Watching markets is liable to make you feel bi-polar: one day king, next day pauper. That's why it's so important to filter the noise out of the symphony playing underneath. Today the scrofulous US dollar index rose 21.8 basis points (0.28%) to 80.346. Filter out the noise, & you'll see it doesn't amount to a hill of beans. Dollar index bounced today after careening through its 200 (80.76) and 20 (80.67) day moving averages on Friday. It hit the 50 DMA, 80.03, & today bounced. Even a flat basketball will bounce a little, but that ain't buoyancy. The theme playing beneath this began 7 days ago when the Dollar hit 81.46, then failed, and hath failed ever since. Can't repair that. Headed for 78.60 & lower. Oh, the Nice Government Men may slow it down, even engineer a tiny rally-ette or two to shake off, confuse, and demoralize the short sellers, but down it will go, or axheads start floating. A reader in the UK asked me about the British Pound, but I am loath to deliver such bad news: y'all a pretty much sunk. I don't keep up with British economic statistics, but what I read puts your situation somewhat lower than Europe's & somewhat higher than Japan's. Don't brag, the zloty's status is higher than Japan's, too. Look at chart at http://bit.ly/UaszX8 Looking at a two year four month chart plainly shows the Nice Government men managing the pound sterling in a range from $1.63 on the top to $1.525 on the bottom. Yes, it poked its head above that line in 2011, only to be soundly slapped back. In October it (nearly) hit $1.63 again, but has since dived for the ocean depths to close today at $1.6026. The pound has formed an even sided triangle, & once it punctures that bottom boundary, today about $1.59, it will sink toward $1,53 again. Nothing encouraging in that chart. If I were y'all in the UK, I'd be swapping paper pounds for silver & gold so fast the onlookers would think I was a threshing mill about to blow up. Of course, I would be doing the same with yen, euros, or US dollars, so don't take it personal, you folks in Great Britain. They're doing it to all of us. By the way, silver & gold look ready to turn up strongly against the pound sterling. Yen closed at 121.78 cents/Y100, like a barbell dropped off the Queen Mary looking for the bottom. Euro fell 0.35% to $1.2945. Might be headed higher against the US dollar, but not confirmed yet. US$1=Y82.12=E0.7725=0.029428 oz Au = 0.000574 oz Au. Stocks worked hard at disappointing their partisans again today,. Dow lost 89.24 (0.69%) to 12,878.13. S&P500 followed right along, losing 7,.35 (0.52%) to 1,398.94. No wonder, as stocks have run plumb up against the steep downtrend line their fall since early October hath drawn. See chart at http://bit.ly/U1xqHR They also bumped their noggin against the 200 DMA (12,993.03). Even if they punch through, they will hit strong resistance 13,300. Silver & gold spent another day digesting Friday's gains. Gold backed off $7.30 to $1,742.30 and silver gave back 15.6 cents to 3398.1c. Filter out the noise: for gold that amounted to nothing more than touching back to the 50 DMA ($1,741.96). Low at $1,739.86 handily defended that $1,740 support. For silver, it was merely a touchback to support, with a low at 3389c. Here's a Tennessee fool's guess: next little move will be stout, probably taping on 3550c for silver & $1,800 for gold. But what do I know? I spend all my nights huntin' possum & days sitting on the front porch. Won't be able to do that much longer. Armadillos are replacing the possums, & not even a buzzard will eat an armadillo & a dog won't track one. Back to the point: today made no change to the technical outlook for silver & gold. Gold needs to remain above $1,738 and silver above 3389c. And of course, they ought to keep steadily advancing. I still believe this breakout offers a rare opportunity to buy silver & gold at low risk. On 27 November 511, Clovis, King of the Salian Franks, who were Germans but living in France & later became the French, died and divided his kingdom among this four sons with the catchy names: Clotaire, Childebert, Chlodomer, & Theuderic. Clovis' wife was Clotilde, and he was the first Christian king of France and founder of the Merovingian dynasty that ruled France/the Franks for the next two centuries, until the Carolingians arrived. AT HOME IN DOGWOOD MUDHOLE Because I like to put my money where my mouth is, I asked my design genius Collin the Magnificent to put up a website at www.dogwoodmudhole.com. There you can read not a measly first page or copyright page or chiseling title page like you get on Amazon, but an ENTIRE chapter called "Pig Persuader." If you read it and don't laugh out loud at least once, probably with loud snorting, I will send you a quarter. And all the rest of the book is just as good, lots of it better, but this is one of my personal favourites. Go. Read. Buy At Home In Dogwood Mudhole. Unsolicited one reader wrote me that he had laughed himself "SILLY" reading it. More than one reader has bought a case or half a case, reckoning they could give no better gift for Christmas. I am humbled & gratified, and I bet if you'll read that chapter, you'll like it, too. Go on, click: www.dogwoodmudhole.com
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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