Dollar index made a rounding bottom (or upside-down head & shoulders) over the last three trading days. Unless it drops below 80, that pattern will hold & send the dollar higher, to 81.1 at least. Close below 80 negates that outlook.

Euro gapped down today, utterly gainsaying yesterday's pin prick across the downtrend line. Closed down 0.87% at 1.2940. Looking for 1.2000.

Yen sidestepped today, flat, but holding on to the break above the trend line. Ended at 130.37c/Y100 (Y76.70/$1). Itching to move higher.

Tired out by yesterday's gains, stocks took a rest today. Dow rose 0.17% (21.04 points) to 12,418.42. S&P500 rose 0.2% (0.24%) to 1,277.30.

I don't get it. Economy's future remains burdened by massive bad debts and malinvestment from the last boom cycle -- shucks, from the booms since 1913. Apparently at midnight a.m., 1 January 2012, some Great Wheel turned that will fix everything. At least, that's how the stock market is acting, but I reckon somebody forgot to tell me about the Great Wheel's turning.

Add to that what seems to be the Federal Reserve's resolve to keep on inflating, which is the only cure they know and the one cure that won't help. Oh, & the Bernancubus & Co. have announced that they're going to be more transparent and announce what course they expect interest rates to follow, which gives them a chance at making even more mistakes in uncharted waters. Whoops -- they made that decision to be more open at last month's meeting, but kept it a secret until today. The Three Stooges weren't this ridiculous. Curly, Larry, & Moe are in charge of national monetary policy!

Today gold moved ahead on its way to a meeting with $1,625 resistance. Rose $12.20 to $1,611.90 on Comex. Silver, perversely, fell 47c to 2906.3c.

Now that gold has climbed above $1,600, it must hold on there or crash badly. It has pointed its hood ornament at $1,675/$1,680, lateral resistance & the 150 day moving average (now 1,672.42).

Whether gold has already bottomed or must be sent back to suffer more indignities makes little difference. It will have turned back up before this first quarter is over. Silver & gold will end 2012 much higher.

Overhead silver is knocking at 2970c. Chart has congested, digesting yesterday's rise. Tomorrow Silver will break one way or the other, most like upward. Low today came at 2894, so silver must defend that 2900c area.

Gold/Silver ratio may have fooled me. May not reach 57.5:1, but over the years I have learned to wait for my target, so I will wait.

Most important aspect of investing seems the one principle almost nobody knows, including investment "professionals" and financial planners. It's simple: ALWAYS ALIGN YOUR INVESTMENTS WITH THE PRIMARY TREND. That's the trend that runs for 15-20 years, up or down. If it's up, you buy it and hold it. If it's down, you sell it & stay out or short it.

NEVER buy a bull market position & trade in & out, trying to catch the highs & lows. You ain't that good. Hardly anybody is, & you'll only lose your position & your money trying.

Bear market (primary down trend) began in stocks & the US dollar in 2000, & it's still running. Bull market in silver & gold began in 2001, & it's still running.

Best investment strategy is to climb aboard the primary trend and ride it till it ends. Not fancy, no long fake-eyelashes, not flashy, it just makes money.

Whenever a sharp bull market correction makes you question yourself, remember: bull market quandaries eventually resolve to the upside. Go look at the silver chart, 2008 - now, if you need an example.

But of course, I don't wear them fancy, pointy shoes like them financial planner & experts, & I don't have any fancy degrees either. I'm just a natural born fool from Tennessee --- who was advising people to get out of stocks back in 2001. But what do I know?

On 4 January 1965 President Lyndon "Landslide" Johnson outlined the goals of his "Great Society." Whoops! Not yet reached, 47 years later. Hey, he lost the War on Poverty to poverty, too.

On 4 January 1896, following the Mormon abandonment of polygamy, Utah was admitted as a state. It's hard for us to understand public antipathy to polygamy then, because nowadays it is so widely practiced, without even the formality of marriage.

On 4 January 1884 the socialist Fabian Society was founded in London. Their coat of arms is a wolf in sheep's clothing. Think that little tidbit of history means nothing to you? Think again. You live in a socialist country & a socialist world. The Fabians won. Our job is to undo all their work.

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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