I'm antsy and uncomfortable that silver & gold have floated in the same range for so long -- but more of that later. All eyes are on the Fed Open Market Committee meeting tomorrow, when the committee will explain in un-parsable bureaucratese how they plan to jimmy the economy next. This spectacle is too painful, too repulsive for a fastidious and rational mind, the triumph of pygmies over giants, of envy & stupidity over honest and integrity.

Ain't central banking great?

Clearly the hopeless optimists in the stock markets expect great news -- by that they mean "more inflation" -- out of the FOMC, as stocks are blowin' & goin'. Dow levitated 95.51 (0.75%) today to perch on a cloud at 12,837.33. S&P500 floated up 13.2 (1.8%) to 1,357.98.

Looking at the more active and minutely more believable S&P500 (no stock index can be believed since the creation of the Plunge Protection Team in 1987 -- government manipulates every market) we find that the recent foray BELOW the neckline of the Head & Shoulders top formed February - May in fact traced out an upside down head & shoulders that targets a rally to 1,405. Interesting (to some people) is the shape of the S&P500's decline from its April high, plainly an impulsive five wave decline. That implies that the market's natural direction is down.

You! There! Put down that telephone! Resist at all costs the temptation to call your stockbroker, unless you are calling to SELL all your stocks & shift the proceeds into silver & gold.

That US dollar Index today lost more than it had gained yesterday. Vomited back 45.8 basis points (0.59%) to 81.386. Today's low market a double bottom with the weekend low, so the dollar index might stop there (81.20). Should it break that 81.20 support, then brace for a quick plunge to 80.74.

Euro profited from the dollar's fainting spell today. Rose 0.87% to $1.2687. Why do I care? I don't know. Dealing with fiat currencies to me is like having to sort dung beetles. No, that's not quite accurate. Dung beetles are actually a noble & worthy cog in nature's recycling machinery, while fiat currencies are in need of recycling themselves. Anyway, the Euro today managed to break through resistance left from the January low at 1.2624. Also, it has remained above its 20 day moving average (first sign of turning up) for five whole days. Euro might reach 1.2800 before its needle hits "Empty."

Yen rose 0.23%, but isn't really going anywhere. Touched its 200 dma (127.14) two days ago, & fell back chastened. No opinion here. Closed today at 126.70c/Y100 (Y78.93/US$1).

Gold today lost $3.50 to close Comex at $1,622.20.

For five days gold has remained between $1,608 & $1,635.40. Optimistically gold remains above its 20 (1596.86) and 50 (1614.90) day moving averages.

Why do I care? Markets do not like stasis, that steady state where nothing is changing. Static markets are easily to manipulate because they are delicately balanced, OR, they are a stand-off between evenly matched buyers and sellers, waiting for an explosion when one side or the other weakens. This doesn't feel like that fight of opposing forces -- too slow, too dull.

So watch out. Gold is banging away at $1,633 resistance, but supported at $1,615 - $1,608. Breaching either boundary will send gold skidding a long way, fast.

I'm not changing my opinion that gold's correction from last September has bottomed. However, you might see a short, sharp move here either way.

For the last seven days silver has been bound between 2820 and 2900. Today it ranged 63 cents between 3893c and 2830c. Today silver lost 30.3c to close at 2836.2c -- yawn. It fell barely below its 20 DMA (2841c).

Boundaries for silver are 2800c and 2900c. Up above the 50 DMA awaits at 2953c, the 200 at 3215c.

Face it: this is the seasonal doldrums for silver & gold. Usually they remain quiet across June & July, & only begin lacing up their running shoes in August for the September races.

Built in secrecy in 1862 by British shipbuilders John Laird Sons in Birkenhead, Confederate agents managed to slip the Enrica out of Liverpool 29 July 1862. In the Azores Captain Raphael Semmes took command, and the new commerce raider CSS Alabama took to the seas. With both sail and steam engines, the Alabama could make 13.25 knots. Altogether, she would burn 65 Union vessels, most of them merchant ships, but she never harmed a ship's crew or passengers.

Badly in need of re-fitting, on 11 June 1864 Alabama arrived in Cherbourg, France, but while she was there the USS Kearsarge arrived, too, and waited outside the harbor. Rather than let his worn out ship rot in Cherbourg, Semmes chose to fight on 19 June 1864. In battle Alabama's deteriorated state told on her, and within an hour she was sinking. Forty-one of her crew, including Captain Semmes were picked up by a private British yacht that spirited Semmes away to England & deprived the yankees of a prisoner. WHAT WOMEN DON'T GET:

Don't get me wrong, I love & admire women. I have been married to the same woman for nearly 45 years and intend to stay that way, but there are some things women don't get.

For example, women believe that a male body not moving is a wasted male body. I know that women's active, frugal nature makes them want to avoid waste at all cost, especially wasting a perfectly good male body. However, there are valid reasons why a male body might be at rest, and hence, needs no errands, jobs, or tasks. Here are just a few valid reasons.

A. He is reading. (No, this is NOT a waste of time.)

B. He is thinking -- rare, I know, and unlikely, but possible.

C. He is watching a game or movie on TV. (Yes, this IS a valid reason.)

D. He is taking a nap. (Highly valid)

ANY of these fully occupy the non-moving male's time and brain, are not a waste, and do not beg for errands. My wife just doesn't get this. Let me stand still more than 30 seconds, & she's firing orders. I love her, but she doesn't get this. She thinks I'm an errand waiting to happen.

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

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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