Silver & gold have been beat with a barbed wire whip this week. Stocks moved sideway, as did the US dollar. Platinum & Palladium went to the woodshed, too. And to all of you folks who are sending me prophecies from Nostradamus, etc., about what silver & gold will do, I appreciate your efforts but I'll pass.
Stocks had a rough week, but strong day. At the very end of the day today it managed to reach 14,000 and climb over by half a point -- I'm not making this up. Dow closed at 14,000.57, up 119.95 (-.86). Not to be outdone, the S&P500 rose 13.18 (0.88%) to 1,515.60. Trend remains up and unbroken for stocks, but the down must not close below 13,835. Will most like reach a new all-time high very soon. Only thing in the way is 14,035.
No, I have not changed my mind about stocks. The top of this move will bring cheering & shouts, but that joy will turn to sharp sorrow. Look at stocks adjusted for inflation: the high came in 2000, and they remain in a primary down trend (bear market). Yes, I know that makes me sound dumber than a horned toad, but there it is.
Dow in Gold & Dow in Silver gapped up two days ago, gapped down yesterday, then rose a little today. Three days ago looked like a top, last two days they have blown hot and cold out of both sides of its mouth, like the man who killed his parents then threw himself on the mercy of the court because he was an orphan. Not sure what to make of it yet, but tain't normal, & 'twon't live long this way.
About this time yesterday the dollar index was trading at 81.475, and today is trading at 81.47. Dollar index is bumping up against 81.60, trying to break through to 82 - 82.50.
Every convincing lie contains some truth. That little bit of truth is what makes the counterfeit believable. Hence Ben the Bagman must occasionally manage the dollar upward to create the illusion of strength.
It's all a great illusion, the economy, the financial system, the banks, but as long as enough people believe the lie, the liar can get by with it. At times it takes so long that you begin to wonder if you ain't WORSE than a natural born fool for holding back, for not just going along to get along. Then you shake your head and say, "Shucks! I'd rather be a fool than a liar any day. A fool may be taken, but liars will be fryers." I ain't THAT big a fool.
The euro kept its head down & stayed flat today, closed at $1.3187, no change. Chart screams loudly that its rally is broken. Only needs to drop below $1.3150 to confirm that.
Yen continues to move sideways. Lost 0.32% today to close at 107.04. Euro/Yen cross rate rose a little today, but hit its high at 1 February & appears to have turned. Probably part of a deal made before the G20 met.
US$1=Y93.42=E0.7583=0.035137 oz Ag=0.000636 oz. Au.
On Comex gold lost $5.80 and plagued yesterday's trading with equivocation today. Silver lost 23.9 cents to 2846c. Both are up stoutly in the aftermarket, gold to $1,582 & silver to 2880c.
On a five day chart gold make a spike bottom about $1,558 Wednesday night, then climbed to a high at $1,586.93 today. That leg up looks impulsive, i.e., that's not merely a reaction to the previous fall, but the direction the market wants to go. Gold backed off most of the day, & the close at $1,572.40 nearly caught the low at $1,571.50. That low was about $10 higher than yesterday's. If gold intends to continue rising, it must not break today's low.
Longer term chart offers more encouragement still. Day before yesterday and yesterday gold punctured the lower Bollinger Band. Generally that marks the extremity of the move. Now it has traded up above the downtrend line form the 2011 high, and back within the lower B-band. RSI is strongly oversold and has been for a week. It's too early to judge, but all these point to a reversal soon.
Remember that at lows everybody is fearful, but at highs they bulge with bravery -- just the opposite of how they ought to feel. Therefore negative sentiment and pessimism -- especially our own -- often accurately pinpoints lows.
Silver's five day chart reveals double bottoms Wednesday at 2631c & Thursday at 2832c. Today a third low came in at 2836c. Clearly, silver will fall much further if it breaks 2830c. Up above it needs to clamber over the wall at 2890c.
On the four month chart silver never has fallen as far as the downtrend line from April 2011 high. It has clung regularly to a higher downtrend line, the bottom of its trading channel. In the last three days it visited that lower channel line, and broke through the bottom B-bands. Today it closed again inside the B-bands. Other indicators are also oversold.
I ruefully confess that the stubborn length of this correction has buffaloed me over & over, and stocks' strength. Then again, I don't claim to be a clairvoyant. When this happens I run back to my premises & check them out. They're still sound. Inflation continues, silver & gold will keep on rising. Cause continues, so will the effect.
Some sign will emerge, probably soon, that tells us it's time to load up on silver and gold. Meanwhile, the brave can buy.
On 22 February 1969 Barbara Jo Rubin became the first woman to win a US thoroughbred horse race. My source doesn't say what the other horses thought about having her out there on the track with them.
On 22 February 1889 President Grover Cleveland signed a bill to admit the Dakotas, divided into North Dakota ("The Rectangular State") and South Dakota ("The Other Rectangular State"), Montana ("The Almost Rectangular State") and Washington ("The Square State") into the Union. It was a great day for right angles.
On 22 February 1732 was born George Washington, so character was so consistent that not even modern day cynics can find anything to blacken him with. He was from Virginia.
On 22 February 1793 died Roger Sherman, b. 1721. He helped draft and signed the Declaration of Independence, member of the Continental Congress, and served in the constitutional convention (1787). It was Sherman who saw there an opportunity to shut and bar the door against paper money. Thus the new constitution did not allow the federal government to issue paper money, and provided that "No state shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts." Wonder is that though these words stand unchanged & unchallenged today, the safety they provide to all of us has been stolen. You want to see a judge wince and wallow and throw you in jail, next time you go to court for a traffic fine, etc., say to the judge, "Your honor, I want to pay this fine, but I understand that the constitution provides that no state shall make any thing but gold and silver coin a tender in payment of debt. Unless I give you gold and silver coin, I can't be sure I've paid the fine, but I have none. How can I pay the fine?"
It will change your life.
Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger