When I crawl out on a limb, I like to crawl all the way to the end, then saw it off behind me. But more of that later.

Currencies were flat today, dollar up 11 basis points (0.14%) to 79.159, comatose. Euro went from 1.3318 yesterday to 1.3317. Only the yen gained a little, 0.41% to 120.72c (Y82.84), assuring us that it has turned.

So what news sent stocks down along with silver & gold? None I found, and besides news events tend to happen concurrently with changes markets are already making, not as causes. So what WITHIN those markets sent them down?

The Dow lost 71.52 (0.5%) to close at 13,126.21. S&P500 lost 6.98 (.5%) to close 1,405.54. On the five day chart you see a gigantic leap up on Monday, through 13,100 to 13,250, then erosion Tuesday & Wednesday. Chart looks like a market that has rolled over preparatory to jumping off the bed. Dow must hold 13,075 or risk tanking when it breaks through support.

Okay, Moneychanger, so why doesn't the gold market look the same way? Five day chart isn't all that different.

Ahh, but the CONTEXT is. Stocks have been advancing since October dawned, trading into a tightening upward wedge, which pictures a market running out of buyers.

Gold, on the other hand, has been correcting since September died, then in February broke upward through the through the downtrend line, peaked, then traded back to that downtrend line for a Final Kiss Good-bye: a market running out of sellers.

If you sense that I repent me not of what I yesterday said, that it was time to buy gold & silver, you sense correctly. Gold was knocking on the $1,685 ceiling, tough resistance, & fell back to take a running start at breaking down that door. It would take a close below $1,630 to embarrass me. Oh, and I might be embarrassed, but I'll hold the cards in my hand, thanks very much, until that happens.

Gold lost $27 today to close Comex $1,657.90, with a low posted at $1,656.70.

Silver lost 78.5c (2.4%) & ended at 3181.6c. No damage to the chart yet, and won't be unless silver closes below 3140c. If I was bullish on silver yesterday 78.5 cents higher, what do you think I am today, tail-tucked & head-hanging? Nope, more bullish still because I can buy it 78.5 cents lower. I believe the metals correction ended on 29 December 2011.

Y'all never forget this: the risk you sit is greater than the risk you run. Sitting makes sure of only one thing: you go nowhere. It SURE doesn't guarantee you don't make any mistakes.

On 28 March 1898 the U.S. Supremes ruled that a child born in the United States to Chinese immigrants was a US citizen, establishing by judicial fiat what's called "jus soli" or right of soil. That means that your citizenship is determined by where you are born, regardless of your parents. The other kind is "jus sanguinis" or right of blood. If one or more of your parents is a citizen of the country, regardless where you are born, you are a citizen, too. In most of Europe today, "jus sanguinis" is more common.

On 28 March 1834 the US senate censured President Andrew Jackson for removing federal deposits from the 2nd Bank of The United States. Now Jackson was no angel, but generally overlooked is that the Bank of the United States, which wanted to be a central bank, had on permanent retainer senators such as Daniel Webster & that central-bank favoring Whig, Henry Clay. I reckon some people's view of what's right for the country depends on who's contributing to their pocketbook. Can you imagine what would happen today if a US president acted to curb the Federal Reserve. Y'all would find out in a New York minute who in Senate, House, & media benefitted from the Fed's generosity.

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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