The Moneychanger
Daily Commentary
Thursday, 12 January a.d. 2012 Browse the commentary archive

Tear off the top of the chart, where the label is, & ponder with me for a moment this picture.

It is a broadening top, a well-known & fatal topping formation. Draw a line from the March & June 2010 lows, and another line from the May and June/July highs. You have constructed a long, narrow equilateral triangle.

Half way thru forming that triangle, the market falls OUT of the triangle, free falls, then catches. Since then it has been building an enormous rising wedge, a bearish formation that usually breaks out downside.

Now that market has traded up off its October lows all the way to the bottom boundary of that triangle. Whoops! Did I fail to mention that it stands dead under where the triangle's upper AND lower boundaries cross? Double the pleasure, double the fun, double the resistance.

Only conclusion I can draw from this chart is . . .? That it will shortly drop like your English 101 grades after you stopped studying and started staying out all night drinking beer & carousing with your low-life buddies.

Count on it, semester grades WILL be published.

I have just described to you the chart of the Dow Jones Industrial average.

Today the Dow gained a gnat's moustache 21.57 points to close at 12,471.02, still stymied by the doubled resistance overhead. S&P 500 rose 3.02 to 1,295.50, also flea-bite stuff. A bad break is coming.

The US dollar today flew like an anvil over the Grand Canyon. Gave up all that it had gained on Wednesday and closed near Tuesday's low, down 52.3 basis points (0.67%) to 80.828. Changes no part of the long term outlook. Yen and euro rose today, yen slightly to 130.27 (0.12%) and euro more spicily to 1.2817 (+0.85%).

Yet again gold ratcheted up another level. Today's low, $1,642, again fell above yesterday's close (1,639.20). Gold closed Comex up $8.10 at $1,647.30. Overhead it probed & penetrated $1,650 resistance, reaching $1,661.50, but couldn't hold on. Makes no nevermind, as this stair-step pattern constitutes strong bullish action.

Silver sneaked through 3025c resistance & ran clean to 3064.3c before any sellers caught on. Finished the day above the next milestone, 3000c, at 3009.2c, up 23.4c. Never fell lower than 2989c.

To keep the reins on its rally, silver ought not drop lower than 3025c tomorrow, & ought to jump one more step, say, closing above 3100c. That ought not stretch silver too hard, but when it nears 3200c, watch out.

Already silver stands above its 20 day moving average -- 2905c -- and is nearing the 50 dma (3140c). Much more important, the last three days silver has closed ABOVE its downtrend line stretching back to the September high. Folks, a 3-day close above a trend line is a BREAKOUT.

Around 3200c silver will encounter great enemies, and may need to fall back & regroup, but it has energy & strength.

The Long Dry Spell has ended.

MILESTONES OF AMERICAN CULTURE: On 12 January 1943 the Office of Price Administration (OPA) flung its full weight into the war effort by announcing that the terms frankfurters/hot dogs/ wieners would be replaced by "Victory Sausages." At that news, the Axis powers trembled in their jackboots. They knew they were in trouble.

On 12 January 1773 the first public museum in America was established, in Charleston, South Carolina. Did I mention that at that time Charleston was SOUTH of the Mason-Dixon line? I meant to point that out.

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

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
12-Jan-12 Price Change % Change
Gold, $/oz 1,647.30 8.10 0.5
Silver, $/oz 30.09 0.23 0.8
Gold/Silver Ratio 54.742 -0.158 -0.3
Silver/Gold Ratio 0.0183 0.0001 0.3
Platinum 1,496.90 5.00 0.3
Palladium 634.25 -10.05 -1.6
S&P 500 1,295.50 3.02 0.2
Dow 12,471.02 21.57 0.2
Dow in GOLD $s 156.50 -0.49 -0.3
Dow in GOLD oz 7.57 -0.02 -0.3
Dow in SILVER oz 414.43 -2.53 -0.6
US Dollar Index 81.31 0.50 0.6
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,647.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,690.13 1,705.13 1,705.13
1/2 AE 0.50 831.89 864.83 1,729.67
1/4 AE 0.25 420.06 436.53 1,746.14
1/10 AE 0.10 174.61 182.85 1,828.50
Aust. 100 corona 0.98 1,596.92 1,610.92 1,643.46
British sovereign 0.24 387.77 394.77 1,677.04
French 20 franc 0.19 307.55 314.55 1,684.79
Krugerrand 1.00 1,663.77 1,678.77 1,678.77
Maple Leaf 1.00 1,659.30 1,680.30 1,680.30
1/2 Maple Leaf 0.50 815.41 856.60 1,713.19
1/4 Maple Leaf 0.25 407.71 436.53 1,746.14
1/10 Maple Leaf 0.10 163.08 177.91 1,779.08
Mexican 50 peso 1.21 1,972.08 1,988.08 1,648.90
.9999 bar 1.00 1,653.07 1,664.07 1,664.07
SPOT SILVER: 30.09      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24,273.15 27,500.00 35.95
VG+ Peace dollar 0.77 23,773.15 27,000.00 35.29
90% silver coin bags 0.72 21,229.78 21,554.78 30.15
US 40% silver 1/2s 0.30 8,287.14 8,587.14 29.11
100 oz .999 bar 100.00 3,034.20 3,074.20 30.74
10 oz .999 bar 10.00 300.92 320.92 32.09
1 oz .999 round 1.00 30.19 30.94 30.94
Am Eagle, 200 oz Min 1.00 31.84 32.34 32.34
SPOT PLATINUM: 1,496.90      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Am Eagle 1.00 1,496.90 1,596.90 1,596.90
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486
888-218-9226

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

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.