Apple and the S&P 500

 I'll begin tonight's post with a quote from Dr. Marc Faber who was recently interviewed on Bloomberg. He had this to say about about the U.S. stock market:

"I think you may recall that last October, in November again and in December I was reasonably positive for equities because the sentiment of investors was very negative and inside selling had diminished and the market was oversold. But right now investor sentiment, if anything, is rather bullish, the market is overbought and insider selling is very high. The technicals have deteriorated in the sense that in this latest rally, in the last two weeks, the number of new highs has diminished significantly. I think we are at the beginning of a more meaningful correction. The market is being driven by very few stocks at the present time...the economic sensitive stocks are not confirming that advance, and not confirming the extremely positive sentiment about the United States economy. I would very careful here and I would take some money off the table."  

As I discussed here last week, the NASDAQ composite and the S&P 500 have been lead by AAPL, which has recently powered through $600/share:

To be honest, I have watched this parabolic rise with envious disbelief. I see no negative divergence here in the RSI, or the MACD -- I don't know when this parabolic move will end but I certainly wouldn't want to go short this stock. 

 It has been overbought for a good two months now, but one can argue that the company is cheap on a P/E basis, as Barry Ritholthz did recently. 

An on-the-floor trader I follow on twitter, @dontfademe, summed AAPL up best this morning (left -- taken from my iPhone, of course). Fortunately, I am smart enough to have never tried to sell-short AAPL, but at the same time I was never smart enough to go long of it either. I remember roughly two years ago, when AAPL was trading with a 2-handle, I thought the run was over. When my own father asked me what I thought of AAPL a year ago, I dismissed it off-hand. I thought I had missed the party completely. Have I missed it now? I don't know, but it is hard for me to imagine this stock powering higher every single day without an extended period of consolidation at the very least. I think this chart and the chart I'm about to show hint at the the point Dr. Faber was making in his interview. Have a look at the following:

There is a quite a bit going on in this chart. First, in the top panel is a daily line graph of the S&P 500. Below that is the S&P 500 A50R, which is simply the percentage of stocks within the index about their 50 day moving average. In regards to Faber's point about the market being driven by very few stocks (AAPL affect) and the lack of economic sensitive stocks confirming the advance -- I think the above charts shows this in stark relief. The S&P 500 has recently made new post-financial crisis highs, but the number of stocks within the index about their 50 day moving average peaked in October. The S&P 500 A50R itself has negative divergence in the MACD histogram. Usually, Dr. Marc Faber is correct in his shorter-term calls and I think this chart supports his opinion. 

The Gold Stocks

30 minute GLD chart from today:

GLD gaped down in the morning, attempted a rally that failed and then sank lower into the close. Gold has been weak lately and the gold stocks even weaker. The thing is, the chart patterns for a couple of the major gold stock indexes today are intriguing to me. I see positive divergence on the MACD indicator. The hammer this morning after the gap down open followed by strength ultimately outperformance of GLD on the day -- bullish, I'd say. GDXJ outperformed GLD on the day by 0.63%

 

I really like the following $HUI monthly chart:

One can see the bull market in its entirety here.Notice in the chart I have the standard 20 period Bollinger Band overlay shown on this chart. Since the bear market bottom in late 2000 at 35.31 on the index, the price of the $HUI has only gone below the lower band three times and has not been below since the panic of 2008. The gap down this morning at 461.72 was outside of the band, but the $HUI rallied strongly up and closed above it for today. Looking back over the course of the bull market in gold stocks, major bottoms have occurred below the lower band. That isn't to say the bottom is in and we rally straight up from here. I believe that if today wasn't the end of this correction, that the bottom will be in soon.

The Future of the US Dollar

I have written here previously that I believe the US dollar, as measured by the US Dollar Index, is the key to understanding the currents of the stock and commodity markets. Typically, stocks and commodities trade inversely to the dollar. This has not been the case, however, for the broad US stock market for the past six months.

