Today's trading was probably dominated as much by traders' holiday absence from the market as it was by anything else.

US DOLLAR INDEX took a big fall today, but you need not search the headlines for the cause. Might find the catalyst there, but not the cause, for the cause is "the fullness of time." That is, dollar is correcting its long climb from 73.45 to 79.84, & this fall merely belongs to that correction. Dollar might yet fall to 77.25, about where the top trading channel lies, & give it one final Kiss Good-Bye. Do not, however, fall into the error of concluding that the dollar's rally has ended. You will pay dearly for that error.

Yen went nowhere today, closed 130.37/Y100 (Y76.70/$1) or down a microscopic 0.02%. Flat. Euro was the big gainer, adding 2.01% to 1.3647. This left a gap up o'erleaping the 20 day moving average (1.3550), which points to higher prices. Still, till it crosses 138.25, bottom line of the trading channel, nothing meaningful has occurred.

STOCKS rose a frenzied 330.60 or 2.97% today for a Dow close at 11,433.18 (S&P added 3.41% or 39.43 to 1,194.89). This did take the Dow thru 11,200 resistance, but for what? Like one of those old grade B movies from the 1930s where the British expedition reaches the oasis as all are about to perish from thirst. So what? You're still stuck in the middle of the desert. Much good that does. Today's massive move merely brings the Dow to the bottom line of the Jaws of Death from whence it broke down at 11,600 in August. Stocks better start looking for that next oasis.

When are people going to wake up and face it: stocks have been in a primary down trend (bear market) since 2000? 2007's higher high merely put a double top on that bear market, so stocks will languish to 2015 or longer.

Stocks -- how Wall Street makes, & Main Street loses, its money.

In perfect hindsight I erred Friday by concluding that gold had made its third -- and fatal final failing -- attack on $1,675. Probably did that today, but then again if gold passes above that it might rally to $1,700 - $1,725 & make you think it was eating chili peppers and chewing garlic & on its way to the moon -- just before it fails again. Listen, if gold gets through $1,750, y'all can point in my direction and laugh about how wrong I was, because that would prove it had begun rallying again. Till then, don't laugh too loud.

Bottom of gold's range lies at about $1,595. Break below there brings a re-visitation to $1,535 or lower.

Comex gold closed 1,669.6, up $35.10.

Today silver successfully broke through 3100c and closed Comex at 3194.4c, up 98.6c. Still, this leaves silver below still more formidable resistance at 3250c. Looking at the flag on silver's chart, today made no progress at all toward gainsaying that harbinger of lower prices.

Both silver & gold could rally for a week or more to work off the present oversold condition & prepare for another leg down. Exercise caution.

In the time after Germany invaded Poland in 1939 with its "Blitzkrieg" (Lightning war) and the beginning of the German offensive into the the Low Countries in spring 1940 the inactive lull war called "Sitzkrieg" (Sitting war). Folks began to wonder, before the lightning struck again, whether there would even be a war. Y'all know what they found out.

Likewise today Greece has for all intents & purposes defaulted, with all that implies for the financial system & the euro flying apart. Yet nothing has happened, no follow-through. Don't be fooled by Sitzkrieg. The lightning will yet strike, dollar will rally, stocks, gold, & silver will fall, & central banks (like England's last week) will begin even more tsunamis of quantitative easing and whatever ever other monetary emetic they can imagine to pump up money supplies around the world. And it will have as much effect as throwing a feather into a jet engine.

On 10 October 1911 China's Manchu dynasty, the Heavenly Kingdom, was overthrown by revolutionaries under Sun Yat-sen. That opened the door to a century of bloodletting that killed 60 - 100 million Chinese. Before you make a big change, you'd better be sure you want it. Looking at the overall result, you have to wonder if getting rid of men wearing queues & women binding their feet was worth the trouble. I admit, I'm biased. I'm not in favor of killing even one person, let alone 100 million, no matter what kind of haircuts they wear.

On 10 October 732 Charles Martel of the Frankish Kingdom defeated Saracen troops advancing into France at their farthest gain. If he hadn't, the French today would be speaking Arabic and not eating many pork chops.

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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