bad, because gold has always been money, along with silver, and the price one pays for actual physical metal has become disjointed from all those other artificial prices, none of which entitles the holders of some precious scrip to actual, physical metal, and that's all that really counts in the end.

A promise to buy gold or silver or to have gold or silver or to receive gold or silver is not the same as actually holding it in one's possession.

In the long run, gold and silver will always be money. All the paper "equivalents" and substitutes will be about as worthless as... well, pieces of paper.

The wheels of the global Ponzi train to Zimbabwe are about to come off and the differences between that useless spot price and the real price of gold and silver are acting as the catalysts. When the markets finally collapse, which they - by mathematical certainty - must, fingers will be pointed everywhere: at the Fed, at the government, at the rich, at the poor, at Social Security, at China. But gold and silver will be blameless because, THEY ARE MONEY, and they will forever be money, despite Mr. Bernanke's views on the subject.

Dow 15,324.53, +21.73 (0.14%)
NASDAQ 3,491.30, +23.78 (0.69%)
S&P 500 1,654.41, +6.05 (0.37%)
NYSE Composite 9,460.05, +37.56 (0.40%)
NASDAQ Volume 1,746,768,625
NYSE Volume 3,812,669,250
Combined NYSE & NASDAQ Advance - Decline: 4070-2380
Combined NYSE & NASDAQ New highs - New lows: 295-80
WTI crude oil: 93.61, +0.48
Gold: 1,411.50, +20.20
Silver: 22.69, +0.237

Wednesday, July 20, 2011

No Follow-Through Off Tuesday Smash-Up; Hong Kong to Trade Silver Futures

Stocks lingered near the flat line for nearly the entire session, eventually succumbing to selling pressure late in the day, making Tuesday's low-volume rally appear more spin than substance. As usual, in a stunning reversal of fortune, financial stocks were the top-performing sector, up 1.02%, while six of the twelve sectors showed losses and the highest percentage gainer among the six winners - outside of financials - was basic materials, up 0.45%.

The big beat by the banking sector was highly attributable to the fact that the majority of trading on Wall Street is handled by these very firms, proving once more that the too-big-to-fail banks operate without scrutiny from the SEC or any other regulatory body, as self-dealing and insider trading runs rampant.

Sizing up the market as a whole, one could surmise that it is in desperate straits, stuck above the 200 and 50-day moving averages and just below the nominal highs of late April. A steady diet of sideways trading should be of benefit to the high frequency and momentum hedge funds and day-traders, but it's a difficult balance to maintain, especially when one is highly leveraged, as most of the larger firms are.

Having reached the midpoint of earnings season, it is notable that the major indices are less than one per cent higher than when second quarter earnings began in earnest on July 11 and lower than where they were just prior to the onslaught of corporate reporting. It's an amusing scenario, even as most companies have met or exceeded expectations, albeit, for many firms, lowered ones.

With the debt ceiling debate in Washington nearing end-game, stocks seem to be running in place, pacing off the worry of just what kind of stunt the clowns in congress will pull off next, the latest rumor calling for a short term interim raising of the debt ceiling, or having President Obama employ his powers under the 14th amendment, which, according to Bill Clinton, gives the president authority to raise the debt limit without requiring congressional approval.

The key take-away is 10 words from section 4 of the amendment, which says, “The validity of the public debt shall not be questioned."

In typical obstructionist fashion members of the Republican party have already begun questioning the assumption that the president could go solo on a debt ceiling raise, with some members mentioning impeachment and lawsuits.

If nothing else, invoking the constitution on shaky legal grounds would no doubt wind up under the purview of the Supreme Court, take months to wrangle over and eventually end up with a nice downgrade in the US credit rating and higher interest rates for all. That would effectively defeat the whole intent of the Republican and Tea parties for starting this fight, as losses to the Treasury in terms of increased spending to cover higher interest on borrowings would cause even deeper deficits in years to come.

As it is, Moody's and S&P have already raised eyebrows and issued warnings about taking the debt ceiling issue too far afield, and there's a chance that even if an agreement is cobbled together, a rating downgrade could already be in the cards.

After a while, this entire escapade of Washington Gone Wild becomes a futile, badly-managed fiasco. The debt ceiling should never have been tied to budget considerations in the first place. In the end, the Tea Party wing of the Republican party has to be seen as the unwise villain in this sordid, sick affair.

Dow 12,571.91, -15.51 (0.12%)
NASDAQ 2,814.23, -12.29 (0.43%)
S&P 500 1,325.84, -0.89 (0.07%)
NYSE Composite 8,281.83, +27.45 (0.33%)

On the day, winners and losers were nearly split evenly, with 3289 advancing and 3241 declining. On the NASDAQ, there were 71 new highs and 34 new lows. New highs led new lows, 95-19 on the NYSE. The combined total of 166 new highs and 53 new lows is a positive sign for marketeers, though comparisons will be harder to beat come September, October and November, as stocks scored heavy gains in those months last year. Volume was the same as every other day this year: sluggish.

NASDAQ Volume 1,874,350,375
NYSE Volume 3,767,229,500

WTI crude oil was down for much of the session, but finished 64 cents higher, at $98.14. Gold was off $4.20, to $1,596.90, and silver dropped 66 cents, at $39.56, though it traded below $38.50 earlier in the day.

Tomorrow will mark the final day of singularity for the COMEX silver market as Hong Kong will begin trading a dollar-denominated silver futures contract on July 22, tapping into rising demand for all metals coming from China. This could potentially create an enormous run-up in the price of silver, as the Hong Kong exchange will be seen as an offset to COMEX (and Anglo-American) hegemony.

It will be interesting to watch the vicious price swings once the exchange gets its feet wet and orders begin flowing from not only China, but India and other Pac-Rim nations as well. Many are hoping that the Hong Kong exchange will operate in an honest fashion, exposing the manipulative ways of the COMEX and the shorting strategies of JP Morgan Chase and HSBC.

A new player in the global silver trade might be just what the doctor ordered for holders and hoarders of silver.

Monday, March 26, 2007

Mod Market: Updating...

"Cars and girls are easy come by in this day and age,
Laughing, joking, drinking, smoking,
Till I've spent my wage."

-- The Yardbirds, Over, Under, Sideways, Down, 1966

The year was 1966. Gasoline was 35¢ a gallon. A new car would set you back around $1500. The Dow was trading in triple digits. The British rock invasion was well underway. Life was good; you could spend your paycheck on booze, cigarettes and loose women and not worry about next week.

How times change. Gas and cars are now 8-12 times more expensive. $1000 invested in the Dow in 1966 would be worth $18,000 today. No wonder we're not all millionaires. While the Dow and stocks in general have outpaced inflation, they barely did so. Which brings us to Friday's close...

Dow 12, 481.01 +19.87; NASDAQ 2,456.18 +4.44; S&P 500 1,436.11 +1.57; NYSE Composite 9,338.40 +24.58

The major indices showed nifty gains for the week, though they're still below the mid-February highs. It's the way this market has been for over a month now, a corrective phase that's yet to play out fully. Friday's volume was the weakest of the week, underscoring the relatively tame gains. Traders are still uncertain of the direction here and skeptical of future gains.

Somewhat depressing for traders - and everyone else for that matter - is the continuing high price of gasoline at the pump, and the recent one-day spike (from $56 to over $60) when the crude oil futures turned over from April to May. Apparently, those controlling the price of oil are afraid that Global Warming will kill us all, and are trying to beat the environment to the punch.

This market continues to bounce around: over, under, sideways, but mostly, down.