Look at the move in the S&P 500 since early October:

The NASDAQ has been an even better performer, led by none other than Apple:

The performance of Apple has been stunning to watch. Clearly it has buoyed the market as a whole since late November. I think it is important to note that Apple makes up slightly less than 4% of S&P 500, and is the largest component of the index. Moreover, it makes up 16.74% the NASDAQ 100 and is the largest component of this index as well. These figures came from an article on the NASDAQ website from about a month ago. The author, like myself and many others, was alarmed by the bearish engulfing reversal candle on February 15th. It was natural to think this was the end of a parabolic move and that the $500.00 price might form a resistance area for Apple. I suppose since many noticed the price action that day and wondered aloud about it, that it shouldn't come as a surprise that Apple powered through that price like a hot knife through butter. It touched $600.01 this past week. Does the parabolic end here? Who knows. If so, I think the broader markets will suffer as well. Apple has a major announcement tomorrow regarding its huge cash position. It will be fascinating to see the market react to this event. 

Perhaps more importantly, the economic outlook has gotten better in recent months: improved jobs data, rising retails sales (Apple effect?), increases in housing construction, expanding consumer credit and enhanced clarity for the largest financials. Ryan Puplava goes on in greater detail in an excellent piece this week. 

Meanwhile, and somewhat surprisingly, the US Dollar index has risen during the past six months as well:

Perhaps the strength in the index is merely a reflection of uncertainty and risk market participant see in the Eurozone. Additionally, the Bank of Japan has eased by ¥15 trillion, finally getting some traction to the downside on the Yen. Sweden, Norway and Australia have also cut interest rates in the past six months. I can go but I think the point is clear: the currency war is in full swing and right now the dollar is appreciating (losing). From a fundamental perspective, the Fed has repeatedly stated that short term interest rates will remain at 0 until 2014. The Federal budget deficit for February was $231.68 billion, up $9 billion from the previous year. The dollar isn't strong at all in my opinion, but the fact is that central banks around the world are loosening monetary policy as well. I expect our central bank to retaliate and ultimately the US may very will 'win' this war, and so perhaps QE3 (or however they term it) is now close at hand.

I've discussed ad nauseum about the importance of the 78.50-78.70 price level for the $DXY. For the past 7 weeks, the dollar has held above it. It has really struggled to hold above 80.00, however. 

In addition to the chart above, I'll show a monthly chart as well:

Over this past weekend, Jim Puplava interviewed Quint Tatro on the Financial Sense Newshour. Quint is positive on the dollar and had the following to say:

"I do think the dollar is sort of bottomed, has bottomed, from a longer term perspective. I think it will the currency of choice, the fiat currency of choice, going forward. But again, its gonna be a move that transpires, like a turtle, slowly."

Looking at the chart above, I think Quint has a point. This past week the dollar index traded at prices seen in November of 2004! The MACD is rising and forming positive divergence. It is not hard to look at that chart and see a base there. From my own technical perspective, I find it interesting that the 55 month moving average for the index is 78.59, right in the area I have been emphasizing on the weekly view.  There are precious few monthly closes above this moving average since the second quarter of 2002 -- and they all coincided with the credit crisis of 2008 or the European sovereign debt crisis(es). 

I have respect for Quint as a trader and also as someone who isn't afraid to express views that are uncommon or unpopular. Certainly, a long term bottom and base for the dollar is not an opinion held by many in the circles that I follow. If Quint is correct, the dollar should hold the 78.50 level and continue to grind higher. He stated that he is accumulating the dollar ETF, UUP. 

I think we are near a major inflection point for the dollar. I think there will be further easing this year and the currency war will rage on, with further exchange rate weakness for the dollar against the Euro, despite its problems. When that 78.50 level is lost, I expect the dollar to enter a new downtrend out of this seven year consolidation period. 

I'll leave you with this brief clip of Kyle Bass discussing the dollar:

Sources:

NASDAQ Community: What Happens to Stocks if Someone Upsets the AAPL Cart?

Fox Business -- February Budget Gap Wider Than Last Year

Zerohedge -- While You Were Sleeping Central Banks Flooded World

Lessons from my Sensei

Whoosh! That was the sound the gold and silver markets made today. I'll begin tonight's post with a glance at my favorite gold daily chart:

From a technical perspective, gold broke down through the important $1,681 price level yesterday. Today, it tested that level and found resistance. It sold off strongly as the day wore on, breaking down below $1,650, an important psychological level for some traders, and also near the longer term fibonacci 233 day MA around $1,653. It bottomed in the evening around $1,635 and as of this writing is has bounced up near $1,647. Does any of this matter? Well, certainly, if you a gold trader. I am not however.

