Financial Astrology – Market Manipulation

My prediction In the July 27th update for trouble at the CME September 1st has come to fruition as reported in an article posted from Zerohedge on September 1st. To sum up the article, Nanex’s Eric Hunsader confirmed the participation of central banks involvement in market manipulation of the S&P futures, known as the E-mini, in both the futures and option form, in addition to the well-known central bank trading in Interest Rates, TSY and FX products. In order to incentivize the banks the CME is paying them tiny rebates on every trade.
The exposure seems to have the CME thrown off balance and it could likely have set in motion lawsuits that could disrupt it’s business practices, and possibly expose other more damaging connections to gold and currency manipulation. The charade at the CME is likely more a threat to international monetary cooperation, however, anyone who is involved with trading the markets will get the trickle down effect. Last Monday the CME advised the CFTC that the derivative market would be adopting a ‘new rule 575′ to eliminate ‘Disruptive Practices Prohibited’. The rule covers nearly all types of trading practices and is designed to eliminate market-rigging. Starting September 15th – this is the same date I have identified as bullish for gold – the CME will no longer tolerate what it calls ‘Disruptive Market Practices’ (Read the full article)

This post was published at ZenTrader on September 17, 2014.

OK, I Get It. Things Are Coming Unglued

As long as major stock indices around the world keep soaring (forget for a moment the carnage in smaller stocks), and as long as bonds trade at near all-time highs, and as long as the yield of dubious government debt is close to zero or below zero so that borrowing has become a profit center for governments and a loss center for investors, as long as we live in this wondrous world, who cares about the global economy?
This is a resounding theme. Super-ugly data about Japan’s economy piles up, and people say, ‘Yeah but look, the Nikkei surges.’ And this discussion is over.
It doesn’t matter that the Nikkei surges as the Bank of Japan is buying every JGB that isn’t nailed down. It’s buying them from banks, pension funds, and individual investors to pile them up on its balance sheet where they can be selectively defaulted on without sparking social chaos. Everyone seems to have accepted the alternative to social chaos, namely a gradual loss of ‘wealth.’
So banks, pension funds, and other investors are selling their JGBs to the Bank of Japan and are looking at stocks as a place to stash their proceeds. This buying is unrelated to what companies in the Nikkei are doing. It’s an effort to get rid of increasingly toxic JGBs. And hedge funds anticipate that pension funds and other investors are shifting into stocks, and they front-run them, and the Nikkei surges….
But off to the side, in Cairns, Australia, the finance honchos of the G-20 are meeting this weekend. And they’re already jabbering. They’re lamenting just how badly the global economy is faltering. But it was overshadowed by the iPhone 6 razzmatazz and the IPO hoopla of Alibaba, whose shares give investors ownership in a mailbox company in the Cayman Islands that has a contract with some Chinese outfit, and nothing more. But hey, the purpose of owning a stake in a mailbox company is to make a buck and get out. An equation that might work for a while in this era of endless liquidity.

This post was published at Wolf Street on September 19, 2014.

Speculators Remain Net Long as Gold Drops Lower

I picked the headline because I wanted to add the following: “And are losing money”. I am attaching two charts to this short post. The first is the overall COT positions from today’s report.
Take a look at the lines reflecting the positions of the various groups of speculators. Note that all three groups, the Hedge Funds, the Other Large Reportables and the Small Specs or general public, all remain NET LONG in gold. And guess what – they are all losing money. Also, what concerns me is that based on this Friday’s report, there are still more than a considerable amount of these losing positions left to unwind. As of the close of trading business on Tuesday ( the day through which the weekly report covers ) the price of gold was $1236.70. As of the close today, it was $1216.60 or another $20 lower. There is no doubt that the breach of downside chart support levels has taken out more of these spec longs, but the question is how much pain can they endure, especially when margin calls begin mounting?

This post was published at Trader Dan Norcini on Friday, September 19, 2014.

What are your questions for former Fed Chairman Alan Greenspan in New Orleans?

