Well, if you don't like the markets, stick around. They're bound to change, and sometimes, like today, with a bang. Trouble is, sometimes we're hard of hearing. Dow today pierced 12,300, rising 179.82 (1.47%) to 12,397.38. I reckon if you twist a rope, you hang by that rope, so I will hang. That close suggests that stocks will reach 12,600 before they stop. Sorry, I don't reckon they can reach higher than that, unless the Bernancubus & Obamaramus can walk on water. S&P 500 rose 1.55% (19.46 points) to 1,277.06. Not even the White House Dimwit-in-Chief trying to pick a war with Iran could keep those stocks down today, but something gave the US dollar index heartburn. It fell 43.4 basis points (0.56%) to 79.62, and is right on its uptrend line. If 76.50 fails to hold, dollar will land at 78. Scabby euro rose 0.7% to 1.3052, rising up to the downtrend line. 20 DMA stands above at 1.3121. Japanese yen made good it's breakout from last week, closing above overhead resistance (the lower boundary of the trading channel established in August, September, & October). Rise could take the yen to 132, if the Japanese Nice Government Men don't draw out their Samurai swords of manipulation first. Closed 130.47c/Y100 (Y76.65/$1). Let's start by saying that gold rose $33.90 (2.2%) to $1,599.70 and silver rose 165.8c (5.9%) to 2953.3c. Somebody made a big deal to me about silver's rise, so I went back over the last year to see how often that sort of thing had happened & what was its outcome. In the last year, silver has risen 5% or more on seven occasions. In six of those seven cases, three days later silver was flat or lower, as much as 6.7%. In only one case (July 2011) was silver higher three days later. But of course, that only works until it doesn't work any more. More to the point -- given the strength & enthusiasm of today's rise -- is silver's recent behavior at new lows. It sells off hard, runs all the scaredy-cats out of the market, and then does a complete about face. The last four rallies, as SB pointed out to me, began after silver failed to follow through on a new low. Thus I am content to ride higher with silver a while, although I am by no means persuaded that silver's travails are over. That is, even though it may have made a bottom that holds, more scares will follow. Also, that gold/silver ratio chart does not look to me as if it has completed its upward move. On the other side, my Secret J.B. Proprietary Indicator flashed positive on 29 December. Sometimes it takes the JBI a while to pan out, but it usually proves right. Gold met stout resistance at $1,605 (high today hit $1,607) & closed pennies under $1,600. Look for it to challenge $1,625 tomorrow. The Great Barrier of Believability, however, awaits at $1,671 and the 150 DMA. It should at least reach that level. Silver may temporize tomorrow as it wrestles with its 20 DMA at 2993c & the psychological barrier of 300c. Likely targets are the 50 DMA (3196c) and the 300 DMA (3409c). What I am most closely watching is how silver will act at 3050c when it hits that big downtrend line from the September highs. It must leap that big hurdle first, or nothing else will happen. If stocks faint, silver will diverge downward from gold. From somewhere a huge burst of enthusiasm has entered the silver & gold markets. It will run hog-wild a while, then we'll see what gains can be held. More I thought about my statement on Friday last about the good folks abundantly left in this country, more I realized I had left something out about the rule of law. Many laws make bad government. When the law is written on a people's heart, it need not be written in books. If the law is not written on their hearts, no multitude of laws & lawyers will maintain the rule of law. Written laws don't make people better, they make them behave. The law is written on our people's hearts -- I see that every day in the way they do business. But if you go to court to seek justice & the rule of law, well, like Dante warned those descending into hell, "Abandon hope, all ye who enter here!" Y'all are going to call me a meanie, but I have to point out this example of an American sickness, how an organization turns into an organism and then into a perpetual industry. It's the American Way. The March of Dimes was established on 3 January 1938 by US President Franklin Roosevelt to fight poliomyelitis. If y'all are younger than 50, you cannot fathom the terror epidemics of polio caused during the 1940s and 1950s. So all us little kiddies would carry our little March of Dimes cards around and beg for dimes to fill them up and turn in so that a cure might be found. It worked. Dr. Jonas Salk (supported by those funds) found a vaccine in 1955. But did the March of Dimes put up a "We Did It" banner and go home? Nope. By that time the organization had transmogrified into an organism, and organisms will survive and create an industry for themselves. So March of Dimes picked a never-ending goal -- conquering ALL birth defects -- and has soldiered on ever since. The organism has found the key to perpetual life. Oh, I'm not saying it is bad to work to conquer birth defects, only that it's as unlikely to produce any more than those people who send you letters asking for large donations "to do many good things." Once you do good, you ought to QUIT. Otherwise you run the risk of becoming merely a do-gooder rather than really doing good.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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