Gold Chart updated

Here is an updated 12 hour gold chart showing the resistance level between 1620-1630 which so far has been able to hold gold's upward progress.

Note that gold did spike below the $1600 briefly out of disappointment with the comments from the FOMC but rebounded as dip buyers believe (hope springs eternal) that the Fed will certainly act next month. Also some are expecting some gold friendly statements from the ECB as far as measures they will undertake to support the Euro and deal with the sovereign debt issues over that way.

Regardless, the market failed at the upside of the newest congestion zone and thus remains trapped within that pattern albeit with a slight upside bias at this time.

New Slogan - Ban the Machines

To add to the plethora of bumper stickers promoting nearly every cause in the universe, "Hug a Tree", "Save the Whales", "Think Green" and my favorite "Dads Against Daughters Dating - DADD", maybe we can all add this one: "Ban the Machines".

I am of course referring to the near biblical plague on the financial markets otherwise known as the High Frequency Trading Algorithms.

There is no redeeming value whatsoever in these things - none.

Knight Capital Trading Glitches Strike Wall Street

Wall Street was hit by a messy opening on Wednesday due to technology glitches at Knight Capital Group (KCG: 7.99, -2.34, -22.65%), causing confusion and shares of the market maker to plunge more than 20%.
The Securities and Exchange Commission is talking to the New York Stock Exchange over erroneous Knight Capital trades, sources told FOX Business's Charles Gasparino. The SEC and NYSE are examining possible algorithm mishaps and looking into a possible “fat finger” trading error, while Knight told Gasparino it is looking into the trading problems.


Read more: http://www.foxbusiness.com/investing/2012/08/01/nyse-reviews-early-morning-trades/#ixzz22JezZAj3

 

Chatter begins that Ethanol Mandate is going to be Cut

I mentioned a short time ago that talk was growing - scratch that - extreme disgust was growing - among livestock and poultry producers - concerning the federal mandate for ethanol. In the midst of the most extreme drought to hit the US corn and bean growing region since 1988, supplies of corn have been shrinking to very tight levels. However, a good deal of this can be attributed to the federal mandate requiring ethanol blended gasoline. Some of you may know, but this ethanol comes mainly from distilling corn.

As a matter of fact, approximately 40% of all corn demand goes to this boondoogle. While the by product of ethanol demand, DDGS, can be fed to livestock, the facts are that without this mandate, a large share of the corn grown in this nation would be otherwise available for feed use, something that has not been lost on the nation's livestock and poultry producers who are suffering extreme hardships as they watch their feed costs escalate into the stratosphere, destroying their profits in the process and threatening their very livelihoods.

I suspect that this the level of this outrage is going to continue to increase in the weeks and months ahead. I also suspect that more and more pressure is going to be brought to bear upon the policy makers to temporarily rescind this mandate to alleviate the tightness in the supply situation for corn.

The question is whether this comes prior to the election or after the election. Keep in mind that Senators and Congressmen from farm belt states have generally been in favor of this mandate as it has, in the past, helped push demand higher for corn and thus favored a large number of their constituents. However, Senators and Congressmen from those states with large concentration of beef, dairy, pork and poultry producers have tended to be on the opposite side of this issue.

This could very well turn out to be a tremendous factor in determining when the bull market in corn comes to an end. A temporary rescinding of the mandate would lead to a decent sized drop in the price of corn and would tend to lessen some of the recent upward price pressures on the entire food complex.

We will continue to monitor this situation and keep the readers posted.

US Olympic Metals Winners - Introduction to Taxes 101

You push your body beyond the point of exhaustion. You spend endless hours away from friends and family honing your skills. You travel from city to city, from state to state and from country to country competing gaining experience in your sport. You have little spare time to enjoy the smaller things in life. While friends and acquaintances are texting and chatting about the latest movie or music video release, you are at the gym, in the pool, on the track, etc. Why? Because you are driven by a desire to be the BEST in the world.

After enduring the hardships, frustrations, trials, tribulations, setbacks, you finally succeed in making it to the Olympics to represent your country. There all the years of training and dedication finally pay off and you finish in the number 1, 2, or 3 spot, claiming a metal that shows the entire world you are indeed the best or among the best in the world. And then what...

If you are an American, the IRS comes knocking on the door with its hand out taking its "fair share" of your earnings.

Go for the Gold! (Pay the IRS.)

10:35 AM, Aug 1, 2012 • By JONATHAN V. LAST

Because conservatives are scrooges, the good folks at Americans for Tax Reform have gone through the fine print to find out what our Olympians will have to cough up to the IRS should they be lucky enough to win any medals in London.

Even by the standards of our government, the numbers are insane.

For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

To read the rest of the article, please click on the following link:

http://www.weeklystandard.com/blogs/go-gold-pay-irs_649187.html