I consider myself a value investor and I use charts as a market timing tool in order to help me plan my purchases and sales. Last week, I noted that when the price broke down through $1,681 that gold might be in the process of carving out an inverse head and shoulders pattern on the daily chart. In the days subsequent to that post, gold has done just that. Was this a brilliant trading call? Absolutely not. Had I been short a gold futures contract after I wrote that, I would have likely been stopped out at a loss as the gold price rose toward $1,720 in the next three trading days. 

The so-called 'London Trader,' who is often interviwed on the King World News blog, was quoted last week stating the following: 

"During this entire takedown in the gold market there has been absolutely no selling of physical gold, only accumulation. You see people saying gold is headed to $1,620, $1,600, $1,500. I guarantee you these individuals do not know what’s going on in the physical market.”

It is true that I don't have any idea what is happening at the LBMA. However, if gold didn't bottom today the implications of the blog piece were certainly erroneous. I maintain that gold could easily test $1,600 in the coming weeks and my basis for that is the chart pattern above and the discussions here previous. Of note, there are no meaningful support and resistance levels between $1,650 and $1,600 in the chart above. Moreover, I do think that $1,600 is particularly important now. An emphatic break below that level (perhaps on a multi-week basis) would negate the inverse head and shoulders pattern. Additionally, it would break the uptrend set from the lows in 2008/2009, as Turd Ferguson pointed out today. I have a lot of respect for Turd and his website, and I feel for him as he lives and dies every day with the gold price. 

For some perspective, let's look at a monthly gold chart:

Several things stand out in this chart. First, periods of time in which gold has become overbought on the RSI have been a warning signal. Q1 2003, Q1 2004, Q2 2006, Q1 2008 and Q3 2011 the gold price became overbought in terms of this indicator. What followed was a drawn out period of consolidation and/or a meaningful correction. Second, the MACD has recently had a bearish crossover. This is a warning sign only, not a signal the bull market is over. Finally, notice how price seems to move away from and then back towards the 34 month moving average. In August of last year, gold was going parabolic in an unhealthy manner. We 'goldbugs' are simply experiencing a consolidation/correction phase. That is all it is! Much of the day to day price action isn't all that important from a long-term perspective. What has changed since 2003 is the way in which we humans communicate with each other. We have twitter, we have things such as the KWN blog, and we have a 24 hour news cycle. In my experience, all the attention paid to the here and now can easily distract one from the bigger picture. A longer-term chart can help to remedy that problem. From the looks of it, gold has more consolidation to do in the coming months, which simply means we can all accumulate more bullion and mining shares before the next leg higher. Martin Armstrong, Felix Zulauf and Marc Faber have all expressed a similar view in recent interviews. 

In that vein, I'd like to discuss an interview of my market Sensei, Mr. Rick Rule, on BNN Market Call. The last thing Rick is is a market technician. What is relevant to the technical discussion above, however, is Rick's views on when to buy and sale bullion and natural resource stocks: 

"If one is trying to allocate capital in a prudent fashion, goods should be bought when they are on sale. The idea that one can get a bargain when something is popular is somewhat contradictory. My experience in the resource-based business is that it is both cyclical and secular -- in a word: volatile! Which means from my point of view you have to be a contrarian or you will be a victim. Kinross is out of favor, it is on sale and I like it."

This is what 'on sale' looks like:

If one has a cost basis of ~$17.00 in KGC it feels worse than this chart looks -- and this chart looks terrible.

I believe that analyzing the long-term technicals of gold is much more useful than evaluating a resource stock such as Kinross from that perspective alone. Rick went on to state:

"People pay too much attention to the share price and not enough attention to the relationship between price and value. When a company performs well, but its share price does not, it sets up a very good opportunity." 

And with that Rick summed up nicely why technical analysis is simply a tool and not an end in itself for the value investor in the resource sector. That being said, understanding the technicals of the gold market can assist one in the timing of a gold share purchase. It does take a great deal more work than that -- this is a reminder to myself more than anything.

Further on in the discussion, Rick talked about Lydian International, a developmental stage company in the gold sector:

"Lydian is selling at a horrendous discount to the values established in the preliminary economic assessment. The hiatus between preliminary economic assessment and the bankable feasibility study is often referred to as the 'boring period.' Usually, in the 18 months to two years between the two, deposits get bigger as exploration continues, they get drilled off on narrower and narrower bases, usually the head grades reconcile higher because of my closely spaced drilling. As the certainty increase, the amount of money you get paid per unit of resource increases. Finally, with the bankable feasibility study, not that this document is the be-all end-all, the third party endorsement allows outside directors of a potential acquirer to have the cover, if you will, to go ahead and make a takeover offer. [Cover Your Ass factor] The arbitrage between PEA and BFS has been a consistent money maker for me for 30 years. The discounts in the market right now; the potential arbitrage between the two, are the broadest I've seen in 30 years in the business. Lydian is particularly broad. A very high quality resource. A high quality management team -- they discovered it, they didn't buy it. We have a lot of time for these people."

