What in the world ails y'all? I go away for three little days & y'all let the market go to pot. I'm just kidding. I know markets had lots of help from the Nice Government Men, trying to keep the poor folks poor, and succeeding quite handsomely. Y'all think now, before you moan & whine about silver & gold: Spain's toe is caught in the wringer so tight that the EU had to bail out their banks to the tune of $125 billion, bringing the grand bank bailout total to $600 billion, counting Ireland, Portugal & Greece. They call it a fix, I call it putting spider webs on a squirting artery. Markets were not fooled, as European stocks buckled today & Spanish bond yields rose (folks are afraid the government will end up holding the banks' bag, so they want more interest.) Now think: if you were the scurvy lot called the central bank heads, what would you do when your banking system was flying apart? You'd get in that market and sell the SNOT out of silver to drive down gold, & you'd do the same for gold. If you didn't, your masters would carry you out behind the Fed building & shoot you. That's the world you live in, where the central bank musketeers are all for one, and one for all, and the people suck hind teat. Every one of these bailouts simply re-inforces & proves my iron presupposition: they have no weapon but inflation & therefore they will inflate. Otherwise, they die, and as Stalin said, "Ruling classes never leave the stage of history voluntarily." They cling to power, even if it devastates all the world. In spite of all the hootin' & hollerin' Thursday & Friday, charts haven't changed much. Euro looks sick as a cat eating grass & the yen has topped if it breaks 124. Today the Euro lost 0.33% to $1.2475 while the yen flatlined, up 0.6% at 125.95c/Y100 (Y79.40/US$1). Meanwhile the US dollar index hath not polished its image. Yes, today it rose 18.3 basis points (0.24%) to 82.694, but that's a long stretch from the June 1 high at 83.45. Just like that whiff of Ripple off a wine-o's breath, it can't be mistaken for anything but what it is, a downtrend. Would have to rally above 83.54 to gainsay that. Y'all don't want to hear about stocks if you own any, because today was one of the few cases on record of a corpse nailing shut its own coffin. Dow & S&P both paint the same five day chart, with a rally beginning Wednesday (from about 12,150 on the Dow) & climbing on Thursday, dropping but maintaining on Friday, peaking very early today with a move into new high territory, then collapsing. What I have described can be viewed from two angles. First, the Wednesday - today action has created a head & shoulders top with the neckline at Dow 12,400 (S&P about 1,308). Dow closed at 12,411.23, down 142.97 (1.14%) in lock step with the S&P500 at 1,308.93, down 16.93 or 1.26%. If that is a head & shoulders, stocks will rally once more to 12,550 before they fall again, this time piercing the neckline and falling like the stars over Alabama. Yet another observation must be addressed. A move to a new high intraday with a lower close for the day is the portentous first half of a Key Reversal. A lower close tomorrow makes all that H&S stuff immaterial and sends stocks back to the cellar, digging a tunnel to the center of the earth. If you still own stocks, you're getting a last warning to sell them & put the proceeds into silver & gold. Thursday was not kind to gold. It stepped over that $1,615 line right into an open manhole, & never stopped until it hit pavement at $1,555. Y'all interpret this as pleases you, but I say it was the Nice Government Men anticipating the trouble in Europe with a pre-emptory gold slam. Makes no difference, all their manipulating don't amount to spit in the wind or on the sidewalk. Gold brushed itself off and marched right back, gaining $3.50 on Friday and $5.40 today to close at $1,595.50. Gold's longer term chart looks as bogus as a $4.00 bill with a picture of Moe, Larry, & Curly. It shows huge swings back and forth, which, while conceivably possible someplace in the universe, simply doesn't fit against that May bottom & strong reversal rally on June 5. BWDIK? ICBW. So look at the aftermath. Gold "was driven" (passive voice obscures the actor) down to $1,556.50 but this series of rising bottoms -- $1,526.70, $1,532.10, $1,556.40 -- constitute what? AN UPTREND. Manipulation failed. Now gold is wrestling (or "rasslin'" as we say in Tennessee) with its 50 day moving average ($1,618.13). Once it pierces that mark again, it will yet once more sprint toward $1,682 resistance. Take a deep breath, y'all. Gold is okay. Nothing but your paper money is in danger. I'm fixing to tell y'all something else about silver that nobody else has grasped yet, but first the technicals. Silver's chart has the same sort of upside-down head and shoulders look to it that gold's chart shows. Low Friday came about 2790c & silver has been working its way higher ever since. Today it rose 14.5c to end at 2860.6 cents. Low came at 2825c, high reached 2894c, so 2900c presents the first barrier to be smashed. Silver closed today above its 20 DMA (2822c). Silver, too, has left in its wake a series of higher lows, but now needs to concentrate on climbing through 2900c & through its 50 DMA at 2994c. That's coming. Count on it. Bottom line says that for all the panic last week, the euro remains under deep suspicion, like a chicken-eating hound with feathers on his muzzle. Dollar ain't in much better shape, just sporting fewer warts & sores at the moment. Silver & gold survived the test and confirmed the strength & tenacity of their recent bottoms. Mercy! What more do y'all want? A government guarantee? On 11 June 1770 the great explorer Captain James Cook discovered the Great Barrier Reef off Australia -- when he ran aground on it. On 11 June 1859 the Comstock Lode, one of the world's richest silver finds, was discovered in Virginia City, Nevada. What most folks don't know, & has given me abundant opportunity to correct them on, is that half of the value of the metal coming out of the Comstock came from gold. So the silly myth that so called silver experts propagate, that the huge new supply of silver coming from the Comstock Lode forced the world off the silver standard, ranks with believing that during a solar eclipse the sky dragon is gobbling up the sun. Silver was demonetized by bankers, for their own purposes. English bankers, some say, who bought the passage of the Crime of '73 (silver's demonetization in the coin bill) for half a million in gold. Congress was a lot cheaper in those days. Here's my silver secret. Most every silver dealer believes that lying around somewhere out there exists an endless supply of US 90% silver coin. Hogwash. Coin has been melted since the late 1960s, & the supply is NOT infinite. Yet because it is more profitable for dealers to sell the silver American Eagles & similar coins, they sneer at 90%. However, we have watched in the last month as the more 90% we tried to buy, the higher the premium climbed, from about negative 85 cents to about melt today (buy side wholesale premium). Some wholesalers have temporarily stopped selling 90%, because they're afraid they can't cover it. Y'all watch. One day not too far away, 90% silver coin will begin carrying a premium as folks discover that the coin they spurned is in short supply. But what do I know? I'm just a natural born fool from Tennessee & don't even look up to congress.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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