GATA again will have a big part in the New Orleans Investment Conference this year, what with GATA Chairman Bill Murphy and your secretary/treasurer making presentations, your secretary/treasurer debating Casey Research founder Doug Casey about whether the gold market is manipulated, and former Federal Reserve Chairman Alan Greenspan not only speaking but taking questions from the audience.
Conference sponsor Brien Lundin of Gold Newsletter and the Jefferson Companies in Louisiana is asking for help in devising questions for Greenspan, and GATA has appended his appeal.

This post was published at GATA

Lawrence Williams: The future for gold is physical

At an event [on Thursday] to mark the start of Shanghai Gold Exchange’s gold trading in the city’s free-trade zone (SFTZ) and the creation of the International Board, the Shanghai Gold Exchange and the World Gold Council have stated they will be actively cooperating to develop the SFTZ as an international hub for gold and to work together to develop the gold market in the region. The event was attended by Zhou Xiaochuan, Governor of the People’s Bank of China, Mr. Xu Luode, the Chairman of Shanghai Gold Exchange and Aram Shishmanian, CEO of the World Gold Council.
This collaboration follows on from a partnership signed between the China Gold Association and the World Gold Council in Beijing last week at the China Gold Congress and Expo, which they jointly sponsored. This partnership seeks to promote further international enterprise in China and to enhance the global understanding of China’s role within the global supply chain.
As we commented on the report concerning WGC and PBoC co-operation, one hopes these co-operations are close and will thus help lift the veil on some of the statistical anomalies that beset analytical reports on the massive Chinese gold sector.

This post was published at Mineweb

Europe’s Banks Show Tepid Interest as E.C.B. Begins Program of Cheap Loans

Banks borrowed less than expected from the European Central Bank in a disappointing start for a program intended to encourage more lending to businesses and households and to pump money into the ailing eurozone economy.
The central bank said on Thursday that it would allot nearly 83 billion euros, or about $107 billion, to 255 commercial banks next week. Estimates of how much money banks would borrow had varied widely, but many analysts said before the announcement that anything less than €100 billion would be a disappointment.
The program is part of a broader effort by the central bank to inject as much as €1 trillion into the eurozone economy, and the borrowing data on Thursday was closely watched as an indicator of whether the central bank would be able to meet its goal. The loans are meant to drive down the cost of borrowing and encourage lending, especially in countries like Italy and Portugal, where a lack of credit has impeded economic growth.

This post was published at NY Times

Doug Noland: Only for wonks

Of late, talk has been that the ECB’s balance sheet would come to the rescue. Count me as deeply skeptical of all the bullish ECB “QE” liquidity propaganda. As such, I see a world of somewhat waning liquidity abundance with an increasingly destabilizing King Dollar bias. There’s risk that escalating EM stress and attendant “hot money” outflows lead to a self-reinforcing de-risking/de-leveraging dynamic. EM companies and countries at this point have way too much dollar-denominated debt. At some point, contagion might negatively impact market expectations for the global economy at large, perhaps leading to a more generalized global “risk off” backdrop.
From the Z.1 we know that Security Credit was up $161bn year-over-year, or 13.7%, to a record $1.333 TN. Fed Funds and Repurchase Agreements were little changed y-o-y at $3.792 TN. Security Broker/Dealer Assets were actually down about 5% y-o-y to $3.388 TN. Funding Corps were down 3.3% y-o-y to $1.312 TN. Clearly, securities leveraging remains integral to overall Credit system operations.
At the same time, there are important sources of global leverage outside the purview of Fed monitoring and Z.1 reporting. There are myriad avenues for “carry trades,” securities shorting and “off-shore” securities financing vehicles, not to mention the murky world of (hundreds of Trillions of) derivatives.

This post was published at Prudent Bear

sept 19/huge fall in silver and another $10 dollars in gold/open interest rises huge in silver/GLD losses 7.78 tonnes of gold to Shanghai.

Gold closed down 10.40 at $1215.30 (comex to comex closing time ). Silver was down 64 cents at $17.78
In the access market tonight at 5:15 pm gold: $1215.30 silver: $17.78 GLD : we lost 7.78 tonnes of gold at the GLD (inventory now at 776.44 tonnes) SLV : no change in silver inventory/note the difference between gold and silver. Physical gold that arrives from the Bank of England is sent down to Shanghai who lately has been receiving greater than 40 tonnes per week with the lower gold prices. In silver, there is no reason to raid the SLV because there is no physical silver to provide India or China. end I am sorry that my commentary tonight is awkward as I only have my laptop and I am unaccustomed to its use. However I did provide the key articles for you today. We will discuss these and other stories So without further ado……………… Let’s head immediately to see the data has in store for us today.

