My Dear Extended Family,

Jim,

Although you have said the technicals are just painted charts, I was heartened by yesterday's action as most gold stocks were up on heavy volume except TRX, which did volume and didn't make a new low. It looks like a bottom to me.

I guess the perception as we go over the cliff is that the Fed will do more, although I can't imagine what more. Am I too optimistic that my pain is over?

Thanks for your help,
CIGA Jack

Dear Jack,

I will speak to what I know takes place.

Friday was a combination of multiple factors, all executed on or near the close. MOC is an order that is to be executed at the market at the close.

A fund manager is usually paid not by the closed trades alone, but rather by the inventory value at any closing period. A closing period is determined by the fund prospectus. There are various causes for the mixed action on high volume at the close of the NYSE and NASDAQ.

1. Index funds balance positions as they are held by percentages. Some have too much of a share. Some have too little. So there are funds buying and selling on a common closing day, all MOC.
2. A fund wanting to mark a stock down and show a break even or profit in the position sells 1.5 million MOC on their last trading day for the year. Sure it is illegal and manipulation, but regulators representing Washington that is owned by Wall Street do not care.
3. When you have options maturing on a specific day there are trades in a stock by the writers and holder offset their obligation or positions which increases trading volume.
4. The presence of a MOC order is known by the specialist on the floor at least 15 minutes before the close, and can easily be taken advantage of by those who laugh at regulations, the financial community.

There were many MOC trades on gold shares yesterday. Many more were down ticks, not up ticks. MUX was up but that might have been traders bearish on the recent MUX rights offering and option positions closed. Please note $4.12 is some sort of a magic number meaning what, I am not sure. Not TA.

This is the world we live in as the "new normal wild West" in finance. It has absolutely nothing to do with the fundamentals in any company that traded heavy at the close yesterday. It has all to do with the demonic giants that are playing in your sand box.

Regards,
Jim