Within the markets are planted automatic circuit breakers, set to explode Humility Bombs whenever you begin to believe that you have things figured out. I stepped on those mines today. What a week! Silver gained -- look! --- 7.3%, while gold moved up only 2%. Dow gained more than gold, 2.4%, platinum augmented 3% (a word for you engineers out there), and palladium added 5.8%. Dollar index dropped 1.7%, & probably broke its rally's back. I love kids, but mine were always easy to catch whenever they were doing something wrong. If I got one alone and asked him what he had been doing, he said one thing. When another said something else, I knew I wasn't getting the story whole. It's the same way with markets. When markets that SHOULD confirm don't, some monkey business is afoot behind the scenes. So today I ask myself, how could the Dow rise 96.5 points (0.76%) while the broader S&P500 rose only 0.88 (0.07%)? And when the Dow rose 3/4%, why did the Nasdaq and Nasdaq-100 DROP? Somebody's story doesn't match here, and when that happens with markets, the larceny of Nice Government Men pops instantly to mind. I don't want to become one of those imagination-challenged boors who blames everything on government intervention, but that doesn't mean they don't intervene. And we KNOW they have a special group, the President's Working Group on Markets, set up in the Reagan reign to manipulate the stock market. I suspect they treat the Dow, the most widely watched stock index, as a kind of Potemkin village for the economy, a number they try to keep perky so we mushrooms will feel good & not panic. Anyhow, the Dow (if not the S&P500 or Nasdaq), has penetrated overhead resistance. If the move is real, then stocks ought to advance smartly, not dragging feet. We'll see. None of this, lest you conclude otherwise, changes my long term view of stocks, which are locked in a bear market (primary downtrend). If it's a rally, this, too, shall pass, & more diving shall follow. Dow today ended at 12,720.48, up 96.50 or 0.76%. S&P 500 closed 1,315.38, up 0.88 (0.07%). I bet y'all wonder why I waste good electrons talking about the scrofulous US dollar index and scabby euro and scurvy yen. Easy: they are the chief competitors to silver & gold. Their course offers guidance where the metals are headed, & chronicles the metals' ongoing war of annihilation against all the phony fiat currencies in the world. Dollar ended the day down only 6.1 basis points (0.08%) at 80.155, thus capping a week of disaster. Dollar index smashed through its uptrend line today. That does not guarantee twill proceed lower, as it did the same for several days early this month and again in December, but whenever a market breaks a trend line or resistance, the presumption states it will continue in that direction. Anyway, think about the backdrop. The world's states are engaged in a very polite war of competitive devaluation, trying to build their own economies at their neighbor's expense. Everyone smiles & bows & says they're working together, but back in the office they are figuring out how to lower their currency's value. Truth is, neither the Bernancubus nor the White House Toad want an appreciating dollar. Worse, they've had a fight on their hands as scared money poured out of the euro all summer, headed for refuge in US treasuries & driving up the dollar. For what technical analysis is worth under these manipulated circumstances, today the dollar index fell through both its uptrend line AND the 20 day moving average (80.51). That targets a fall at least to the 50 DMA (79.39), although some support lingers around 79.70 - 79.85. Euro today closed lower as traders took profits out of their week, 1.2931, down 0.23%. Yen changed nothing, up 0.11% at 129.83c/Y100 (Y77.03/US$1). Gold & silver utterly blasted my expectations today, & crushed underfoot any suspicion of a key reversal from yesterday. Yet here, too, lurk two different stories, subtle, but not quite agreeing. Let's take silver first. It vaulted 116.5c (3.8%) today to close Comex at 3164.7c. It brushed that 3060c resistance aside like the Terminator flinging cops right and left, and climbed straight up. Never sank lower than 3029c today, and at its apogee reached 3191c. Notice, too, that it closed near the top of that range. Internally more was going on than just that. Silver jumped over the hurdle of its 50 DMA (3103c) and o'erleapt and internal resistance line. Let's just say silver's shirt is full of starch. Gives me a headache to think about it, looking at the weekly chart: have I missed the low in silver? Wait, wait, there's also such a thing as a false breakout, & toward the end of metals' rallies silver always tends to outrun gold. Either way, Silver's next stubborn resistance hangs in the sky overhead at 3400c. It could make that leap next week. However, if Monday comes a cropper and silver loses 200c or so, you'll know it was a false breakout. Otherwise, buy it at the market. But listen as gold speaks out of both sides of its mouth. It closed today up $9.60, higher than yesterday, at $1,663.7, new high close for the move, but did not today post a new intraday high. High reached only $1,666. Why didn't gold punch through $1,670 when silver was so manic? I don't know. Maybe it means nothing, maybe it only means that resistance there is very strong and gold will play catch-up next week, maybe the NGM take offense & react when gold reaches $1,670. But look here: if gold pierces that $1,680 next week, and then works through $1,705, stop waiting and buy. The bottom has passed, a new rally has started. Dear friends, listen and ponder: the gold and silver bull market is yet young. The public has not yet climbed aboard, & only a few investment professionals. What we have seen so far is pasty, bland cottage cheese compared to what is coming. Don't be caught standing around trying to make your mind up, only to watch silver & gold run away. Also, I have learned that altogether y'all know almost everything in the world, so I have a question. Anybody know where I can find a slightly used 10 - 20 kilowatt PROPANE generator, a good brand like Kohler? Drop me an email if you do, please. Again I must confess, I just don't get it. I heard a lady from South Carolina on National Proletarian Radio (voice of Socialism Worldwide). They are voting in the meaningless Republican primary for president this weekend, you know, the one with the Invisible Candidate (R*n P**l). This lady lives in a county with 12% unemployed, and she said they needed to elect somebody who could help them. I gasped for air. Doesn't she understand that the government is the REASON we suffer economic turmoil & instability? Rotten money? With all due respect, when did anybody from any government ever help anybody? Of the three greatest lies in the world, the first on the list is, "Hi! I'm from the government, & I'm here to help you." All government money comes with a sock in the jaw. All government help comes with ropes, chains, and shackles. I don't get it. Why can I see this, and somebody from South Carolina (of all places!) not see it? When are folks going to wake up grasp that the government cavalry is NOT coming, and you don't want 'em to? If anybody is going to help us, it will have to be US, & we have to start by re-building our own local economies, working to restore our neighbor's prosperity as well as our own, building on a sound foundation of clean local food grown by local people. That's just for starters. I just don't get it. We're standing on acres of diamonds, & people still want to call in the government to screw everything up even more than they already have. On 20 January 1803 John Marshall was appointed US supreme court chief justice. That was a bad day for constitutional government. On 20 January 1803 British & US commissioners singed a preliminary document which led to the Treaty of Paris, ending the Revolutionary war in independence for the American states. Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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