SP 500 and NDX Futures Daily Charts - Lions and Tigers and Bears, Oh My!

The selling this week is being attributed by the pundits to 'tax selling.'

I won't debate that, but I will say that if the selling continues next week it probably is not tax related, but related to overly high valuations and a thorough wash and rinse.

The momentum stocks in tech continued to lead the way down, with JPM contributing something to the Dow Industrials (what an abomination to include JPM in the Dow Industrials) with its miss in the quarterly numbers this morning.

Unemployment claims came in low, but PPI came in a bit hot. But the selling looks more like a game of trader tag more than any reflection of fundamentals getting better or worse.

I own *no* stocks here, but I was giving it some serious thought today, miners-wise. But I decided to wait for next week.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Gold Continues Higher

Gold led the way higher as silver is still stuck around the 20 handle.

It had the feel of a 'flight to safety' as stocks took it on the chin, including the miners.

Let's see what happens. 

 

SP 500 and NDX Futures Daily Charts - The Next Big Move Is the One To Watch

The spec dip buyers must have been piling on yesterday, and after this morning's better than expected unemployment claims number.  Because stocks got clocked, and hard, back down through near support.

It is going to take a another down move with a solid break of 1800 to get my bearish juices flowing, because for now I think that they are just playing.

The algos are just riding around, playing tag with each other, and killing any human beings that happen to wander into the markets.

Have a pleasant evening.

 

Nomi Prins - All the President's Bankers: The Hidden Alliances That Drive American Power

This is from the book summary at Amazon.com:

"Culled from original presidential archival documents, All the Presidents’ Bankers delivers an explosive account of the hundred-year interdependence between the White House and Wall Street that transcends a simple analysis of money driving politics—or greed driving bankers.

Prins ushers us into the intimate world of exclusive clubs, vacation spots, and Ivy League universities that binds presidents and financiers. She unravels the multi-generational blood, intermarriage, and protégé relationships that have confined national influence to a privileged cluster of people. These families and individuals recycle their power through elected office and private channels in Washington, DC...

Prins divulges how, through the Cold War and Vietnam era, presidents and bankers pushed America’s superpower status and expansion abroad, while promoting broadly democratic values and social welfare at home. But from the 1970s, Wall Street’s rush to secure Middle East oil profits altered the nature of political-financial alliances. Bankers’ profit motive trumped heritage and allegiance to public service, while presidents lost control over the economy—as was dramatically evident in the financial crisis of 2008."

Gold Daily and Silver Weekly Charts - Who or What Will Let the Dawg Out?

The yellow dawg (gold) is straining at the leash.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Fed Minutes and Scalded Cat Trades

The Fed minutes came out at 2 PM, and their dovish tone had stocks soaring higher, running the bears out of the new wash cycle.

Earnings will now start playing a more important role in market movements, but as I noted in the intraday commentary the HFT algos are driving a significant portion of daily stock volume. So the trade has a very technical tinge.

I hear that Goldman says that there is a 67% chance of a ten percent correction in stocks over next year.

I think if we get the right even, that ten percent is going to seem like a blip, unless the Fed pulls out all the stops to save their friends.

Bank earnings start coming in on Friday.

Have a pleasant evening.

Liz Warren Predicts the Collapse of the Middle Class in 2008

"A fascist is one whose lust for money or power is combined with such an intensity of intolerance toward those of other races, parties, classes, religions, cultures, regions or nations as to make him ruthless in his use of deceit or violence to attain his ends...

The symptoms of fascist thinking are colored by environment and adapted to immediate circumstances. But always and everywhere they can be identified by their appeal to prejudice and by the desire to play upon the fears and vanities of different groups in order to gain power...

Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection."

Henry A. Wallace

Certainly we can observe that the roots of the collapse go back to 1980, at least. And Warren provides the data that shows this.

What is perhaps most shocking six years later is the nonchalance with which this collapse in the grinding Great Recession is accepted as the new normal in a corporate kleptocracy. And that most meaningful reform is twisted and defeated by very well paid political interests, often to the cheers of useful idiots.

I do not think this cycle of repression has reached its zenith yet. And given historical examples I do not think it will end except in excesses which we have yet to imagine, both at home and abroad.

The Technically Driven Market: Wash and Rinse Cycles In a Trend

Hot money blunts the impact of all but the most extreme events in the real world.

Computer algorithms dominate the trading environments in volume, speed, and short term gamesmanship.  A 'random walk' my ass.

The market becomes an endless churn and burn with an upwards bias supported by the Fed's expansion of the money supply.

The market is notable for the bifurcation into professionals and marks, with the occasional warring factions between the monied interests. 

Wash, churn, rinse, repeat.

This is what I mean by 'the technically driven trade.'  It is a constant game of liar's poker in a largely lawless environment.

The moral hazard is the misallocation of capital, the misappropriation of policy money, the corrosion of the public trust and national character, and the dissipation of wealth in the occasional market breaks and collapses.