Sideways markets are tough to parse. When they seem just about to break out, they fall back. Often to the bottom of a long, narrowing triangle. I think that's what's taking place with stocks.

They rose today. That's why y'all are getting this lecture. Dow was up 113.9 (0.87%) to 13,204.62 & the S&P500 rose 9.29 (0.67%) to 1,399.98, one mouse burp away from 1,400. What meaneth this uproar?

Still appears to me stocks are painting a head & shoulders top, right now finishing the right & final shoulder. It would take a close above 13,300 to change my mind. This "rally" strikes me as bait for suckers.

Curioser still is the Dow in Gold Dollars (DiG$). This has formed a diamond since mid-March, which usually marks a top. For the past two weeks the DiG$ has skidded along atop its 20 DMA (now G$163.10 or 7.890 oz.) but never climbing higher than G$164.90 (7.977 oz).

Stability like that makes little sense. I mean, it won't stay there much longer. To escape the diamond upside the DiG$ must close above G$165.37 (8.000 oz) then quickly rise over G$168.12 (8.133 oz), the last high. More likely is that the DiG$ will fall out of the triangle gravity-ward when it bereaks G$160 (7.740 oz).

Lo! How are the mighty fallen! Tell it not in Gath, that the US dollar index today fell below 78 & now tradeth at 78.931. True, that's lower by only 7 basis points (a measly 0.09%), but it is painfully symbolic for the dollar. In aftermarket trading it's trying to rise, so maybe today marked the dollar's low. It better have, else it falls out of a long triangle and loses 300 basis points. Must hold 79.

The Euro went nowhere, closing today at $1.3221 against yesterday's $1.3225. Too little to count, call it unchanged. Yen gapped up -- sigh, again -- today to 123.51c, 0.37% (Y80.97/US$1). Never mind the theatrics, yen must climb above 124.54 even to raise a suspicion it is changing its downward trend.

Well, I reckon even a blind hog finds an acorn every now and then. Yesterday I said that gold's drop to a new low for a move and sharp recovery showed strength. Shut my mouth if it didn't gain $18.20 today to dazzle the Comex with a $1,659.60 close, above $1,640 & $1,650 resistance. High touched $1,660.55, low never fell below $1,645.72.

Here's the good news & the bad news. Bad is that gold is forming a rising wedge, and could still drop down to the bottom boundary thereof, right now about $1,590. Good news is that gold cracked that upper boundary today, but hold on! Won't confirm an upside breakout and rally until it closes ABOVE $1,683, resistance AND the 150 day moving average.

My darling silver leapt 85.1 cents today to clear 3100c and close Comex grinning at 3120.7c like a jackass eating sawbriars. That was close to the 3127c high, and a LONG ways from the 3064.4c low. Today's close landed silver slap on the upper boundary of the falling wedge. Bear in mind that silver must make good this escape by closing higher tomorrow, and might yet touch the other side of that falling wedge, now about 3000c.

It MAY BE that silver & gold today have opened the door to that rally we've awaited so long. Both must confirm with respectably higher closes tomorrow.

Appears that I was conned yesterday by the Daily Caller & http://dailycaller.com/2012/04/25/rural-kids-parents-angry-about-labor-dept-rule-banning-farm-chores/ Turns out the yankee government's Commissariat of Labor is not proposing to regulate children working on family farms, only other young workers. Which of course raises one self-justification and one further objection: 1. It was believable. 2. What is the yankee government doing regulating the relation between employer & employee anyway?

Still, the world is nasty enough and government tyrannical enough without exaggerating things. Nobody likes the clown who shouts "Fire!" in a crowded theater.

26 April is officially Confederate Memorial Day in Florida and Georgia.

26 April must be the day for artists to be born. In 1785 John James Audubon was born, the great ornithological artist. I remember as a child staring for hours at his Birds of North America. He died in 1851.

On 26 April 1822 in Hartford, Connecticut was born Frederick Law Olmstead, called by some the father of American landscape architecture. Central Park in New York was one of his projects. Anybody who wants to replace asphalt with grass is a friend of mine.

On 26 April 1983 -- just to give y'all an idea of where the world really is -- the Dow Jones Industrial Average first broke 1,200.

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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