The world awaited the Mighty Shot from the Ben's Blarney Cannon, but 'twas not the shot heard round the world but the shot barely heard across the street. No bigger than a mouse burp. Peetiful.

Constrained by a presidential election year & heavy political criticism, the Fed chose not to do anything more than bloviate & bluster. Stock & euro buyers weren't happy to hear that, and showed their displeasure by backing off.

Yes, I know that measles, too, is despicable, just like the Fed, but can still kill you. And the Fed can still cause monstrous spasms of pain & poverty, yet once again we see how despicable & powerless they really are. They're not running the economy, they're riding a tiger, praying like crazy they can hold on without getting mauled. The adults are all gone.

Stocks were slammed today from all sides. An electronic glitch stopped trading for a while, stock announcements were mixed, & the Fed refused to mount the white horse & ride to the rescue.

Dow yielded up 32.47 (0.25%) to close 12,976.21. S&P500 matched that with a 3.98 point (0.29%) fall to 1,375.34.

My, my, how a few days' passage has exposed Mario Draghi's boast he would do anything to save the euro, a boast empty as the Grand Canyon. Stocks were ecstatic Friday, & today are depressed. See how wonderfully well central bank manipulation works for markets?

Dow had appeared to have broken out to the upside of a rising wedge, which normally breaks out downside. Now it has traded back down into the wedge, begging one to conclude that it was a false breakout, & the market's true direction is toward the earth's core. A single 200 point bad day will take stocks out the bottom side of that wedge, & that won't encourage buyers any more than Mario Draghi's hogwash.

Once gold broke that $1,610 level it must inevitably re-visit $1,600. It did, even dropping today as low as $1,592.70. None of this is fatal, since gold shook off its torpor & closed down only $6.80 at $1,603.70.

On the longer chart, gold closed today barely above the even-sided triangle's top boundary, the one it spent 3 months sketching out and broke out of 6 days ago. Here's a chart at http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=0&mn=4&dy=0&id=p85205578226&a=270380095&listNum=1

Gold remains safely above its 20 day moving average ($1,591.71) and 50 DMA (1,592.33), & so far today's more looks like no more than a return to breakout for a kiss good-bye.

Left to itself, gold is trying to climb. However, tomorrow the European Central Bank will load up its Blarney Cannon for another salvo. That might blacken gold's face for a day or two, but I think the Fed has already done as much damage to gold as central banks can right now.

As my friend Sut would say, "You could put a central banker's soul into a turnipseed & it would have as much room to fly around as a leatherwing bat in a meeting house."

Markets taxed silver 37.8 cents today for a close at 2751.7c. Low came at 2716.5c, but point is that silver couldn't hold on above 2800c.

Bull markets climb a wall of worry, especially bull market rallies. Silver is always the more troublous metal as rallies begin, slower to start, jumpier. Unless tomorrow brings much weaker closes, gold below $1,580 & silver below 2680c, y'all will see higher prices next.

By the way, silver closed right on the upper boundary of that flat-topped triangle. Chart's at http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&yr=0&mn=4&dy=0&id=p16899828133&a=269969353&listNum=1

On 1 August 1291 the 3 Swiss forest cantons of Uri, Schwyz, & Unterwalden signed the Ewiger Bund der drei Waldstaetten, or Everlasting League of the Three Forest Cantons. It was the foundation of the Swiss Eidgenossenschaft, the Confederation but better translated "Comradeship of the Oath." By it the Swiss made good their independence from the Austrians, and kept their oath to one another. The problem with maintaining independence & personal liberty is that those who swear the oath must enforce it. America today is right short of those enforcers.

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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