A joke on the streets of Moscow these days: "Everything the Communists told us about communism was a complete and utter lie. Unfortunately, everything the Communists told us about capitalism turned out to be true." Markets have made their intentions considerably clearer today. Dollar's rolling into the gutter again, stocks are indecisive and faltering, gold & silver are shaking off their worries & marching higher. Let's start with the US Dollar Index. Dealing with all these fiat currencies for me is like having to listen to a long lecture on tapeworms & other internal parasites. Thus I want to get it behind me as quickly as possible. What the dollar is losing, the euro is gaining as the frenzied rats, uncertain which ship will sink first, swim from one ship to the other. Here's the answer to their quandary: BOTH are sinking. Dollar index today lost 67.1 basis points, a meaty 0.86%, to grab a branch at 79.704. Falling through the trap door at 80 sends the dollar much lower, and a fall through 79.50 (probably tomorrow) will only tie anvils to the dollar's feet. Dollar's rally is over for a while. Broke clean through the uptrend line, closed below the 20 day moving average (80.53), & has only barely avoided breaking the 50 DMA (79.45). None of this promises anything other than lower prices for the dollar. It has fallen off the kerb into the gutter. Euro meanwhile has a full load on & has posted two gaps up in the last 3 trading days -- breakaway gap, headed for 132+ resistance. Not clear yet how substantial this rally is, or how long it might last. May constitute no more than a rally before one last spike down, but looks good from here. Momentum points skyward as euro has passed its 20 DMA (1.2889) & is drawing a bead on its 50 DMA (1.3163). Euro closed today up 0.77% at 1.3031. Yen did little today, up 0.08% at 129.93c/Y100 (Y76.96/US$1). Above the 20 DMA (129.62) but looking awfully tame. STOCKS today looked lost & bewildered, some indices up, some down. Confusion promises nothing good as stocks run out of enthusiasm and steam. Dow fell 11.66 (0.09%) to 12,708.82. Broader S&P500 rose 0.62 (get out the magnifying glass) or 0.05% to 1,316.00. Dow acting allergic to 12,750. Last high close came 2 May 2011 at 12,810. That is now doing the same thing to the Dow that Kryptonite does to Superman. S&P500 is also struggling at analogous downtrend line from 29 April 2011 close at 1,363.60. Don't expect either index to reach those last high levels. This will bring great pain to many, & I take no pleasure in reporting it. Stocks are in a primary down trend, & have much, much further to fall in the years before that bear market ends. Today gold climbed $14.30 to $1,678.00. Silver tagged right along and ran out front with a 58.6c rise to 3223.3c. Gold has now reached my $1,680 target area -- high today hit $1,681.25. Gold's present zeal argues that it will rally to $1,705 at least before pausing. Worth noting is that gold's crucial 150 day moving average stands at $1,681.19 today. As a footnote, gold also rose above its 50 DMA (1,669.54). Remember that during this bull market gold has only rarely traded below that 150 DMA, & never for a very long time. If it climbs over soon, it may not touch that 150 DMA for a long time to come. Silver has punched through a resistance line within its trading channel, with one clear goal in mind: reach 3400c. Look for it soon. Silver's 300 DMA, which has been as important to silver as the 150 DMA has been to gold, stands at 3428c today. About the same place stands resistance from last fall's trading. Silver has the bit in its teeth & is running away, above its 20 & 50 DMAs & raging. Keep in mind if you are pondering buying silver or gold that you are not buying for a one or even two or five dollar gain, but a TRIPLE or quadruple. Even a five dollar gain here will look very small in hindsight. Longer you wait to buy, more they will cost. On 23 January 1989 died the flamboyant Spanish surrealist painter Salvador Dali. He must have spent a lot of time waiting in government offices or in jail, as witnessed by his painting, "The Persistence of Memory." http://en.wikipedia.org/wiki/The_Persistence_of_Memory Whatever else you might say about him, he was an unparalleled craftsman and painter. Choice of subjects might leave some questions hanging in your mind, but still quite a painter. On 23 January 1897 Elva Zona Heaster Schue was found dead in Greenbrier County, West Virginia. The resulting murder trial of her husband is the only case in US history where a ghost's testimony helped secure a conviction. On 23 January 1552 the second version of the Book of Common Prayer became mandatory in England. Like it or lump it, the Authorized Version (King James) of the Bible and the BCP formed modern English, as Luther's translation formed the German language.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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