This is what the 'boring period' looks like technically:

It is uncanny how the share price has held the 89 week MA on sell-offs and has remained above the 55 week MA for the better part of 18 months. If investors 'like' the bankable feasibility study due out later this year, I suspect the share price of Lydian will advance like it did in the summer of 2010 -- and if the gold price advances along with it, look out. 

Risk Off Day in the Markets

Today in the US, the equity markets the major indexes (The Dow, S&P and NASDAQ) all fell around 1.5% and had their worst trading day of the year.

Zerohedge noted that the price action in equity, currency, commodity and credit markets today was suggestive of a broad de-risking rather than mere profit taking. But then again, Tyler's a little biased and always loves to see the markets sell off.

In tonight's post, I'll examine some charts and explore in greater depth today's market action.

In an interview over the weekend on Financial Sense, Jim Puplava and David Nicoski discussed relative strength among the various sectors of the S&P 500. Thus far in 2012, defensive sectors such as utilities, healthcare and consumer staples have lagged sectors such as technology, financials and consumer discretionaries. This is a marked departure from 2011 when defensive sectors outperformed. Sector rotation took place on the first trading day of the year and these sectors haven't looked back -- until today.

The following is a daily ratio chart of the utilities ETF vs. the consumer discretionary ETF. A falling ratio in this case signals that the consumer discretionary sector is outperforming relative to the utilities:

I've circled the first trading day of the year in red. Investors were clearly bullish on the US economy going into 2012 and couldn't wait to ditch the defensive trade of 2011. The ratio trended lower until recently as consumer discretionary outperformed the utilities. Interestingly, today's sell-off lead to a reversal in this ratio and now investors are pouring back into utilities and out of consumer discretionary. It will be interesting if this has the makings of a new intermediate trend in the equity markets. I suspect that if markets are weak over the intermediate term, defensive sectors will be back in vogue. 

The ratio of the healthcare ETF XLV to the financial ETF XLF shows the same pattern:

I've shown the ratio chart between the corporate bond ETF JNK and the Treasury bond ETF TLT previously in this space. I think it warrants another look today:

The ratio bottomed in early October with the US equity markets and has trended higher since. It seems clear to me that price has broken down out of the rising wedge today. I find it somewhat interesting that the ratio topped in late October and hasn't been making new highs in 2012. 

Changing gears, here is a Palladium which had a big sell-off today:

I don't pretend to know much about the palladium market, but from a technical perspective today is quite ugly. After more than quadrupling off its lows in late 2008, all with little if any fanfare I might add, palladium has been weak for the last year. I suppose it shouldn't come as a surprise that it was the best-performing precious metal between late 2008 and early 2011 (simply because it went largely unnoticed even in the precious metal friendly circles I follow). A consolidation is healthy from a longer-term point of view, but it sure looks to me like it is headed for a test of $600/oz in the short-term. 

Here is the daily view of gold I've been following and showing here:

I noted last week that the gold price looked like it may want to carve out the right shoulder of an inverse head shoulders in the coming weeks. Today's action suggests that may turn out to be the case. Of note, gold today fell through the $1,681 angel. I think a test of $1,650 is possible in the short-term. In the intermediate term, if the markets decide to go into 'risk-off' mode, $1,600 is certainly not out of the question. Look at the chart above; if gold drifted lower in the coming weeks but found support at $1,600 wouldn't that be wonderfully constructive from a technical perspective? It would also mean that many investors in the GDX and GDXJ companies would be jumping out of windows, which would be wonderful for buyers like me, of course. Time will tell and price is king. 

The technical story with silver is similar to that of gold:

Silver could not maintain a weekly close above $36.00 last week and has since reversed emphatically to the downside. Wonderful! If the scenario I laid described above for gold plays out, I'd be shocked if silver didn't follow suit. I'd expect it to find support at the nice round number $30.00. If so, again, wouldn't price trace out a beautiful head and shoulders bottom? I'll be on the look out for this in the coming weeks and I'll be sure to documents whatever happens here on this blog.

