|Dow in GOLD $s||283.95||-3.56||-1.24%|
|Dow in GOLD oz||13.74||-0.17||-1.24%|
|Dow in SILVER oz||1,017.12||-16.06||-1.55%|
|US Dollar Index||94.49||-0.07||-0.07%|
When roosters quack & ducks crow, you wonder what's going wrong. When markets don't act right, you wonder what you're not seeing. Dollar index tried one again today to clear its 50 DMA (94.76) and failed second day running. Lost 7 basis points (0.07%) to 94.49.
Not fatal, but like a rooster quacking, it makes you ask, "Why?" And moreso because it comes atop a slothful, lethargic rise off the early May low. So far nothing at all about that rally looks like anything more than a routine upward correction in a ruling downtrend. But what do I know? I'm no more'n a one-footed nat'ral born durn fool from Tennessee. Right now if I got into a kicking contest, I'd have to borrow somebody else's foot.
Other stinking, scrofulous, scurvy, scabby fiat currencies went nowhere today. How they ALL fell and the dollar index fell, too, I am not quite mathematically certain. I reckon they're falling out of this world backwards!
It's tough enough being the only practicing non-communist in the USA, but worse would be owning stocks. Oh, yea, they were a-jubilatin' & a-drinkin' them martinis on Wall Street yesterday when the Dow rose 1%, so today I reckon they're drinking vinegar, ipecac, & milk-of-magnesia because it dropped 1.02%. Yes, lost 180.73 to close at 17,529.98. S&P500 did not disappoint, either, dropping 19.45 (0.94%) to 2,047.21.
Today the Dow in fact closed below the neckline of the Head & Shoulders top it has been drawing, & it goes without saying below its 20 & 50 DMAs. http://bit.ly/1YA7s1u That head & shoulders measures to a target of about 17,000, and that right soon.
Listen, this is NOT entertainment and I am deadly serious. Mark my words: get out of stocks. Get out. Outlook for next 5-8 years is to lose 50% or more from the 18,312.39 high from last May. In case you're slow with a calculator, that means it will drop to 9,156.20 OR LOWER. Stocks will lose 85% of their present value against silver & gold.
If I did nothing more than look at the gold/silver ratio, I would conclude that this metals rally probably has further to run. Rallies take the ratio DOWN, & in spite of correcting for two weeks and more, the rally has not managed to break through the 200 day moving average above or the lower range boundary it broke getting here. Ratio appears set to move further down.
Silver rose 9.3¢ to 1723.5¢ and gold added a measly $2.80 to $1,276.20.
Both are rattling back & forth, trapped like a tiger and trying to break out. Look first at the gold chart for something new, http://schrts.co/AqN5pJ
Blue-dotted line shows an even sided triangle, and gold has traded out into the tight nose cone. Above $1,287.50 gold burst out upside. Below $1,270 gold crashes to the earth. An even-sided triangle says nothing about which way it will break, only that it will break soon.
Now look at silver, http://schrts.co/t9IUae
Silver has outlined a falling right triangle. As a general rule, these triangles are supposed to break downward, but I have often seen them serve as a consolidation and break out upwards. Odds favor a downside breakout, and momentum has slowed and turned down. Yet for all that I can't shake a reluctance, a trembling in my tongue, to say silver & gold will fall.
I'll be delivered shortly, at least. These triangles are swiftly coming to their point.
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.