Whatever hopes stock investors held that stocks would surge ahead today were dashed. Dow dropped 14.68 (0.11%), turned back again by the noxious miasma at 12,300. S&P backed off 0.39% (5.45) to 1,397.91. Only a Dow close above 12,325 can turn this picture positive.

US Dollar Index did nothing today to salvage its reputation. Oh, it rose 7.5 basis points -- mere dandelion fluff in the wind -- to 78.784, but after so clearly breaking down last week, such moves arouse only contempt. Dollar index could rally all the way to 79.25 for a final kiss back to the trendline it broke through, but unless it closes above 79.50, the dollar will drop further.

Euro dropped 0.11% today to $1.3239. Dollar is breaking down, euro is holding up, & only the yen seems to be profiting. Euro does, at least, barely remain above its 62 DMA (1.3206). As Friday's chart plainly foretold, the yen advanced again today. Gained 0.47% to 125.29c (Y79.81/US$1). Will move higher until the Mystic Knights of the Central Bank hit it again.

Gold showed the sort of action I deeply love. It opened flat, got pounded on the US open, straight down, then fast and steady rose right out of that hole to close nearly unchanged. Well, closed at $1,663.40, down sixty cents. Why do I like that action? $,1645 support, then returned to challenge $1,665 resistance. This maintains the uptrend & thumbs its nose at sellers.

On that gold chart with the falling wedge, gold did no more today than fall back for a final kiss good-bye to the upper boundary. If gold can resist falling below $1,645, then it has broken out of that falling wedge and begun its next rally. Caution: there's likely to be a lot of very slowly rising mostly sideways action for a while. Remember that in the next week or so gold needs to burst through $1,682 resistance.

Silver dropped 38.8 cents today to 3095.9c. Low came at 3057.8c, about where we saw most of the lows last week. After the usual early morning opening attack on silver, it recovered but didn't trade up as high as gold, only to the 3100c level.

This also speaks with forked tongue on that falling wedge chart. The low took silver down through the wedge's upper boundary, but silver closed above it. Silver is laboring to break out.

Last week we saw the lows (I believe) now silver & gold are just breaking free of lower resistance levels before they start leaping.

On 30 April 1864 Began yankee General Nathanael Banks Red River Campaign in Louisiana. It was a complete failure, but Louisiana's governor Henry Watkins Allen, commissioned a report composed of eye-witnesses affidavits. I have seen this book, even used it. At one place the yankees were camped across the river on a Sunday and the people of the town came out to promenade as they did every Sunday. They were civilians, yet they fired on them. But the worst treatment was reserved for slaves, who were encouraged to follow after the Union army and told that the Confederates would kill them when they returned. Once these poor people had left their homes, they were abandoned. Thousands died. The eye-witness reports are horrifying. I had to put the book down, and walk away.

Will the person who wrote me Friday from 78257 please send me an email with a name and address I can read? I cannot comply with your wishes otherwise.

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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