Sources:
Zerohedge -- Financials Implode as Volume and Volatility Explode
Financial Sense Newshour -- Technician David Nicoski

AIG, LTCM and Cell Biology: Lessons in non-linearity

I hear and I forget. I see and I remember. I do and I understand. ~Confucius

I open tonight's post with this particular quote by Confucius because I want to challenge myself, and perhaps even you, dear reader! I don't merely want to listen to soundbites or watch YouTube videos, I want to master the knowledge therein -- this is why I write.

The name of this blog is Chartwatchers, and up until now, I have focused my discussions here on price changes over time, moving averages and momentum indicators. While I certainly believe technical analysis is vital and should play a role in investing decisions, it is first and foremost a trading and market timing tool. Analyzing the dynamics of a complex system, for example, cannot be done by examining changes in price over time alone.

To illustrate this, here is a weekly chart of American International Group (AIG):

In October of 2007, the share price of AIG broke down through the 200-weekly moving average, a sell signal. It continued to sell off through November and then rallied and re-tested the 200 weekly MA. It failed there in December and drifted lower to end the year, another warning signal. If an AIG investor listened to the market here and sold, they would have avoided one of the greatest collapses in history. However, there was nothing in the chart at the end of 2007 that suggested AIG would collape by ~99% in the following 15 months. The chart didn't inform investors that AIG had issued tens of billions in CDS that would trigger when the sub-prime MBS market collapsed. Furthermore it didn't say that because of corporations like AIG Financial Products, the global financial system would be pushed to the brink of complete collapse. That isn't to say that technical analysis wasn't useful -- it undoubtedly was. However, I'd like to focus today on the bigger picture, rather than merely the price of an asset over a fixed period of time. 

James Rickards is an expert when it comes to analyzing the financial system in terms of complex system dynamics. He was recently interviewed by the BBC and I thought he did an excellent job explaining why this is the best way to understand asset markets. He stated the following (I paraphrase here for clarity and succinctness):

"Think of an avalanche. There is an unstable pack of snow; a snowflake lands on it and disturbs a few other snowflakes around it. That grows. It turns in a snowball, it turns into a cascade and the next thing you know you have an avalanche and it buries the village. The snowflake that caused the avalanche isn't the key, the key is the unstable mountainside. This is why ski patrols go out and throw dynamite in the morning because they are trying to de-scale the system. As applied to capital markets, we have massively scaled up the system through derivatives, off-balance sheet products, CDS, leverage; many many other techniques. What they have done here is create a massively unstable snow-pack. 

I find the example of an avalanche to appropriate and easy to understand. Jim excels at this. The interviewer then asked what should be done:

"CDS serve no purpose whatsoever. The other thing is to break up the big banks. When I started in this industry, J.P. Morgan was actually four banks; it should be four banks again. That way we don't have to worry so much about trying to micromanage the regulation: let them fail and they won't take down the whole system. An analogy would be a vessel. If you build a ship with water-tight bulkheads, one can be breached and fill with water, but the ship itself won't sink. 

I particularly admire how Jim handles journalists. At this point, he was cut-off and accused of having radical ideas and being outlier. He took it in stride and went on to elaborate on his point:

"What happened in 2008 was a larger scale version of what happened in 1998 at LTCM, with that hedge fund collapse. I happened to have been the general counsel and the lead negotiator of the rescue of Long Term Capital...None of the lessons of that collapse were learned. The lessons were clear: too much leverage, too many derivatives, nontransparency and an incorrect understanding of the statistical properties of risk. None of the lessons were learned. In fact, the government doubled-down in the years following LTCM under the guidance of Bob Rubin, Alan Greenspan and Larry Summers.

The following part of the interview is critically important to understand when it comes to analyzing how we go to where we are today: TBTF, the Tea Party Movement, #OWS and the general lack of trust in bankers and politicians now pervasive in society. Jim continues:

"They deregulated the swaps market when they should have abandoned it. They allowed banks to become hedge funds by repealing Glass-Steagall when they should have reinforced the firewall. They did the opposite of what should have been done; is any surprise that ten years later we got an even greater collapse? [To the players in the financial system who caused the collapse] there has been no punishment. I wish there had been more pain and punishment but there hasn't been. We heard a lot in 2008 about Too Big To Fail. The five largest banks are now larger than they were in 2008; they have a higher concentration of banking assets and more derivatives than they did in 2008. If that was the problem then, it is a larger problem now. 

