Well, the Great Ones of The Frittering Open Market Committee met, & their announcement leads one to suspect they were scared of doing anything to disrupt markets. We're going to keep on doing what we have been doing, they said.

How did the markets take that? Me, I want to know not what people say, but what the canny ones do with their money. No cannier exist than bond investors, & the yield on 10 year and 30 year bonds rose a little. That represents a discount on the bonds for more expected inflation, which would explain why stocks also rose, because markets insanely (or should I say "Keynesianly") think more inflation will help the economy, and idea on a par with the notion that putting a knife under a laboring woman's bed will cut the pain.

The mighty US Dollar Index fell a little, 16.8 basis points (0.22%) to 79.034. In any other market this would be fatal, but you have to allow a lot of "slop" for currencies, manipulated as they are. Today's lower close marks a new low for the dollar for this move, and brings it much closer to The Line That Must Not Be Crossed, namely, 79 (bottom of the long even-sided triangle). Dollar could stumble badly here.

After a drop lower today, the Yen recovered to close higher by a gnat's eyebrow -- 122.98c against yesterday's 122.96c. Remains above the 50 DMA & 20 DMA, so momentum is positive but until it can climb above the 200 DMA (127.74) yen remains in a downtrend. Euro rose to US$1.3225, up 0.23% but still scruffing along without any resolution. Meanwhile, not only Spain but not Holland also appears ready to unravel. Doesn't really make the euro attractive.

Stocks rose today, proving that P.T. Barnum was right about the frequency of certain births. Dow rose 89.16 (0.69%) to 13,090.72 & S&P500 did better rising 18.72 (1.36%) to 1,390.69.

Dow is trapped below 13,100 resistance, & above that more resistance at 13,300. This unrolleth against a backdrop of a head & shoulders top finishing out a right and last shoulder. Buying a market that looks like that is like drawing to an A-K-J-10 inside straight flush in 5 card draw.

Today flushed some interesting birds out of the gold market. First, gold made a low ($1,623.40) equal to Monday's low. Market was flat above $1,635, then suddenly woke up at 12:30 (on the dot) to fall to $1,623. About 1:00 p.m., it shot up higher than the shelf it had fallen off of, to $1,646.60, then closed down $1.60 on the day at $1,641.40.

Now that's not a key reversal, but it is strong action. Gold fell to its previous low and refused to break -- no more sellers waiting there to be spooked out of gold. Worse yet for the gold short universe (which encompasses pretty much every government and central bank on the globe), crowds of buyers were waiting there, enough to drive the price above $1,640.

Okay, this isn't by any means a runaway bull rally, but it does suggest a bottom & a market running out of sellers.

Here's a little more. With a double bottom, gold has now established support at $1,623, so we can say "as long as gold stays above $1,623, 'twill be out of danger of great declines." However, y'all ought also bear in mind that the falling wedge on gold's chart has a lower boundary that could stand a drop to $1,575 without violation.

Mirroring gold's performance, silver, too, dropped mid-day, but to a lower low at 2998.7 cents. Just as quickly it jumped up out of that hold, and closed Comex only 39c lower at 3035.6c.

On a longer term chart, the one with that falling wedge, this took silver only to the bottom of that falling wedge, whence it bounced back. This is splendid behavior, but silver must keep it up by not falling through 3000c. Today, with its bad/good/indifferent news announcement from the FOMC that didn't break silver, constitutes positive news. Now silver needs a higher close above 3100c to prove that.

Zut alors! I didn't mean red police yesterday (rouge police) but ROGUE police. However, upon more mature thought, maybe RED police was appropriate.

Today's outrages are two, one from Maryland & one from DC. Check out http://citypaper.com/news/cashed-out-1.1301518 for a story about a dairy farmer whose bank account the ever-vigilant Feds stripped for alleged "money laundering/structuring." This offers more proof of the government's war on cash & privacy.

More lunacy comes from DC where the Department of Labor is threatening to ban child labor on family farms. http://dailycaller.com/2012/04/25/rural-kids-parents-angry-about-labor-dept-rule-banning-farm-chores/ In a nation of fat, lazy, work-ignorant, video-game- addicted children, this is wrong on too many levels to enumerate. Let me sum it up with the eloquent description, "More government stupidity."

On 25 April 1792 the Revolution gave its great gift to humanity: the guillotine. Then the Revolution discovered that its guillotine wasn't being used enough, and was thirsty. Thus was launched The Reign of Terror, which replaced the reign of Louis XIV.

On 25 April 1915 Australian & New Zealand troops (ANZAC, Australia & New Zealand Army Corps) landed at Gallipoli in Turkey for one of the stupidest campaigns in war unmatched for stupid campaigns. The bravery of the ANZAC troops was squandered with their lives there in Turkey. The stupid plan was the brainchild of First Admiralty Lord Winston Churchill, apparently in one of his less sober moments. ANZAC Day is still observed in Australia & New Zealand to honor those soldiers' courage.

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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