|Silver Price, cents/oz.||1,750.70||1,711.50||-39.20||-2.2|
|Gold Price, dollars/oz.||1,292.90||1,271.90||-21.00||-1.6|
|Dow in Gold Dollars (DIG$)||283.65||285.00||1.35||0.5|
|Dow in gold ounces||13.72||13.79||0.07||0.5|
|Dow in Silver ounces||1,013.34||1,024.56||11.21||1.1|
|US dollar index||93.88||94.59||0.71||0.8|
'Twas a grueling week for stocks and a grind for precious metals. US dollar index broke out of its downtrend. Now, can it make good on the promise? Stocks will see a big break soon. Woeful weeping draweth nigh.
Stocks barely got their nose above water this morning, then began to sink, sink, sink. After one little bobble up for air around 11:30, they sank the rest of the day.
Dow tacked a 185.18 point (1.05%) loss today onto a 217.23 point loss Wednesday, & closed down the third week running at 17,535.32. S&P500 ditto, down 17.5 (0.85%) at 2,046.61.
Right, a head and shoulders pattern. Look at the S&P500, and you'll see that like the Dow, it fell through its 50 day moving average today & is knocking on the neckline. Only about 34 points lower stands the 200 DMA. The fall will accelerate once it cracks that 200. Also, the MACD shows momentum has turned down, as does the RSI. Lo, I know not when, but soon, soon stocks will tumble sharply.
Stoking my expectation stocks will fall, the Dow in Gold & Dow in Silver have resumed their downtrend, having corrected upward from February to mid-April. Charts are at http://schrts.co/8Sv0tc and http://schrts.co/ohwLZP
Yea, the US dollar index finally broke out of that downtrend that hath reigned & ruled since March. It cracked the upper boundary line and almost touched the 50 DMA (94.87), rising 47 basis points (0.49%) to 94.59. I have the same interest in watching the dollar, the yen, and the euro that you would have watching three scrofulous, ragged, louse-infested beggars on crutches run a race down a garbage-strewn alley. That gives you a better picture of the essential nature of what you're watching.
But my loathing leads me astray in digression. Back to the point, the scurvy dollar, destroyer of economies, looter of the globe, vampire slave of the banks, did prove by that breakout that it turned up at the 3 May low. However, its lethargy, sloth, & laziness thusfar do not conjure notions of a brave advance in my mind. More like a lurk, or slink.
Mercy, I hate central banks worse than a mongoose hates a cobra or a mockingbird hates a tomcat, and for the same reasons: they are destroyers, and evil.
Yen unaccountably rose 0.40% today to 92.05. Euro accountably fell 0.58% to $1.1308.
Gold floated up $1.60 to $1,271.90 on Comex in lackluster trading from $1,264 to $1,277.70. Silver added a tee-tiny, wee 2.8¢ for a 1711.5¢ close. Gold/silver ratio dipped to 74.315.
Best thing I can say for silver & gold today is that they held and rose in the teeth of a rising dollar. True, 'twas no astounding performance, but positive.
Go look at silver's chart: http://schrts.co/EavWIe
Lo, this is a mighty chart. It broke out of a bowl in February, traded sideways for what appears to be the handle of a cup & handle pattern, then broke out of that for another run to the highest price since January 2015. But this chart is also weary, ready to sit down & rest & blow a minute.
Now look at gold, http://schrts.co/Q87QYo
Also a mighty strong chart, slung up out of that bowl like a shot, then staying up there. But that trading channel points up, which loudly whispers a correction is coming.
Note these chars prove that the December bottoms ended the post 2011 correction. I don't doubt that, or that a 5-8 year upmove has begun.
What eats at my immediate expectation? Those Commitment of Traders reports for both metals. Large Speculator positions are larger than they have been for, oh, 16 years. Thus both are severely overbought. Yes, I know overbought can get overboughter, but at some point a correction must work off that large spec position. It's hot money with no loyalty.
What if I'm worrying about nothing? What if silver & gold have puffed out those speculator positions because of something the market sees, but we can't see individually? Well, you'll know because Gold will break out through $1,308 & silver through 1805¢. Won't be any question.
Durned if a customer didn't ask me again today did I think he ought to buy now or wait. I tremble at that question, because on any given day there's a 50% chance he's right, and a 50% chance I'm right, so I have no business substituting my judgment for his. Besides, that, sure as I say, "I think it may correct" he'll not buy and forget to come back to it, and miss a gigantic bull market. My calling, my mission in life is to persuade people to buy silver & gold. It's the only way out of the central bank trap.
Listen, folks, what I do here from day to day is entertainment, guessing at what the market will do the next day, but it's all short term focused. Truth is, the difference between your buying $17 silver and $16 silver won't look as big as a gnat's toenail a year or two years from now. Y'all are not trading in & out every day, you're investing for a 5-8 year move. If that doesn't promise to be big enough to make that $1 difference between $16 & $17 laughable, there's no point buying it.
Yesterday Susan & I got to Chattanooga in time to eat at our favourite restaurant in the world, The Boathouse, last night. I went to the foot surgeon today for my one week post-op bandage change, and other than having what looks like Frankenstein toe with all the stitches, I am healing very well. Thank you all for your prayers.
Driving back I've been thinking about y'all all day, and the two most important things I could possibly impart to you.
First, EAT CLEAN. Stop eating poisoned, processed, sugar-crammed food and start eating fresh, locally-grown, nutrient dense food. Find local farmers to buy meat and eggs & vegetables from, no herbicides, no pesticides, no hormones, grass-fed meat. Look your farmer in the eye & know who is raising your food. Shop local farmer's markets. You'll get sticker shock at the prices, but after you've eaten just one pasture raised chicken, you'll pay it every time -- the taste is that good, & your body is longing for those nutrients, 7 your family's health is worth the price. If you have no clue what I'm talking about, start at the Weston A. Price Foundation website, westonaprice.org.
Second, GET OUT OF DEBT. You are not free as long as you're in debt. Write down all your debts and start a DEBT CASCADE. Pay the minimum on every bill but the smallest, & pay the most extra you can on that until it's paid off. Then attack the next largest, & the next, & suddenly you'll be able to see your mortgage paid off.
Never work for you? Try this. Write down everything you and your spouse spend for one month, every penny. Add it up in categories at month's end, then make an envelope budget. On each envelope write the category and amount. Cash your paychecks & divide the money among the envelopes. When the envelope is cleaned out, you can't spend any more that month on that category. The envelope budget will straighten out your finances and get you on the road to debt freedom in two measly months.
If you're in debt, you ain't free.
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.