Awww, come on, now! All y'all that wrote yesterday because I typed "2012" instead of "1558" for the year Francisco Fernandes introduced smoking tobacco into Europe, y'all already knew that, right?

As I was saying yesterday, "Should the Dow break 12,880 (yesterday's low), wave bye-bye. Quickly."

Did y'all remember to wave? Stocks were in trouble from their 12,958.65 open, dropping like your daddy's borrowed pocketknife down the well. They caught briefly just above 12,800, then eroded the rest of the day to end at 12,759.15, down 203.66 points or 1.57%. Owch.

S&P fell in lock step with the Dow, down 20.97 or 1.54% to 1,343.36. I may be no more than a natural born fool from Tennessee, but even I know that when you see one of them wedgey looking thangs pointing up on the chart, the market's about to hit the skids.

I don't see any support much before 12,250. Might pause a bit at the 50 day moving average, now 12,678, but the 200 DMA looks the more likely target at 12,012. BWDIK?

The news tells us that stocks fell on apprehensions about the Greek Debt Deal (y'all remember that?) falling apart. Seems it really ISN'T a done deal after all, & some bondholders are dodging the barber shop, holding out to trade a haircut on Greek bonds to full payment from Credit Default Swaps.

Apparently the news has never looked at a stock chart.

That US dollar index was just marking time yesterday, planning to spurt 52.9 basis points today, 0.68%, to 79.829. 80 lies in its future, and higher, I suspect.

Y'all can imagine that fear about the Greek Debt Deal really helped the euro today, right? It fell a hefty 0.79% to $1.3112. The euro appears to have resumed its downward course against the dollar.

Yen, on the other hand, rose 0.84% to 123.66c/Y100 (Y80.87/US$1), & appeared to make a spike bottom - again -- and bounced up. Surely that must be the last of its decline.

Gold dropped 1.9% today, down $31.60 to $1,671.40 on Comex. It was already rolling down the slope in Europe & had reached $1,685 when the US opened & the selling began in earnest, taking gold to the day's low at $1,663.40 by 9:30. Gold then recovered the rest of the day to move sideways between $1,675 & $1,670.

Bad news doesn't stop there. Gold dropped out of a flag pattern & fell through its 50 DMA ($1,688.42) & even its 200 DMA ($1,674). The proverb holds that flags always fly at half staff. If so, gold will fall to near $1,600, and relatively fast. Let's watch it for a day or two.

In European trading silver broke below 3350c, but although it suffered through the day, dropping 91c (2.7%) to close Comex at 3274.1c, it never suffered any big fast drop like gold's. Ohh, that 3300c barrier will be tough to break through on the way back up.

Today silver caught and held at 3245.7c, but when that 3250-ish area give way, silver will give back another 50c very fast, and could fall to 3065c. Touching the 50% correction (of the December thru March rally) at 3183c is a virtual certainty. 50 DMA stands at 3224c, & that will offer weak support, but silver has further to fall.

The Gold/Silver Ratio has risen sharply since 1 March at 48.331 (remember, the ratio FALLS when metals are rallying, and RISES when metals are falling.) Today it closed at 51.049. The ratio has broken out to the upside and if we are ever to hit our 57.5:1 target, it ought to be on this move up in the ratio.

I have a favor to ask y'all. My wife Susan is having troubles with her heart again, after she had her mitral valve repaired in September 2008. I would deeply appreciate your prayers for her. She's awfully bossy, but we've been married since we were 12, so I'm used to her.

On 7 March 1836 the 3,000 man army under Mexican general Santa Anna recaptured the Alamo after a 13 day siege, killing all 189 Texans. That wasn't the end of it, though.

On 7 March 1857 in the Dred Scott decision the US Supreme Court ruled that African slaves were not United States citizens. The Chief Justice was Roger Taney (pronounced Tawn-ee) from Maryland.

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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