Ultimately the biggest problem the US faces, the ever increasing Inequality.

After posting this afternoon, the market might close below 1200, we got some “dissapointed” emails. Well, the market is reversing today. Let us see if we manage to close below 1200, and everybody gets fooled into the false bull once more. Meanwhile, for those following our charts, we reached our target today, 1220. For the interested, below is a chart of SPX. We clearly see how strong reversals, both up and down, SPX puts in after those typical hammer/inverted hammers/hanging man formations. Today is one of those reversal days.

While the bulls desperately tried pushing the market higher at European close, it is now falling apart. The Dax spike at the close confused some participants. Somewhat peculiar buying pattern, or was the investor so bullish?

Implied vol skew update from Macro Story. Divergences forming….

SPX is up 100 points from the lows this Friday, when Bernanke said nothing. Imagine if he had announced something. Congratulations to all the longs out there, and the ones who followed our view of selling vol, especially as hedge funds collectively hold large SPX shorts, and NYSE short interest hit highs since 2009 a couple of days ago. Teflon Market seems to be back.

With everybody already having forgotten about the first two weeks of August, and now once again turn bullish, please consider below charts. With DAX index being the higher Beta index, one should consider putting on the long DAX/ short SPX spread if you want the bullish trade on.  The spread between SPX and DAX is reaching some rather extreme readings. SPX is up some 83% from the 666 bottom, while the DAX is up some 50% from the bottom, while the USD has depreciated by “only” 10%…..The Trader is arguing the resistance levels about to be hit soon, should slow down the “sudden” opimism in the markets.

By Gold Core,

Gold and silver have fallen after yesterday’s gains due to the very poor consumer confidence data and Federal Reserve murmurings of further monetary easing. Gold is trading at USD 1,792.50, EUR 1,245.10, GBP 1,098.30, CHF 1,471.50 and JPY 137,624 per ounce. While silver is trading at USD 41.21, EUR 28.53 , GBP 25.31, CHF 33.33 and JPY 3,155 per ounce.

Silver Spot $/oz – G1 Daily 8/31/09-8/31/11, Bloomberg Finance

Gold’s London AM fix this morning was USD 1,826.00, EUR 1,264.19, GBP 1,121.14 per ounce. Gold fix was higher than yesterday’s AM Fix which was USD 1,791.00, EUR 1,243.49, GBP 1,097.56 per ounce.

Gold remains less than 5% from its record nominal high of $1,913.50 per ounce while silver remains nearly 20% below its record nominal high just below $50/oz.

Gold has stolen the limelight from silver in recent weeks with gold reaching a series of new record nominal highs.

But silver has been quietly consolidating after the sharp falls seen at the end of April and in early May when many claimed the silver ‘bubble’ had burst.

Media coverage of silver remains nearly nonexistent which is bullish from a contrarian perspective.

Full reading, click here.

Hudson gives some great comments on debt, gold standard, cost of war and bank bail outs.

Interesting thoughts on the US Confidence by World Complex.

For post-1971 I used the assumed holdings of 250 million ounces multiplied by the average annual price (from Kitco). There are those who suggest the true holdings are substantially less than 250 million ounces. That may be so, but the picture is already bad enough if we accept the official numbers.

So, we got the very much expected bounce in the market. We have returned to the no volume HFT melt up market, yet again. Early August action has “destroyed” the Market long term, and we expect all markets to move lower during the course of this autumn. The move down caught people off guard and we got to see massive margin call selling, accompanied with an increased Trading by HFT. The end product of the race to zero (HFT Trading) will eventually be a total breakdown of the system, as no “real” flow will be able to execute redemptions. As for now, just a quick recap of what we argued some days ago, and where we are trading at the moment. Full Chartology will be presented later today.

Posted on the 29th of Aug;

….and this is where we are trading. Smart capital is taking some money off the table, while the HFT churn stocks higher. Greed and Fear, both ways, yet again.