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SPOOs Keep On Chugging

Daily Rap 05-27-2014

The SPOOs were pretty frisky overnight and gained about 0.5% in the first hour of trading, with the Dow dogging it a bit thanks to weakness in IBM. The Nasdaq was the strongest, adding 0.75%, as many of the broken momentum names have continued to bounce.

Mixed Messages As far as the technical situation in the stock market is concerned, the S&P has hit a new high while the Dow is flirting with one. Meanwhile, the Russell and the Nasdaq are potentially set up for failing rallies, though there is no point in getting ahead of ourselves, as we just have to let that play out.

Turning back to the action, after a bit of a dip around midday the tape pushed higher, led by the Nasdaq, which gained 1%-plus, as the S&P/Dow lagged somewhat. Away from stocks, green...more

Last year's posts for Ask Fleck

Q: Hi Bill,

Do you think this statement from the WSJ is true? Is the cost of mining gold about to soar?

"In a report from the Wall Street Journal this morning, we learn that we're only two decades away from exhausting the world's gold supply if mining continues apace. How could we be running out of gold?

It's simple. As gold boomed in the 90s and 00s, the easy-to-access deposits were sapped of their supplies. Now, the gold being discovered is way deeper into the Earth, which means that discovering it takes a lot more work before it can be extracted."

Fleck: "About to"? The cost to mine gold has about doubled in the last 10 years, plus or minus, already. And yes, it is becoming far more scarce. Just look at how low grade most new gold deposits are.
(posted: 5/23/2014)

Q: Bill,

On 5/21 Ask Fleck there was a question regarding the anticipated big move in gold: "What, if anything, are you looking for that indicate (at least in the medium term), that the move is for real and not another head fake (either way)?".

You answered "I'm not exactly sure what parameters to place on what might happen, but I'd guess that under $1,200 or over, say, $1,310-$1.315 ought to mean the move in that direction may have some legs."

I didn't ask right away because I thought everyone else would, but surely there is a typo here? It would take only 20 - 25 points to the upside, but 90 - 95 points to the downside to indicate that the move may have legs?

Thanks for any clarification you could provide!

Fleck: Oops, that was a bad mistake, I didn't catch that. Should have been $1,280ish. Thanks for pointing this out to me! [The 5/21 post has been corrected. - Ed.]
(posted: 5/23/2014)

Q: Hi Bill,

I know you have tried to believe in the integrity of the commodities market, but it seems one needs more than faith.

The best analysis and investigations are worthless if 'players' have the upper hand over you as it is with the HFT crowd. Now, I am not saying pull out if things are ...well, rigged'; on the contrary, if these bastards are running for the hills now that exposure is burning their skin, then true value like gold should fly high uncaged at last.

All this 'control' has done is to allow China and Russia to buy on the cheap by the trainload. One must wonder why and who (on the big scale) profits when Gold springs out of its chains? The rats are leaving the ship it seems...

This news piece, a slap on the wrist for Barkley's, is just another in the last week shining a light where little has shown before. Worth the read and the link to the earlier stories.

Barclay's Price Fixing Gold

Fleck: Thanks. No one has "the upper hand" over time. In the short run markets can get muscled, but not over time.
(posted: 5/23/2014)

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