Got to move fast as a scalded dog today, but I'll try to cover it all. Biggest winner for the week was the S&P500, up 1.8%, but gold lagged not far behind at 1.3%. Not surprising, dollar index lost half a percent. What happened? If this was any sort of sane world where everybody & his brother didn't have his thumb on the scale and his hand in the till, that US dollar index would have dropped like a big boy hit on the head with a large-size pipe wrench. Rather, it broke down from its two-month-a-building triangle and jes' sorta stumbled 40 basis points (0.51%) to 78.748, instead of dropping straight down like a low-flying mallard hit with #2 shot. Where will this take the US dollar index? It has broken support stretching back to the late October low, so "lower" is the first answer. Second, there's an internal support line right about 78.50, beneath which lies air. Doesn't seem to be any particular reason -- that is, an announcement from the Bernancubus that he's going to debase the dollar faster -- for this slide, but maybe it's the NGM working together trying to float the euro. Speaking of the euro, how'd you like to live in Spain, where admitted (Governments always lie) unemployment is 24.4% & half the folks under 25 have no jobs? Foreclosures rising, banks sinking, deficit booming. This saith not much for the euro's future. Today it rose 0.35% to 1.3253, which carries it only to the 32.8% correction level of its November - January drop. Yes, 'tis above its nested 20, 50, & 62 day moving averages, which points it higher, but if you put a .44 magnum to my head & asked me why, I reckon you'd just have to blow my brains out cause I could give you ne'er a reason. Yen is on a tear, rose 1.04% today to 124.7c/Y100 (Y80.19/US$1). Climbing above that 124.5-ish level will send it flying, and I reckon y'all will see that. Some of y'all may have marked that I NEVER have anything good to say about stocks, and I confess, that's no accident. Wake up! The US is mired to the wheel wells in depression, & the only thing government & the Fed can do is haul more barrels of water to thin the mud. Some few companies may prosper, but the vast majority of the US economy will keep on suffering because the Resplendent Ones Who Run Our Lives will not allow the economy to purge bad investments & bankrupt firms. mostly because their cronies own them. More than that, stocks entered a primary downtrend in 2000, & will not significantly exceed that inflation-adjusted 11,722 high until the bear market ends, say 3 - 10 years hence. At present the Dow Industrials have traced out a head and shoulders that may signal on a breather, a consolidation before moving higher, or a top. If the Dow can break through 13,300 -- IF -- then it might reach for 14,905 & the government & Wall Street shills will be singing sweet halleluiahs, but 'twill be the biggest bull trap of all time, for twill collapse thereafter to ignominious lows. Teeth will gnash, wailers will wail, hair will be pulled. If the Dow breaks say 12,100 sooner, then the gnashing, wailing, and hair-pulling will start sooner. No matter, either way the gnashing, etc. will come. Wait for it, it will come. Today the Dow rose, with great labor, to 13,228.31, up 23.69 (0.18%) while the S&P500 climbed over 1,400 to 1,403.36 (up 3.38 or 0.24%). Overview of silver & gold this week says that they completed those falling wedges, made final bottoms for this move, & have begun moving higher. Now the details: Gold today rose $4.40 to $1,664.00 while silver gained 14 cents to 3134.7c. Notice that this week (a) gold never closed below $1,630 & (b) silver spent only 3 days below 3100c. Yesterday gold cracked the upper boundary of that falling wedge -- "broke out" -- and confirmed that today with a higher close. Yet once burned, twice shy, so I want to see gold clear $1,682 resistance to PROVE it has turned up, then keep marching right along & climb over that 200 DMA at $1,698.17. Looks good, but I'm holding my breath. Why? Because it still might drop back to the bottom boundary of that wedge, now about $1,600. Silver was taken behind the bar and beaten so bad you'd have thought she couldn't stand up. Think again. 5 Day chart shows a spike bottom on Wednesday, followed by a surge through 3060c resistance, and a continuing advance clean to 3140c. Today silver closed at 3134.7c, not far from the 3142c high. On the longer term chart silver yesterday halted at the upper boundary of that falling wedge. Today she cleared it. In front of silver -- and needful to confirm a rally -- stands 3250c. Appears that silver & gold made their final lows this week for the correction that began off the March high. A lot of sideways frustration will likely follow, but trending upward. Big breakouts may not come till fall, but worst has passed. After my remarks about child labor some folks wrote me about the need for laws to keep 12 year olds from working in Chinese factories. I know and doubt not that good will underlies this, but let me play curmudgeon for a moment. I don't favor exploiting children, but look at it from the other side: the child's. Some children are overjoyed to get a job, even a hard, dangerous one because it means that they and their family won't starve. In an upside down way, it gives them dignity. To what will you deliver them if from work? Not playgrounds & video games, but death. Starvation. On farms child labor makes a child a respected and productive member family member, teaching it early to lead a productive life. Among the Amish here I've seen tiny 5 year old girls herding up 6 - 8 big old Holstein cows, then climbing up the gate to open it for them. Or 12 year old boys plowing a three horse team. You call that hard, they call it practical & right. We have to be careful to distinguish sentimentality from reality, & to make sure the unintended consequences of our good will don't bring worse than the ill we intend to mend. Finally, I'll add this: other than love & duty, the greatest lesson you can teach any child is to work with joy, and sooner you teach it the happier that child will be. On 27 April 1861 President Abraham Lincoln suspended the writ of habeas corpus, the ancient Anglo-American prohibition against arbitrary arrest and imprisonment. Before the war ended, Lincoln's prisons held over 55,000, many of them journalists, but any hint of opposition to Lincoln's war would suffice for arrest. Now maybe y'all understand what is so dangerous about the present (& Bush) regimes insisting they have power to detain suspects indefinitely. Today the terrorists, tomorrow y'all. Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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