US dollar index rose a leetle today, just enough to bump up against resistance at 95.30. Can it punch through? Indicators don't favor it. Rose 18 basis points (0.19%) to 95.30. I remind y'all the dollar's position is precarious, but not fatal until it falls through 92.50 support. Till then, the jury is still out on whether the buck can resume its rally.
Euro's chart doesn't particularly inspire me, either. It jumped up on the dollar's bad luck, but traded back down into a gap and now shows all the energy of a dead pig in the sunshine. Down 0.26% today to $1.1241.
Y'all really are watching an "historical" event, namely, the dissolution of Europe and a 2000 year old civilization. Better the Holy Roman Empire by far than this chiseling, whining, self-indulgent & self-deceived indecision.
Japan is in the same boat with Europe, a demographic nightmare where shortly their aging population will be spending more for adult diapers than they do for food. Yen today lost 0.36% to 89.32. Consolidation area is either a top or breath-catching for another run higher.
Stocks wanted to fall today, and by 11:00 were down 50 points. Friends came in about then and bid the Dow up to close at 17,623.87, up 21.57 or 0.12%. S&P rose a magnificent 2.02 (0.1%) to 2,051.60. Cheering was muted.
One thing y'all had better never forget about human nature is that everybody would rather hear a comfortable lie than an uncomfortable truth. Deceive me, but don't disturb me. That's why markets and civilizations fall over cliffs. Right now the stock markets are believing what they want, namely that central banks will keep the liquor -- cheap new money -- flowing so the party can rock on. They don't realize that the band has died. All the same, Dow has risen for seven of the last seven days. Both major indices stand above their 200 day moving averages. In the end, stupid is incredibly long-lived, although eventually reality catches up with it.
Dow in gold has crossed its 50 day moving average, which is a likely target for a turnaround. Dow in silver is jiggling around that 50 DMA, too, but seems more likely to reach its 200 DMA before it turns around.
Gold dropped back $10 (0.8%) to $1,243.80 on Comex. Silver gainsaid, rising 3.5 (0.22%) to 1584.1¢.
The ratio has fallen from a high (on this End of Day Chart) of 84.38 down to 78.51 today. More important, it has fallen to its bottom channel line. If it hits that line, it must either punch through or react back toward the upper boundary, as it has since last October.
What would a punch through need? Runaway SILVER PRICE over 1625¢ & pounding leather for 1800¢. Maybe, but oftentimes during gold & silver rallies, silver outperforms toward the END, not the beginning, of a rally. So its present location near that bottom range boundary looks more like and end than a beginning.
A reversal upward would need only a GOLD PRICE correction, which seems to be taking place. Silver often rises faster than gold, but almost always falls faster. Faster falling silver would raise the Gold/Silver Ratio. (It's a fraction, folks.)
Then we've got silver, still paying out that bowl formation.
Yep, the chart is messy because all this action is messy. I keep thinking silver will drop once more to complete the right shoulder of an upside-down head & shoulders bottom. Right now it is caught between the extended rising edge of that bowl and 1600¢ resistance (Neckline?) it cannot penetrate. Something will give, & it looks like it will be silver on this first try.
This is a dangerous game. I cheerfully admit that if silver does burst through 1600¢ it would run to 1830¢ or so. Still, it think silver must see that correction first, to purge the optimism and ready itself for another rally.
Today gold closed below its 20 day moving average -- not much, but it's a break. Panic would follow a close below $1,225. RSI is pointing down, along with volume, the MACD, Rate of Change. Commitments of Traders remain bearish. Not much positive to point to. Needs a correction. Any close above $1,290 would knock all that in the head and send gold shooting for $1,310.
This is Holy Week. I will not send out a commentary on Good Friday.
Aurum et argentum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
© 2016, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.
WARNING AND DISCLAIMER. Be advised and warned:
Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.
NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.
NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.
NOR do I recommend buying gold and silver on margin or with debt.
What DO I recommend? Physical gold and silver coins and bars in your own hands.
One final warning: NEVER insert a 747 Jumbo Jet up your nose.