Looks like silver, gold, and stocks recovered this week, but only if you don't hear those drums throbbing in the jungle. There's bad juju ahead, Bwana, as they used to say in the Tarzan movies.

Stocks went up, down, then up, and down again. Raggedy. Weak. Dow touched 11,232 (up 110) early in the day, then dropped as low as 11,051, climbed again and failed, and closed the day down 20.21 (0.18%) at 11,103.12. S&P500 dropped 9.51 for the day, down 0.82%, to 1,155.46.

Today has a double-toppy look, and not breaking through 11,200 next week will confirm that suspicion. Stocks must hold 10,700 support or turn down again.

It is intensely painful to watch stocks & contemplate all the folks who will ride that sinking ship down as it takes their retirement under the waves. They have a conceptual block so powerful, so strong, so unassailable, that they simply must listen to the "experts" and financial planners who keep on doing the thing that doesn't work, because they know nothing else.

STOCKS -- they're a blind date with Typhoid Mary.

US Dollar index rose a little today to close 15.8 basis points or 0.20% higher. Remember that earlier in the week it touched off 79.84, probably the top of its first leg of the rally from 73.45. Dollar may fall back to 78 or even 77.75, but its immediate future is calling it higher, lots higher, to 82.5 at least, I reckon.

Having lifted itself up off a 1.3164 bottom three days ago, the euro fell back on its bed of pain today. Fell short of its 20 day moving average (1.3551). Still destined to re-visit 1.2000. Yen basically stood still today, closing at 130.39, still moving sideways, crawling along its 20 & 50 dmas.

Gold reached a high of 1,663.64 today, then fell back. I count that as another challenge of $1,675, and a third failure. Worse, gold closed Comex down $17.40 at $1,634.50. that leaves $1,630 as the nearest support. If gold crosses that line, then sinks through $1,600, it will skid a long ways.

On the other hand, if gold keeps climbing and breaks through $1,725, then gold's bottom has already been posted. However, I don't expect that. European crisis hasn't been cured yet. Crisis is like malaria. It makes you sick as a dog, then leaves. Then all unexpectedly, it returns. The cause of the crisis has not yet been treated, or perhaps the disease is so vast, no one has the resources to treat it. Either way, it will return, with teeth bared.

Wow. How could I have said yesterday that the MACD & RSI showed silver overBOUGHT when I meant overSOLD? Well, it's oversold, & when those indicators are oversold, it argues that silver ought to RALLY. (Listen to what I mean, not what I say.)

What withers my optimism? For one thing, oversold can get MORE oversold. For another, after a plunge like the one silver & gold took the week of 26 September, markets normally recover a bit, then make one more plunge down. Art lives in identifying when that has happened.

Both silver & gold are oversold, but both also show Flag or Pennant patterns on their charts, & flags always fly at half staff. That, too, implies lower prices, BICBW. However, today's performance, after yesterday's gains of 165.3c and $11.60 to the top of gold's range, felt weak, like a everybody was cashing out at week's end. Losing 101.2c today silver closed Comex at 3095.8c, once again below that critical 3100c mark. Today and yesterday silver did no more than rally up to its 300 day moving average (now 3186c), needful but not particularly inspiring. At its lowest gold pierced its 150 dma (now 1587.71), but has not moved far from that mark, merely bounding along it ($1,535 was roughly the 200 dma).

Now maybe that touch off the 200 dma was the bottom for gold. Could be, but even so I expect to see it go back for one final Kiss Good-bye before a bottom is complete.

Those oversold conditions might also be worked off not by a sustained rally, but a short-lived one.

I reckon my doubt is showing. I'm just not ready to throw caution overboard & dive into silver & gold after it. For one thing, I expect to see the gold/silver ratio reach at least 57.5, and it hasn't touched that yet.

So we wait, with patience, remembering that many times not doing anything also means you are not doing anything wrong, either. Not always, but sometimes.

I intended nothing in my remarks yesterday to disparage physicians, for whom I have great admiration. However, my point was that no training or profession guarantees integrity. All men alike are subject to fail, to lie, to cheat, and neither education nor position exempts them. Alas, we live in an age when the terms "science" & "scientific" are trotted out as religious shibboleths to awe the natives, like 19th century explorers lighting matches in deepest Africa. Look, "science" is merely one way of arriving at conclusions, and not the only way, nor does it comprehend the whole cosmos, proud as its claims may be. Theories are not facts.

However, have y'all ever noticed that when all you have is a hammer, everything looks like a nail? Hence many physicians, having only the hammers of drugs & surgery, find that the only solution to every problem. But what about nutrition? What about trying not to get sick in the first place? Not eating the stuff that makes even the healthy sick? What about alternative treatments, even though they are NIH -- not invented here? Life calls for a lot of humility, and you don't know what you don't know.

Then somebody has to explain to me why so many medical innovators, especially in the US, are persecuted so ferociously by their supposedly objective & scientific peers? Why so many "scientists" are willing to falsify tests or so many political scientists will tout whatever line the highest bidder (government) requires?

Nawwww, integrity is a fragile plant, and the soil of science is as thin as any other.

Y'all enjoy your weekend!

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

— Franklin Sanders, The Moneychanger

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© 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.

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