Ponder, dear Readers, the Dow in Gold Dollars, the Dow measured in gold, whether in gold dollars (G$1.00= 0.048375 oz) or in ounces (G$20.6718 =1 troy oz). Had y'all been watching this for 16 years as I have, y'all would have noticed that in all of this year the DiG$ has remained above its 200 DMA, which signifieth a correction in an ongoing bear market (as in falling from about G$925 [44.65 oz] in August 1999 to G$159.56 [7.719 oz] today.) Anyhow, the DiG$ has churned and churned, made marginal new highs, but just fecklessly failed to make good any escape. Today it sits on the uptrend line, ready to fall through space for G$42 (about 2 oz) or so. Yesterday it fell through is 20 DMA & perched today roughly on its 50 DMA. If it falls from there, it won't stop at the 200 DMA (now G$148.84 or 7.2 oz).

What point hath this meditation? Simply that the strongly reliable DiG$ is warning that stocks' rally is drawing to a close, as well as gold's correction., You'll know that stocks have taken the dive when the Dow closes below 12,250.

Today stocks bounced a tad only, nothing surprising after yesterday 213 point loss. Dow gained 89.69 (0.71%) to 12,805.62. S&P 500 rose 10.15 (0.75%) to 1,368.74.

Possible stocks may make one last move up, but not if they fall through 12,250 on this move. There will be weeping & wailing & gnashing of stock investors' teeth.

The US DOLLAR INDEX is trading at 79.757, down 14.7 basis points (0.2%). It refuses to fall off the cliff or climb up it. Unless the dollar can scrabble over 80, its future is grim. One might speculate the dollar is being rather closely managed.

Nothing attracts the eye with gladness on the euro's chart. It remains in an established down trend and is struggling to stay away from 1.3000. Closed today at $1.3110, up 0.22%.

Yen may be ready to rest for a while, having near about struck its 50 DMA (124.02) yesterday & having left two gaps behind. Today it closed down 0.3% at 123.6c (Y80.91). 124 level also offers lateral resistance, but the yen means to rise.

Gold's chart today has a "tapped & topped" look to it, although whether that presages only a small, short correction or something worse isn't clear. Limits are these: gold must pierce resistance at $1,662, or fall back. If it drops lower than $1,630, we are in for another tumble. If it clears $1,662, another rise.

On Comex gold closed down 50 cents at $1,659.00

Silver lost 15.9c to end the day at 3151.1c. Silver is narrowing into a triangle from which the escape will be very high or very low. Above 3180c blocks it; below, 3100c keeps it from ignominy.

These sideways moves you simply must patiently wait out.

To a ewLLY long list of stupid wars, on 11 April 1898 US President William McKinley added a request to the congress for a declaration of war against Spain. Well, I reckon when you want to build an empire, you can't be choosey about picking your foes. Any enemy with some colonies you can steal will do.

On 11 April 1979 the dictator Idi Amin was deposed as Uganda's president when rebels and exiles backed by Tanzanian forces seized control. About the best thing you can say about Amin is that he was a cannibal who kept the spare parts of his enemies in a refrigerator for a midnight snack. He devastated Uganda, killing an estimated 500,000 people.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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© 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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