Markets got pushed around this week like an old bull gets pushed around by a young one. In the end, silver & gold won, stocks won, the euro won, & the dollar & yen lost. Way to paint that tape, Nice Government Men!

Friends, you can believe a lot of things, but how can you believe something that gainsays itself out of its own mouth? I'm a fool, but not that big a fool. I reckon we raise a better run of fool here in Tennessee than in the rest of the world.

Media tells us that euphoria & generalized jubilation broke out in the stock market & the euro because the US employment report today -- which, I mark in passing, ain't worth no more than an "I love you" off a trashy girl's lips, cause it's a government number -- "beat expectations" & came in at 163,000 new jobs created instead of 100,000. Break out the champagne, right? Nope, the unemployment rate in fact rose from 8.2% to 8.3% (itself an hilariously understated number, maybe half or a third of actual unemployment). So right there its blowing hot & cold out of both sides of its government mouth.

That, at least, is what this Tennessee fool's common sense would logic out of that report, but durned if the mystery of stock & currency markets ain't too deep for me. First, the US dollar index lost a massive 100.3 basis points (1.29%). Throwing risk aversion & caution to the wind, the yield on US 10 year treasuries rose, after recent all time lows (bonds fall when yields rise, remember). That now begins to look as if it might be scratching out a bottom. So folks run out of dollars and out of Treasuries, but not just mincing along, they stampede.

Course my suspicious mind says the NGM, unable any longer to stand a high dollar and sinking euro, pushed markets over the brink into the deep. Makes no never mind, it happened.

Euro rose a ridiculous 1.68% to $1.2388. Jumped clean through its 20 day moving average (1.2242) & nearly plumb to the 50 dma ($1.2410). All of this is useless noise unless the euro can clear $1.2500, and then around $1.3000 there waits a minefield of resistance.

What y'all need to note here is that the dollar gave up all the last few days' gains as well as falling below its 20 DMA (83.18), its 50 dma (82.68), and below 83 support. It came to rest up against support of a fan line. from the Oct. 2011 low. Should that fail & the last low (81.50) not hold, the dollar will pay a visit to its 200 DMA (80.08).

Before I leave these nasty, scabrous fiat currencies, let me mention that the yen closed down 0.30% at 127.46 cents (Y78.46), and is making a megaphone formation, deadly to upward moves.

Stocks are showing themselves determined to try at least to move higher, yet today's performance, bold as it was, only posted a double top with last Friday. Stunning as it was, stocks' move means nothing unless they improve on it next week. There remaineth the chance that stocks will move back to May highs (S&P500 1,420 & Dow 13,300) before they fail. That would paint a baleful triple top over investor's hopes.

Dow today rose 217.29 (1.69%) to slightly better last week's high (13,076) & closing at 13,096.17. S&P500 gobbled up 25.99 (1.9%) to end at 1,390.99, versus last week's 1,386.

'Twas a week of correction for silver & gold, complete with a peach tree branch whipping. Yet after dipping back into their triangle formations, after gold touching its 50 & 20 DMAs, both ended the week well outside those triangles again. Looks like the final kiss good-bye before a rally. Rally may spend the rest of August rolling out, but the lower prices appear behind us.

Today gold vaulted 1.2% while silver leapt 3.3%. Further witness of a turnaround is today's significantly lower gold/silver ratio (57.791) after nearly touching the last high last week. Gold jumped $18.60 to $1,606. Silver grabbed 89 cents to close way above 2700c resistance at 2779c, above its 20 and 50 DMAs. Other indicators point higher, too.

Here's a very interesting study by Alf Field, "What happened to Gold? Part 2." http://news.goldseek.com/AlfField/1343740858.php Y'all go read it. Mr. Field has a better track record than almost any gold analyst I know, albeit long term. What's interesting here is that gold made a series falls of 88 days, 55 days, & 33 days, with a low falling 23 July. Add 11 days to that & you come to 3 August. Apparently the low came yesterday & was nearly matched today before gold shot up.

BOTTOM LINE: silver & gold have established and defended lows in their post April-2011 and post-August 2011 corrections. They may not run away from here, but time & price loudly argue that the correction lies behind us. Look for much higher prices in September. That suggests y'all ought to buy silver & gold here.

Down below silver must not fall through 2680c nor gold through $1,585, and above gold must steam quickly through $1,640 resistance & on to 1680

Don't let a long correction & all the central bank blarney & blather deceive you. Bad debt, sick economies, and rotten banks have not been cured. As it now appears, Obama will beat what's his name, Mr. Forgettable, & if he does he will let all the Inflationists & Spenders out of the loony bin. Not what I want to happen, but I'd be a pure king fool sure enough if I didn't tell y'all the truth.

On 3 August 1923 Calvin Coolidge was sworn in as president of the USA after then-president Warren G. Harding died. Coolidge, from Vermont, is one of my favorite yankees, a small and select number. Notoriously tight-lipped, some one once came to him and said, "Mr. President, I bet so-and-so I could get you to say three words." Cal answered, "You lose."

On 3 August 1829 Gioachino Rossini's "William Tell" opera premiered in Paris. Had he not written that opera and its overture, there would have been no theme music for "The Lone Ranger" TV show. Think of the cultural deprivation involved in that!

Y'all enjoy your weekend.

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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