This post was published at Harvey Organ on Friday, September 19, 2014.

Long Term Gold Chart with Retracements

Our friend Lenny sent the patrons of the caf a long term gold chart that is quite interesting We have certainly been through the ups and downs of these markets together,
It shows the strong support at 1180, and the longer term trend line that works on a logarithmic chart.
I asked Len to include the retracement levels, because as I recalled there had been a prior big retracement earlier in this bull market, from 1030 to 681 that shook quite a few people out.
I was wondering how this current price decline compared.
Here is the chart. We can draw lines on charts all day. It is the action in the market, the push of supply against the pull of demand, that will set the true marks. But these days it seems we can only count on price discovery in the intermediate term.
jessescrossroadscafe

This post was published at Jesses Crossroads Cafe on 19 SEPTEMBER 2014.

Think Like A Criminal And You’ll Understand What’s Happening.

Hi Dave. I am a long time follower of your work.
Just reaching out for your opinion if you don’t mind the intrusion. I made a decision back in 2005 to put most of everything except the homes we have into metals. Been riding this monkey up and down but I feel like the guy in the twilight zone episode where everyone speaks another language. Any advice for an amateur to stay the course?
My response:
The most important aspect of this to understand – and I’m sure you do – is that this manipulation and take-down of the metals is being done almost entirely with Comex paper contracts. As long as they can keep printing paper contracts for which they’re never called on to deliver, they can fabricate fraudulent gold and silver supply. As you know, when supply exceeds demand, price goes down. I watch and trade the Comex everyday. And everyday, like clockwork, gold and silver start to sell-off in the last 30 minutes of Comex floor trading. There is no better example of how manipulated and corrupt the Comex is. It would be equivalent to a baseball player getting a hit every time he went to bat.
As I’m sure you also know, gold and silver drift higher on most nights when the Asian/Indian physical bullion markets are open. That’s where the real market for precious metals is taking place. London is not only no longer the biggest physical bullion market in the world, it is now predominantly a fraudulent paper-derived market from which most of the physical gold has been transferred from London vaults to the eastern hemisphere buyers, who do demand actual physical delivery. In fact, as we’ve witnessed with this nonsense surrounding the gold/silver fix system and the removal of GOFO/SIFO rate reporting, the London bullion market has evidenced itself to be at least as, and probably more, corrupt than the Comex.

This post was published at Investment Research Dynamics on September 19, 2014.

PM End of Week Market Commentary – 9/19/2014

On Friday gold dropped -9.00 to 1216.90 on heavy volume, while silver was crushed, dropping -0.73 to close at 17.79 on very heavy volume. While gold made a new low by a few bucks, silver broke below its 2013 PM crash low of 18.17, and once that happened the buyers just vanished. Silver closed almost at the dead lows for the day.
A big problem with silver is that its long term chart looked bad going into the week – the long term descending triangle revealed a trend of steadily dropping buy-side interest. This, combined with new highs by the buck, and yet another drop in commodity prices caused the silver longs to just throw in the towel. That’s how I read it anyway.

This post was published at PeakProsperity on Sat, Sep 20, 2014 –.

