Unlike some folks, I don't mind saying "I told y'all so" especially when it concerns rotten parasites in banking & government. CNBC on 6 March reported "Huge Spike in Repeat Foreclosures." "Thousands of foreclosures that were stuck in process due to delays over the so-called 'Robo-signing' paperwork scandal are working their way through a revamped banking system & heading toward final bank repossession."

When the state attorneys general announced their big compact with the big banks about robo-signing, which the banks signed so they could re-create mortgage documents they lacked for foreclosure, I told y'all that it was a deal of, by, & for the banks. They gave up a piddling $2,000 a head to those they had wronged, and in return got government- encouraged rewriting of mortgages to perfect their bad title. Thus were the mortgagees lured to their doom. Foreclosure surged 28% in January. Only one question remains, Were the attorneys general snookered, or corrupted?

Odd, odd, 5 day gold and Dow charts share a resemblance, so I reckon I am going to have to tell y'all to listen to what I mean, not what I say.

Yesterday I made much of stocks' & gold's & silver's failure to rise above their breakdown points as proof they were in trouble, but today they rose into those areas. Does that disprove my argument? Not in my view. Markets can ease up into that area where they broke down, & still follow thru downside. They can even keep on rising above the breakdown, and leave behind a deadly double top, an even surer sign that they will drop more.

Okay, so interpreting a chart is an art. When I paint y'all a picture, I don't always have time to tell you how to wash out the brush.

Start with stocks. On a five day chart they today rose thru the 12,850 area I mentioned yesterday. Dow added 70.61 points to close 12,907.94 (0.55%). That's still below the breakdown at 12,950 (exactly), and might become only a double top by reaching for 13,000.

Why would I look for a double top? Context. Background. This break & recovery is played out against an aging (since 1 October 2011) rally, that (2) built into a large, VERY bearish rising wedge. It asketh a whole lot to expect a market that long growing overbought to extend a rally. Add (3), the Dow today closed below its 20 day moving average (12,915.74).

Any way you cut it, it's over for the Dow for a while. S&P500 tagged along, rising 0.98% (13.28) to 1,365.91. Y'all watch: truth is the daughter of time.

The US DOLLAR INDEX lengthened its correction by dropping a meaty 48.5 basis points (0.62%) to 79.227. Dropping below 79.30 was sloppy, and a low at 79.163 looks positively slovenly. But what is the dollar trying to protect? Really just that 79.00 psychological support & the 20 DMA (79.06). It will probably hold & the dollar will resume advancing.

What goosed stocks today & the euro with them? The deadline for the elusive Greek Debt Deal passed with a "majority" of investors signing on. Thus the world waxes again optimistic, until the Deal comes unglued again, as 'twill, & soon. Euro gained 0.92% (big for a currency) to 1.3270. Here's another reason why I wouldn't trade currencies even with your money, because this reaction is wholly irrational. BWDIK? Not a single currency in the world is worth backed by as much as a bus token.

The wave of schizo-optimism pushed traders out of the yen today. It dropped 0.58% to 122.62c/Y100 (Y81.55/US$1). Looks looney. Two gappy reversals in three days. Help.

Gold pushed nearly to the crucial resistance at $1,705 with a $1,703.80 high today. Closed below the $1,700 at $1,698.10 on Comex, up $14.80.

Even if gold climbs to $1,715 it won't convince me that it has completed its correction. Nope, it would have to close ABOVE $1,715, maybe $1,725.

Silver didn't gain as much as gold today, so the gold/silver ratio rose from 50.183 to 50.256. That non-confirmation itself jaundices the eye.

Silver added 24.6c to close Comex at 3378.9c. It bounced to 3415c, but resistance at that height wrestled silver back down to that 3378.9. Above 3400c more resistance awaits, stoutly armed, at 3450c.

What if I am wrong? Well, in that alternate universe silver has only corrected back down to & slightly violated that down trend line it broke thru in mid-March, and day before yesterday's low just above the 50 DMA played out the oft-seen touchback ("Final Kiss Good-bye") that proves the breakout. Possible, but I can't get into that universe from here. The chart & my suspicion are jamming my de-materializer.

On 8 March 1965 3,500 US Marines landed at Da Nang in South Vietnam to become the first US combat troops there. In the teeth of all the US government's promises to the contrary, they were not the last, either. Once they get started, wars are hard to stop, especially for governments.

On 8 March 1782 at Gnadenhutten Ohio militiamen killed 90 Indians, retaliating for raids carried out by other Indians. Oddly enough, the names means "Huts of grace."

On 8 March 1702 Queen Anne took the throne after King William III died. Anne never bore an heir, so that's how the German Hanoverians assumed the English throne. George I was the next Protestant in line after she died.

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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