'Twas a pretty strange day in silver & gold. Pretty strange. 'Twas even strange in stocks.

Stocks stayed underwater all day, never even bobbing above the surface for one second, until the last 30 minutes when they raced up from 10,411 to end the day at 10,808.71, up 153.41 or 1.44%. S&P rose 24.72 to 1,123.95 (up 2.25%).

Sure, there were lots of reasons that rally makes sense. Moody downgraded the Italian government's credit rating today three notches to A2 while Greeks are striking, & Greek gov't. now admits it can't meet the Troika's demands & so will not get its bail out money on 13 October. Meanwhile, Bernard O'Bama is scooting around the country selling his snake-oil stimulus, building more four lane roads to nowhere.

Truth is, only reason I can find on the bounce is technical. There's a downtrend line parallel to the bottom line of the Jaws of Death top, a line going back to January 2011 & running thru the March 2011 bottom. It will likely bounce, then gravity will take over again and pull it down toward the 2010 low at 9,614. That, of course, will only BEGIN the plunge, but stocks will briefly rally from a low somewhere near there.

The Dow Industrials & Dow Transports have now both made new lows for the year. That's a Dow Theory signal that the trend has turned down, and offers as much comfort to stocks as a bed of needles and a can of pepper spray offers a naked man with hives.

STOCKS -- the cosmic scheme to defenestrate your retirement.

The US DOLLAR index is trading now at 79.597, up 16.6 basis points or 0.21%. It long ago left behind a 38.2% correction of its May 2010 to May 2011 fall. That milestone was left behind at 78.64. Next big mark is the 50% correction point at 80.58, then the 61.8% at 82.52. Did y'all notice that ALL those likely targets are ABOVE today's price, far above?

Deflation scare is coming. Y'all brace yourselves, the hogwash will flow in tidal waves.

Euro today rose 0.68% to close at 1.3252. Remains to be shown that yesterday really constituted a bottom. Yen continues to temporize sideways, neither moving up nor down. Closed today down -0.31% at 130.17c/Y100 (Y76.82/$1).

What strange thing happened in silver & gold? Both fell off sharply from yesterday $1,655 close to $1,600 - $1,610. After the Comex close of $1,614.70, down $41.30, gold trailed off then about 3:00 plunged to $1,595. Plunged, then immediately shot right back up over US$1,626. Blinked your eyes and you missed it.

Silver acted the same way, plunging to a sudden 3:00 low at 2865c, then rising to 3020c. However, it has since backed off to 3006c.

Think about this: silver traded on a 264c spread between high and low today, 9.2%. Rough to trade that. Gold posted a 5.1% high-low range.

Today's aftermarket action has the flavor of a key reversal, breaking into new low territory & climbing higher. Silver broke below its 2950c range, but then at once scrambled back into it. That makes that 2950 look stronger, but pushes the support down to 2865c. For gold and silver, today might be nothing more than the first move down of a new downleg.

Be patient, keep watching for your opportunity to buy more silver and gold. Keep watching for your chance to swap gold for silver at 57.5:1 or better (Comex closed 54.194 today). Stay away from stocks AND armadillos, because they carry leprosy -- the armadillos, that is. Don't spit on the sidewalk, wear your seatbelt, wash your hands every 3 minutes, & follow all the rest of the government rules that are BOUND to bring you satisfied happiness.

On 4 October 1535 the first complete English translation of the Bible was printed in Zurich, Switzerland, since it was illegal in England.

Whether you are a believer or unbeliever, you still must face it: the English Bible translation gave the language its permanent shape, but more, it shaped the unfolding of Anglo-American political thought for the next 300 years, and ultimately led the way not only into the Reformation but also found its full political expression in the American Revolution, deists tho so many of the Founders were. Just look at American federalism, the mirror of the Hebrew federal republic with its 12 tribes. And more still, for English and all Western literature, the Bible is the Great Code that unlocks their meaning.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Copyright Notice

© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

Warnings and Disclaimers

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 trend is up, targeting 16:1 gold/silver ratio or $195.66; stock's primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 16 ounces of silver. US$ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

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 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. For additional information, please see our Ten Commandments for Buying Gold and Silver.
• One final warning: NEVER insert a 747 Jumbo Jet up your nose.

Explanation of Terms

The US DOLLAR INDEX is the average exchange rate for the US dollar against the Euro, Yen, Pound sterling, Canadian Dollar, Swiss Franc, and Swedish Krona, weighted for each country's trade with the US. It gives a general measure of the US dollar's performance against all other currencies.

The DOW IN GOLD DOLLARS measures the Dow Jones Industrial Average in gold dollars (0.048375 troy oz. by law). The DiG$ depicts the Primary (20 year) Trend of stocks against gold. When the DiG$ is dropping, gold is gaining value against stocks in a trend that should last 15-20 years. The DiG$'s chart is identical to the Dow in ounces of gold, but gives us one unvarying measure all the way back to 1896. Because it shows the primary trend ("tide") of gold against stocks, for investors it is the single most important financial chart in the world today. Since its August 1999 high at G$925.42 (44.8 ounces), the DiG$ has trended down, targeting a G$80-G$20 (4-1 oz. of gold will buy the whole Dow).

The DOW IN SILVER OUNCES shows how many ounces of silver are needed to buy the entire Dow. The DiSoz is trending down with a target of under 36 ounces.

The GOLD/SILVER RATIO is the gold price divided by the silver price, and shows how many ounces of silver it takes to buy one ounce of gold. The Ratio shows us the Primary (20 year) Trend of gold's value against silver. When the Ratio's trend is dropping, silver is gaining value against gold. This trend targets a gold/silver ratio of 16 ounces of silver to one of gold within the next 5-10 years. That implies that silver will massively, vastly outperform gold before this bull market ends. When both metals are rallying, the ratio often (but not always) drops, confirming the rally.

Other Important Information

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