|Dow in Gold Dollars (DIG$)||300.94||292.43||-8.51||-2.8|
|Dow in gold ounces||14.56||14.15||-0.41||-2.8|
|Dow in Silver ounces||1,182.87||1,142.70||-40.17||-3.4|
|US dollar index||94.62||94.22||-0.40||-0.4|
Bad week for stocks, good week for Gold and Silver Prices, rotten week for the US dollar index. I have now reached the point where I am no longer certain that silver & gold will make any deeper correction.
Stocks have rolled over & are within a gnat's eyelash or falling through the 20 day moving average (17,543). Dow somehow clawed in 35 points (0.2%) to close at 17,576.96, but only after falling steadily all the day long until finally it fell under unchanged. In the last 24 minutes of trading, the Dow climbed out of loss-land to end the day and week "Up", useless as it was to anything but putting lipstick on a pig. S&P500 added 5.69 (0.28%) to 2,047.60. Here are the charts, http://schrts.co/Q6KUW0 and http://schrts.co/vtdPMb
"Why do I suspect thee? Let me count the ways." First the chart went into a rising wedge, walked out of the wedge, then rolled over in lower highs and lower lows. MACD indicator has turned down, RSI points down, and the Volatility Index ($VIX) has bottomed and begun to rise, leaving behind its 20 DMA. Chart's at http://schrts.co/Y2imfq
The volatility index, I remind y'all, measures the investor Fear Factor from Smug to Terror-stricken. Low readings are smug, high readings are Terror-stricken. Vix made its low (Smug maximized) on 1 April. Once Smug hits the lower boundary, the VIX tends to rocket toward Terror-stricken in 2-3 weeks, maybe a little longer. But don't pay me no mind. I ain't nothing but a nat'ral born durned fool from Tennessee living on a gravel road in the woods.
A moving average takes the last price of a number of days and averages them. Next day it drops the oldest price and picks up the next day's price, so it smooths out the fluctuations of daily trading. The 20 day moving average is the first tripwire of a change of direction It sounds the alarm that the market may be turning around.
Today the Dow in Gold crossed below its 20 DMA, and the Dow in Silver at 1,142.55 oz stands only 2 oz about its 20 DMA at 1,140.28.
What does that mean? That the DiG & DiS are confirming a downturn in stocks.
I'm starting to worry about the poor old scrofulous, scurvy US dollar index. Looks puking sick, sick as a dog eating pizened meat. Look for yourself, http://schrts.co/IKuNji
We've been watching the downtrend line from the March 2015 high, and today the Dollar Index finally closed below that line, after sliding down it for six days. Now this does not break it's back ("is not dispositive", as the lawyers would say), but it shore do look bad. Critical breakpoint here is 92.50. Below that the dollar index will sink like your wife's engagement ring down the garbage disposal while it's running.
The Silver Price rose a percent and a half today (22.6¢) to 1538.2¢ at Comex close while gold added half a percent ($6.30) to $1,242.50.
Despite the gains, daily charts look directionless, or at least, not impulsively upward. The Gold Price today closed right at resistance, call it $1,240 - $1,245. Thing about resistance is, it's like that other thing that you either are or you're not. No "partially breaking through resistance," you either punch through or you fail.
Gold failed. That doesn't promise it won't come back Monday & succeed, but it didn't today.
Still holding gold up is the uptrend line from the January low, now running with the 50 DMA. http://schrts.co/nKHvu0 So gold persistently refuses to break lower, but at the same breath refuses to clear $1,245. When the stalemate breaks, it's liable to shoot a long ways, either direction.
I keep telling y'all time is running out for lower gold and silver, since I expect the correction mood will leave them by 15 April. May have already.
Gold silver ratio fell one percent from its high for the move yesterday at 81.565 to 80.776 today. Says something, but don't say it very loud. Would be more encouraging to see it fall through the 20 DMA at 80.37.
Silver chart is here, http://schrts.co/d4gpx7
Unlike gold, silver did not hold that uptrend line from the January low, but it also didn't break down. Low so far has been 1478¢, enough to satisfy me. Silver must polevault over 1600¢ before it proves anything. Before that it must hurdle 1550¢.
I am no longer persuaded that silver and gold will move lower. With every day that likelihood dwindles. If the US dollar falls through the open manhole at 92.50, silver & gold will soar.
Y'all enjoy your weekend.
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.