Stocks must be even weaker than I thought, since the Dow plunged 106.77 (0.81%) today to 13,000.71 on news Ben the Bandit MIGHT not announce in his Jackson Hole speech tomorrow a new plan to inflate more. I'd just as soon Bernanke & the whole Crowd of the Mighty climbed down in that Jackson Hole & pulled it right in over the top of 'em.

My, my, that sure was a photogenic close, 13,000.71, a thin 0.71 points above the morale-bustin' 13,000 level. S&P500 lost 11.01 (0.78%) and ended at 1,399.48 -- whoops!. Stands right on the bottom boundary of that rising wedge, and the neckline of the January-May head & shoulders neckline. Wouldn't take more than a mouse burp to push it over the cliff.

Well, well, dollar index performed today about as expected -- down a leetle yesterday, up a leetle today. Trading now 81.689, up 14.2 basis points. Trend is down, but the Nice Government Men are stretching it out as long as they dare.

Euro backed off 0.19% to $1.2506, sidling sideways. Yen did the same, but rose 0.14%. Nobody's moving, afraid of imminent fire from Ben's Blarney Cannon.

I understand the gold closed lower today, down $6 to $1,653.50, but on the 5 day chart it looks like nothing at all but a sideways range, no new low, no new high, just about the same range as yesterday. High at $1,663.84, low at $1652.3. Close below $1,645 gainsays the flag on the gold chart, so watch out.

Silver, on the other hand, fell 47 cents today to 3036.7 and made a new low for the move at 3022.5, about as far as it can travel & still keep that flag in play. Closed nearly on, but a smidge below, its 200 DMA (3042).

Times like these make me feel about central banks, central bankers, & fiat money the same way a ten year old feels about chicken pox and liver.

Y'all be patient. Whatever Ben bloviates, y'all already know it'll be something everybody already knows. He's full of clichés like, "The youth of today are the leaders of tomorrow" and other remarkably deep insights. I'd rather fall into starving chiggers than have to listen to one of his speeches.

Back in the days of the War for Southern Independence before there was a Federal Reserve they couldn't appoint worthless incompetents to the Federal Reserve board, so them made 'em Union Army generals. On 30 August at the second battle of Manassas Confederate forces again beat the Union Army at the same spot, but this time Union General John Pope was to blame.

I walked into the kitchen yesterday & thought the Last Great Chicken Slaughter had happened. Naked chickens were piled chin high in the sink. Then I noticed they were all in plastic bags. Thawing. Oh, yeah, my wife Susan was getting ready to smoke them for the Bodacious Hoedown on Saturday. She's over near the barn now, six smokers billowing like blast furnaces, happy as little girl with a new kitten.

Y'all are still welcome to join us. Read about it at http://the-moneychanger.com/hoedown_2012.

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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