Rickards ends the interview with a discussion of risk and non-linearity which I found fascinating:

"Risk is an exponential function not a linear function of scale, meaning that if you triple the system, you don't triple the risk you increase the risk by a factor of ten or perhaps one hundred. Of course Wall Street will tell you that there is no risk because they use Value At Risk (VaR) where you net longs and shorts. They pile on long-short, long-short positions  and they net them out and say, 'See it is zero. There is no risk.' In fact, the science indicates that the risk is in the gross and it is an exponential function -- meaning it grows faster than the balance sheet. This is going to lead to a greater catastrophe. 

Jim concludes the interview with the following solutions: ban OTC derivatives, break-up the big banks, separate commercial banking from risk taking (investment banking). On a historical note he states:

"You know we went through this before in the Great Depression. The Congress of 1934 investigated the abuses of the 1920's thoroughly and what they said was that from now on you can take deposits and make loans or you can underwrite securities and sell them to customers but you may not do both because the abuse was originating garbage loans and selling them to your customers. In 1999, Glass-Steagall was repealed and over the following years banks originated garbage loans and sold them to their customers. Are we really surprised that the same behavior emerged immediately and lead to the same result -- except worse?

--

The concept of non-linearity and incorrect assumptions of the properties of risk intrigues me greatly. Having read the Black Swan and other works by Nicholas Nassim Taleb, I tend to notice when people apply linear models and thinking inappropriately. Simply put, we live a non-linear and random world. In fact, non-linearity is at the core of our very being. As a simple example, for my day job I research human cancers. For the past 8 weeks, I have been culturing urothelial tissue and exposing it to the chemical oxidant, 4-hydroxy-TEMPO. Cells grown in absence of 4-h-T typically double in 16-20 hours. If grown in the presence of 0.1 milliMolar (mM) 4-h-T, doubling time increases by a factor of three. When grown in 0.5mM 4-h-T, the cells essentially stop growing. If exposed to a dosage of 1.0mM, 99.9% of the cells die. Interestingly, research suggests this compound may be useful in treating certain diseases. Dosage is all important -- too little and it has no effect; too much and you kill the patient and this relationship is non-linear. 

Leap Day

When I awoke this morning I listened to a couple Bloomberg Radio podcasts and then made my way to work. Gold looked weak but it was trading above $1,770; silver was firm.

After I got settled at work, I checked the gold price and saw this:

I laughed out loud. What else can one do? I think technical analysis is quite useful [obviously] but I don't think many chartists foresaw a $100 intra-day drop for gold on Leap Day.

Here is the daily gold chart I've been following:

Notice how gold stopped right at the 89 day moving average support...I'm mostly kidding. Stan Weinstein remarked over the weekend in an interview with Jim Puplava that if one draws enough moving averages on a chart, he is bound to find support and resistance eventually. That is what is demonstrated in this chart today. Whether or not the 'cartel' or the 'EE' is intervening in and controlling the gold market, it appears to me that price may carve out an inverse (BULLISH) head and shoulders pattern over the next 6 weeks. 

To trade gold is folly. The dollar cost accumulation approach has been and will continue to be the best investment strategy when it comes to investing in physical gold. 

Here is a modified weekly version of the silver chart I've been showing:

I have removed the Bollinger bands and added horizontal lines for 36 and 49 -- they are 'square of the numbers' prices like $1764 is for gold. Naturally, they've have proven to be compelling support and resistance since the initial breakout in 2010. If silver heads south from here for the next few weeks, perhaps it will trace out a right shoulder. The sell-off in gold today was overdue in all honesty, as Jean-Marie Eveillard pointed out today on KWN. 

Simply put, this sell-off in gold and silver is a gift to the accumulators and wise speculators. I wouldn't be surprised in the least if it were orchestrated to flush out stops and weak hands. 

Finally, there is this news item from today:

In my early morning haze, I noticed Tyler mentioning this but I didn't follow up on it until later in the day. When I read this article, I felt a little stunned. I honestly don't know what to make of this. Ron Paul, in full campaign mode, brandishing a Silver Eagle in front of Bernanke on Leap Day as the metal trades down over 5% intra-day? Honestly? Could this merely be a coincidence? Color me skeptical. Regardless, it shows that the truth really is stranger than fiction. And this is why I enjoy following financial markets each and every day.

Sources

Forbes -- Ron Paul grills Bernanke over inflation