Gold And Silver Price Drop To Critical Fibonacci Levels

The Fed decided to keep the ‘considerable time’ pledge until the first rate hike in its statement on Wednesday. This boosted stocks, sending the Dow and S&P to fresh record highs. The dollar bulls were also satisfied with the so-called ‘dot plot’ of Fed members’ forecasts for interest rates edging higher. As the dollar and stocks continued to strengthen, so too did the pressure on commodities priced in the US currency. And so as another week draws to a close, both gold and silver are once again falling.
The sell-off has forced the metals to break below some key technical support levels. As a result, fresh sell orders have been triggered which have thus exacerbated the sell-off. In fact, silver has just broken below the 2013 low of $18.20 and at the time of this writing, it looks like more losses are on the way for the grey metal.
For silver, the next potential support is around $17.75/80, a level which corresponds with the 127.2% Fibonacci extension of the last major upswing. The 161.8% extension of that move comes in way down at $16.75. Worryingly for the bulls, the metal has also created a ‘death crossover’ which is another bearish development. This crossover occurs when the 50-day moving average drops below the 200-day SMA.
The bulls will be hoping that the metal may bounce back off its lows and close the day above where it had opened or ideally at an even better level. If that were to happen, it would indicate that there was lack of supply below $18.20 and we would potentially have a false breakdown reversal pattern on the cards. As we go to press, the chances look slim for this scenario, but it is nonetheless a possibility.

This post was published at GoldSilverWorlds on September 19, 2014.

The Silver Paradox In One Chart

As gold and silver prices tumble to multi-year lows, an odd thing is happening in the ‘paper’ precious metals ETF markets. Demand remains high for silver ETF exposure as ‘someone’ is aggressively unwinding gold ETF positions.. and yet the prices for both are falling rapidly. It appears the retail investor is taking advantage of the lower prices in silver to accumulate additional exposure as Credit Suisse notes, “the perception is that silver will do well, and should outperform gold as the economic recovery strengthens,” adding that “belief in silver’s dual properties, as a financial asset and also as an industrial metal, appears to remain strong.”
*SPDR GOLD HOLDINGS TUMBLE 1% TO 776.44 TONS, LOWEST SINCE 2008

This post was published at Zero Hedge on 09/19/2014.

Monetary Policy Killing the System

The byline should read MONEY VELOCITY HITS RECORD LOW, WHILE MONEY SUPPLY CONTINUES TO GO INTO ORBIT… SYSTEMIC FAILURE IS EVIDENT AS POLICY IS NOT STIMULUS AT ALL… THE PRINCIPAL CAUSE FOR THE BREAKDOWN IS MONETARY POLICY, WHICH IS STUCK IN PLACE.
The USFed monetary policy is killing the system, simply and boldly put. They call it stimulus, when the extreme accommodation is actually just a backdoor Wall Street bailout combined with a pass on the USGovt debt discipline. No debt limit is enforced anymore, a travesty. The United States is looking more like a Third World nation with each passing month, with colossal fraud, economic decay, war and sanctions, and no leadership. The US Federal Reserve has ventured into very dangerous ground, putting hyper monetary inflation as the installed policy, while making money free for the Interest Rate Swap machinery that operates the derivative for maintaining the easy policy. So foreign creditors have largely exited the room, with no great entities to finance the yawning annual $trillion debt. So derivative machinery is relied upon to maintain the absurd 10-year USTreasury (TNX) yield at 2.60% without buyers. So asset markets like the US Stock Market go to monthly new high levels, despite the USEconomy mired in the worst recession since the Great Depression. The visible piece is shopping malls with one third of stores shuttered, and the jobless rate over 22% in the real world without rose colored glasses. These conditions cannot be sustained, especially since the credit machinery is all jammed. The big US banks are insolvent structures dedicated to the bond carry trade, where that same cheap money is used to invest, often with leverage, in the long-dated maturity USTreasury Bonds. The banks serve the casino, not the business sector.
STUCK MONETARY POLICY
In no way can the current easy money policy be reversed, and put into a normal mode. In no way can the accommodation be tapered. The entire Taper Talk is a lie, and always has been a lie. The Jackass called out the USFed last June and July, and was proved correct by September. Since that time, the USFed has been lying vigorously and creatively. The Belgium Bulge showed itself as a $400 billion abscess visible to the world, hardly a real savings account by the small nation. It was either a Hidey Hole for USTBonds or else a loading depot for BRICS sourcing of Gold bullion for their upcoming central bank. In no way can the enormous bond carry trades be stopped. They are the only source of actual income for the big US banks. Their other source of narco funds money laundering. Doing so would put the carry trade engines into reverse, forcing an unwanted Bond Convexity episode of leveraged selling of USTreasury Bonds by the same large corrupted banks which are so clearly involved in the derivatives game. In no way can the USFed hike rates, since their own outsized bond portfolio would register huge losses, only to gain ugly publicity. They after all bought the top in bonds, and continue to buy the top in bonds every month that QE continues. They are the fools buying the asset bubble at the top. See a parallel in Japan…

This post was published at GoldSeek By Jim Willie CB, GoldenJackass.com /19 September 2014.

