Sometimes when everything is dragging the ground, you have to ask yourself which is the least worst.

On bad news out of Europe today (surprise, surprise) the dollar jumped while stocks tanked again & silver gold, & the platinum metals were driven back. Yet for the week, gold in fact rose.

I wonder some times if the Nice Government Men "tasked" with manipulating the dollar have some Big Hancho In Charge ("Big Hick") who at the end of the week looks at the market and "adjusts" it. Why am I so durned suspicious? Well, the nasty US Dollar index traded down, down this week, made a new low for the move which in any free market would have sent it shooting lower after breaking the 20 & 50 day moving averages, but today did it sink like a watch in a churn? Nope, rose 54.9 basis points (0.71%) to 79.888. What can I say? Only note with distaste & disgust that the dollar must rise over 80 to turn up, and close below 78.50 to break down.

Japanese yen has reached the 124 level & stalled, sliding down the underside of its 50 DMA. Last three days Yen has remained virtually flat, & today closed 123.69c against yesterday's 123.66c, against Wednesday's 123.60c. One begins to wonder if the rally we have seen was no more than an upward correction in a longer down move.

News leaked out today that Spanish banks' borrowing from the European Central bank surged to new highs in March. The capitalist rats are leaving the socialist ship, pulling money out of Spanish banks & leaving them on the mercy of the ECB for funding Spanish stocks dropped 3.6% today (think a 450 point drop in the Dow) to a new 3 year low as Spanish bond yields reached for 6%. Credit Default Swaps on Spanish debt reached their highest price on record. Italian bond yields rose and all Euro stock markets shrank. All this places Spain on the candidate list for Next European Bailout, and helps explain why the euro fell 0.8% today to $1.3081. If you have euros, sell 'em.

Monday's fall & the rest of the week's weakness (owch! Sorry) leave behind a double, maybe triple, stop in the Dow. Can't yet write out of the picture a possible brief surge to 13,300 or higher (only a close below 12,250 would do that), but stocks look sick.

Today the Dow lost 136.99 (think 1.05%) to close at 12,849.59. S&P500 closed down 17.31 or 1.25% at 1,370.26.

Silver & gold dropped today. Silver lost 3.5% and gave up 113.5c, all the 100.4c it had gained yesterday & then some, closing at 3138c. Gold gave back $20.40, virtually all the $20.50 it had gained yesterday, and closed at 1,659.10.

None of this was good, but also not nearly fatal. Gold's low today at $1,649.40 matched yesterday's. Gold continues in the same situation that has lasted all week: as long as it remains above $1,630, it is trending up. Clearly a line in that battle has been drawn at $1,650, so if gold crumples there on Monday, it promises to sink all the way to 1630

This week gold has reached the 38.2% correction of its Sept -Dec. fall. More, it stands under a cluster of converging moving averages -- 50, 150, & 200 -- and strong lateral resistance at $1,682. Of course I know that this sideways movement is frustrating, but as long as it remains above $1,613 gold will keep on rising.

On a less cheery note, the 3 year weekly gold chart shows what MIGHT be a breakdown. A close below $1,613 would confirm that breakdown & then we've got a painful mess. If that mess didn't catch at $1,525 (last low), it could drop to $1,475. that would finish off a monstrous bullish falling wedge which then would explode upside.

Now I know every one of us hears the LAST thing we're told, so right now y'all run back and read the next to the last paragraph. I expect $1,613 to hold.

Thinking about the weekly chart, look at silver's weekly chart, where a different picture emerges. There silver has formed a long even-sided triangle, from which it will break out to the upside. No talking out of both sides of the mouth there. Silver whispers gold will not drop.

Silver's 5-day chart looks unnatural. Flat as a fritter between 3190 and 3100 Monday through half of Thursday, then a straight up leap to 3250, and a fall off today to 3138c. Stay with this: silver must hold 3100c. Close below that pulls silver down. No close below that, silver will move sideways or rise.

Don't miss the Dow in Gold Dollars, which dropped the week G$5.68 (0.249 ounces). It is trying to break down.

End of the silver & gold correction draweth nigh. Lower prices are offering you one last chance to buy a cheap ticket for the bull ride.

On 13 April 1598 Henry IV of France signed the Edict of Nantes which granted political rights to Huguenot Protestants. Louis XIV revoked the Edict in 1685. On 13 April 1829 the English parliament granted freedom of religion to Roman Catholics.

On 14 April 1976 the Federal Reserve introduced $2 bicentennial notes, which quickly became almost as popular as fever blisters.

Y'all enjoy your weekend!

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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