CME sees gold as money

While the mainstream media continues to categorize gold as a "commodity," the world's largest derivatives exchange views it as currency.

The CME now accepts gold to cover margin variation on all CME traded products,

(Bloomberg) CME Allows Gold to Be Used as Collateral for Trading

Gold has outperformed equities, commodities, and other currencies,

in the news: job deflation and naked shorts

While quantitative easing continues to work its magic by nominally reflating risk assets,



CPI and wages are reportedly flat,

(NPR) Social Security: No Cost Of Living Increase Next Year
(AP) Colorado Minimum Wage to Drop as Living Costs Fall

Employment for Wall Street traders is also in decline as the 'smart guys' have replaced the 'average guys.'

The 'smart guys' have become analysts, quants, traders, and risk managers. Increasingly complicated derivatives were developed and sold short in progressively unsustainable size (RIP: LTCM, Bear Stearns, Countrywide, Lehman, Merrill Lynch, Wachovia),

(NYT) Wall Street Smarts
(NYT) Rivals Pose Threat to New York Stock Exchange



Some perspective from the good old days of trading, when 'average guys' with modestly capitalized accounts learned to respect the market. Floor traders knew the practice of picking up pennies in front of trains would eventually lead to unrecoverable losses over the long run,

down with the USD

The short USD trade has become even more crowded.

The blogosphere and news media were lit up yesterday with dollar bearish headlines. The hub bub stemmed from an article by Robert Fisk in The Independent, The Demise of the Dollar.

Gold broke to an all time nominal high, topping the $1032.70 high of March 2008. This is significant and may mark the next leg of the gold bull market when, as Richard Russell believes, the general public finally gets involved.

(2 year reverse head and shoulders formation in Gold)

australian green shoots

Risk is bid on headlines that the Reserve Bank of Australia unexpectedly raised rates 25 bps to 3.25%.

Carry traders unite!

Stocks, Commodities Climb as Australia Raises Interest Rates

the emerging EM trend

The Obamas failed on their bid for Chicago 2016; this may be confirmation of a longer term trend.

Rio Wins 2016 Olympics as Lula’s Lobbying Beats Obama

apple and goldman sachs are on fire

Apple and Goldman Sachs are two large cap names that have outperformed SPX by more than 70% YTD.

Both AAPL and GS have rallied back to pre-crisis levels.

(AAPL in unrelenting uptrend while both XLK and GOOG vs. SPX are trading relatively sideways)


Perhaps these names are in their own worlds. Other indicators of paper assets, such as XLF relative to SPX and GBP, have been losing upside momentum of late.

I am closely watching whether GS and AAPL continue their leadership as confirmation that the broad market uptrend is intact.

(re)allocation

The bid for risk assets has seemingly stalled as we begin the fourth quarter.



Taking a step back from today's sell-off, this may turn out to be another pause in the fastest recovery rally since the great depression.

The bears observe rates breaking lower and the possible bottoming out of DXY.

The bulls will just point to what has been working all year; long the QE uptrend in SPX, credit, and beta.