SP 500 and NDX Futures Daily Charts – The Error of Their Ways

‘To keep any great nation up to a high standard of civilization there must be enough superior characters to hold the balance of power, but the very moment the balance of power gets into the hands of second-rate men and women, a decline of that nation is inevitable.’
Christian D. Larson
Today was the day of Alibaba, the biggest IPO ever. Huzzah!The great BABA ran up to $99.70 in the first hour after its open, and then settled back down into the low 90′s. This is quite jump over the IPO which priced out last night at $68. Is there a fat lady singing in there anywhere? I am not sure, but I think I hear a familiar melody. The equity market is an asset bubble. And when it breaks, there will be another attempt to transfer the debts to the broader public, with no penalties to the perpetrators. And then we shall see how the cards may fall. And who knows? They may do it all over again after that? What is to stop it?

This post was published at Jesses Crossroads Cafe on 19 SEPTEMBER 2014.

Cheap Gold Stocks’ Upleg Intact

Gold stocks have plunged in September, crushed by the withering selling pressure from heavy futures shorting hammering gold. As usual, these falling prices have kindled extreme bearishness on this left-for-dead sector. But despite this rotten sentiment, gold stocks’ young upleg remains very much intact technically. This impressive resiliency is fueled by these miners’ incredibly-cheap fundamental valuations.
Gold stocks are without a doubt the most despised sector in all the stock markets. Thanks to the Fed’s brazen debt monetizations and manipulations of interest rates, the global markets are distorted beyond belief. Stock markets have soared to extreme valuations on the Fed’s implied backstopping, leading to epic complacency, greed, and hubris. That artificial levitation sucked vast capital out of alternative investments.
When stock markets do nothing but rally thanks to the Fed, the perceived need for prudent portfolio diversification with alternative investments like gold has vanished. And with investor interest in gold virtually dead, the gold stocks have suffered mightily. Nearly everyone believes they are doomed to spiral lower forever. To be bullish on this loathed sector guarantees ridicule and mocking these days.
Nevertheless, a hardcore remnant of contrarian investors remains very bullish on this sector. They have studied market history, and remember core truths that the Fed has blasted from most minds. Markets are forever cyclical, they rise and fall. Any extreme in sentiment and prices is soon followed by a major reversal. Exceptionally-high greed-fueled prices soon fall, and exceptionally-low fear-drenched prices soon rise.
Contrarians know that successful investing demands buying low then selling high. And the cheapest stocks are always the most hated, the sectors with the most universal and overwhelming bearishness. They have the most potential to explode higher and multiply wealth when sentiment inevitably shifts the other way. That’s why smart investors including elite billionaire hedge-fund managers are long gold stocks today.
Gold-stock fundamentals are exceedingly easy to understand. Gold miners obviously mine gold. And their production costs are largely fixed when mines are built. So their profitability is determined by the gold price. When gold climbs, their profit margins and absolute earnings soar as their costs stay pretty stable. So these companies are ultimately a leveraged play on the gold prices which drive their profits.
Across all the markets, any stock’s underlying profitability determines what its fundamentally-sound price levels should be. Gold stocks are no exception, as they will eventually climb dramatically to trade at reasonable valuations relative to their profits. And not only will their earnings surge as the gold price itself recovers from today’s sentiment extremes, gold stocks are dirt-cheap relative to current low gold levels!

This post was published at ZEAL LLC on September 19, 2014.

Was Scottish Vote Rigging Caught On Tape?

Given the pre-vote polls and 300 years of historical resentment, many were somewhat surprised at the overwhelming “No” vote in last night’s Scottish Independence referendum. While we now know that the vote broke very cleanly between old (“no”) and young (“yes”) Scots, the following clip suggests the possibility that more was afoot than that. As the commentator blasts, “Busted! Absolutely busted!” You decide…

This post was published at Zero Hedge on 09/19/2014.