Greetings Jim,

We now have a slight positive divergence developing between the Gold Currency Index and gold in US dollar terms. The GCI is already testing congestion resistance near 28, while gold remains well below its equivalent resistance level in the $1,152 area. Further, GCI momentum and oscillators have both moved up to recent highs in positive territory, while their gold counterparts are well below their respective highs, with momentum still in negative territory. This positive divergence suggests it has become more likely that gold is preparing to return to the recent all-time high. A break well above that congestion resistance at current levels would be another bullish signal.

Best,

CIGA Erik
Prometheus Market Insight
http://www.prometheusmi.com ^[1]

^[2]

^[3]

U.S. Long Bonds and the Dark Glove
CIGA Eric

In economics, the invisible hand, also known as the invisible hand of the market, the term economists use to describe the self-regulating nature of the marketplace,[1] is a metaphor first coined by the economist Adam Smith in The Theory of Moral Sentiments. For Smith, the invisible hand was created by the conjunction of the forces of self-interest, competition, a ^[4]nd supply and demand, which he noted as being capable of allocating resources in society.[2] This is the founding justification for the laissez-faire economic philosophy.[3]

As supply and demand, competition and self-interests are trumped by the brute force of paper backed by the printing press, the invisible hand has become quite visible in many markets. There is not better example of this than the US long bond futures and options market. Today’s "invisible hand," more like dark glove, is visibly pushing back to maintain support despite the deteriorating fundamentals (rising prices and declining economic activity).

Are you interested in the real statistics and the real story? Here they are. There are nowhere else. I am totally serious.

Commentary No. 280: January CPI, PPI, Housing Starts, Production

- Annual Inflation 2.6% (CPI-U), 3.3% (CPI-W), 9.8% (SGS)
- Quarterly Inflation Shifted from Fourth- to Second-Quarter 2009
- Economy Keeps Bottom-Bouncing as Intensified Contraction Nears

"No. 280: January CPI, PPI, Housing Starts, Production "

THE DARK GLOVE:
US TBd (20 Years +) and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
^[5]

Source: en.wikipedia.org ^[6]
Source: jsmineset.com ^[7]
Source: shadowstats.com ^[8]

More… ^[9]

Jim,

"Considering the ties between the Fed and these big banks, it is not outlandish to wonder if the US taxpayer is secretly bailing out the entire world, country by country, even as our real unemployment tops 20 percent. Unless laws are changed to allow a complete and meaningful audit of the Federal Reserve, including its agreements with foreign central banks, we might never know if this is occurring or not."

Click here to read the full article… ^[10]

CIGA Nick

Dear Nick,

This is what the Fed swaps were all about to other central banks during the height of the credit lock up. That is unspoken, but common knowledge.

It has been done before and it will occur again.

Greece is the new Lehman Brothers. The Greek crisis has as its basis an OTC derivative yet again.

The use of Fed swaps to fund other central banks to do whatever the counterparty, other central banks, pleases to do with the funds is quite legal as it presently stands.

Swaps can be settled, and replaced to infinity if both parties agree.

Regards,
Jim

 

U.S. Dollar COT Diffusion Index
CIGA Eric

The U.S. Dollar’s Diffusion Index (DI), like Gold’s DI ^[11], suggests we are very close to a turn in the dollar.

Setup, talk up, then take it down (or up).

Patience will be rewarded.

U.S. Dollar Index and the Commercial Traders COT Futures and Options U.S. Dollar Diffusion Index (DI):
^[12]

More… ^[13]

Dear Jim,

What event or events do you think will take Gold to your number by the end of the year?

Regards,
CIGA Lew

Dear CIGA Lew,

The answer is a total collapse of confidence in paper as a storehouse of value between 1/1/2011 to 6/30/2011.

Jim

 

Jim,

Please click this link to an anti-MOP tracker… ^[14]

The weekly layoff report shows no relief yet. Humana, Ford and Boeing are among those who cut jobs this week.

Best regards,
CIGA Christopher

The Weekly Layoff Report: No Relief Yet
Paolo Turchioe, 02.19.10, 05:05 PM EST

Humana, Ford and Boeing are among those who cut jobs this week.

New unemployment numbers released this week by the Labor Department don’t bode well for hopes of economic recovery. The number of unemployment insurance claims submitted by first-time filers hit 473,000, up 31,000 from last week’s figure of 442,000.

The less volatile four-week moving average dipped a thousand claims to 467,000, and the number of people collecting unemployment insurance was unchanged from the preceding week’s 4,563,000.

More… ^[15]

Jim,

I was sent this today and thought that the CIGAs would find this "interesting" …and probably quite maddening.

The Indymac Slap in our Face. 02.08.10 ^[16]

It is also interesting to find out who owns One West.

From Los Angeles Times: IndyMac Bank’s new name: OneWest Bank ^[17]

"The ownership group is led by Steven Mnuchin of Dune Capital Management in New York. The bank’s investors include J. Christopher Flowers, who has specialized in distressed bank purchases, and hedge fund operators George Soros and John Paulson."

It is also my understanding that Michael Dell may be an investor.

Could one come to the conclusion that "the fix was in" well before this deal was struck?

Your CIGA in the Mortgage Finance Industry

 

Jim Sinclair’s Commentary

CIGA Ken wants into the financial novel business. The following script has merit.

1. Dark Side takes money from successful Euro short and goes long euro.

Meanwhile and at the nearly the same time:

2. The Dark Side goes short the dollar and long gold during the interest rate hike announcement.

As these trades mature:

3. The Dark Side stalks the Spanish CDO markets, and maybe another weak euro country.

4. As the euro approaches 145, dollar 76-78, gold 1200 the dark side sells euros, covers shorts in dollars and gold.

And then:

5. Crashes Spanish and Italy CDO markets (2 markets at once for effect) on the news of the Greece bailout plan. And then goes short euro, short Gold and long dollar.

6. MOPE like crazy how the Euro nations cannot do anything now once their pockets have been drained by Greece. The cry will be heard around the world for this act 2 horror theatre.

7. return to 1. as warranted by charts, inside info.