The Moneychanger
Daily Commentary
Monday, 18 November a.d. 2013 Browse the commentary archive

Y'all, I am having a great time hearing what people have to say about At Home in Dogwood Mudhole, Volume 1 and Volume 2. It's enough fun that not even markets can depress me today.

Today probably marked at least a short-term top in stocks. Dow poked its nose over 16,000 (16,030.28) but its nose started bleeding. Dow closed at a new high, but backed off. Ended up at 14.32 (0.9%) at 15,976.02. S&P500 lost 6.65 (0.37%) to 1,791.53. This lower close came after a new intraday high, so is the first half of a key reversal. Fact is, the whole day had that key reversal feel, where optimism suddenly crumbles & flees in panic.

None of that says this is THE top for stocks. It could be, but probably only begins a correction, with the ultimate top in early 2014.

Oddly enough, although the Dow in Gold made a new top by a tiny bit, 1253 against June's 12.514 oz, the Dow in Silver closed at 783.52 oz, 4% from its June high at 816.77 oz. That screams "Non-confirmation!" Watching.

Y'all know I barely trust my own judgment on the US dollar. Oh, I don't mean my long term judgment that the Fed will keep on gutting the dollar until nothing's left. I mean that I find the whole crooked setup so hateful that it clouds my judgment short term. So I read what other analysts have to say, and find that some are expecting a big dollar rally, while others look for the dollar index at 40 or lower. So I reckon I'll have to fall back on myself.

Dollar looked sick today closing down 7.2 basis points (0.9%) to 80.734, falling away from 81 & the 200 day moving average. Dollar hovereth even now right above its 50 DMA at 80.46, and it broke today the little support it had built around 80.90. If this is not the wash-out day that marks the low, the dollar might have a troublesome week. "There will be issues," as they like to say in Washington.

The euro just won't stay down. Rose today 0.7% to $1.3507, but has formed a bearish rising wedge that points to a downside break out. Still, it punched into its 50 DMA today ($1.3535). I just can't see the euro as a dollar competitor. I mean, the crooks & looters in the Fed & in the US Treasury are genuine world class criminals with over 70 years of experience. What are Draghi & the ECB & the regulation- smothered EU compared to experienced global vandals? Newcomers. Amateurs.

Yen rose a little in its ongoing agonizing death. Closed 100.03 cents/Y100, up 0.17%.

If y'all are expecting some big revelation about silver & gold from me today, I reckon y'all will be disappointed. They just didn't DO anything to change the situation.

Gold lost $15.10 (1.2%) and wound up at $1,272.20. Silver yielded 36.8 cents (1.8%) to close Comex at 2034.9c.

Where does that leave them? Gold remains above the uptrend line from the June low, but I mean barely. Silver is below that uptrend line but above the top-of-the shoulders line of what I believe is an upside-down head & shoulders. Silver's RSI is about to reach "I am REALLY oversold" territory instead of merely "oversold." MACD points down, rate of change is negative. Silver is below its 200 (2351c), 50 (2186c), & 20 DMAs (2175c).

I keep asking myself why it doesn't fall further -- what's holding it up? Answer: somebody is buying, & not many selling. But one way or the other it will pull away from this place, because too much instability & tension lies here.

GOLD also stands below all its moving averages, MACD & RoC are negative, RSI is not terribly oversold. What I don't see is some evidence of an imminent reversal. Gold silver ratio climbed today to a new high for the move, 62.519. The upmove displays two gaps, so today might mark exhaustion.

Well, sufficient for the day is the trouble thereof. I've been doing this long enough to know that some days you win, and some you lose. Sometimes you get hit in the mouth, and some days you get gold fillings. (that's a touch of my dental philosophy). Just be patient -- the trend is our friend, and the primary trend still points up.

Allegedly on 18 November 1307 Swiss crossbowman William Tell shot an apple off his son's head, forced to the act by an Austrian tyrant, Gessler. Gessler had placed his hat on a pole in Altdorf and commanded all the townsfolk to bow before it. Tell cam walking into town & publicly refused to bow. Gessler had him arrested and said he would execute him and his young son unless he could shoot an apple off Walter's head. With one bolt from his crossbow, Tell split the apple.

Gessler had noticed that Tell had taken two bolts out of his quiver not one, so before he let Tell go, asked why. "Simple," Tell said. "If I had killed my son, I would have used the second on you."

Gessler had him arrested again and tied up to be taken to his castle at Kuessnacht across Lake Luzern. Tell escaped along the way, then ran across country to ambush Gessler. He found him at a place called Hohle Gasse (Sunken Alley) and shot as truly at Gessler as he had at that apple.

Tell's refusal to bow and assassination of the tyrant Gessler led to a rebellion that eventually freed the Swiss cantons and let to the founding of the Swiss Confederation, which in German is Eidgenossenshaft -- the Oath Fellowship.

God bless the Swiss!

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
18-Nov-13 Price Change % Change
Gold, $/oz 1,272.20 -15.10 -1.17%
Silver, $/oz 20.35 -0.37 -1.78%
Gold/Silver Ratio 62.519 0.382 0.61%
Silver/Gold Ratio 0.0160 -0.0001 -0.61%
Platinum 1,409.20 -27.90 -1.94%
Palladium 716.40 -15.90 -2.17%
S&P 500 1,791.53 -6.65 -0.37%
Dow 15,976.02 14.32 0.09%
Dow in GOLD $s 259.59 3.27 1.28%
Dow in GOLD oz 12.56 0.16 1.28%
Dow in SILVER oz 785.10 14.64 1.90%
US Dollar Index 80.82 -0.21 -0.26%
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SPOT GOLD: 1,272.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,307.72 1,316.62 1,316.62
1/2 AE 0.50 648.26 671.03 1,342.07
1/4 AE 0.25 338.43 341.88 1,367.51
1/10 AE 0.10 134.74 139.93 1,399.31
Aust. 100 corona 0.98 1,236.94 1,246.94 1,272.13
British sovereign 0.24 301.25 313.25 1,330.71
French 20 franc 0.19 239.28 242.30 1,297.81
Krugerrand 1.00 1,295.00 1,306.00 1,306.00
Maple Leaf 1.00 1,287.10 1,302.10 1,302.10
1/2 Maple Leaf 0.50 731.46 667.85 1,335.71
1/4 Maple Leaf 0.25 324.39 340.29 1,361.15
1/10 Maple Leaf 0.10 134.84 138.66 1,386.59
Mexican 50 peso 1.21 1,521.37 1,536.77 1,274.59
.9999 bar 1.00 1,276.55 1,288.10 1,288.10
SPOT SILVER: 20.36      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 26.50 34.64
VG+ Peace dollar 0.77 22.00 24.25 31.70
90% silver coin bags 0.72 15,197.33 15,447.33 21.60
US 40% silver 1/2s 0.30 5,812.98 5,962.98 20.21
100 oz .999 bar 100.00 2,025.50 2,095.50 20.96
10 oz .999 bar 10.00 208.55 209.55 20.96
1 oz .999 round 1.00 20.46 21.01 21.01
Am Eagle, 200 oz Min 1.00 22.11 23.36 23.36
SPOT PLATINUM: 1,409.20      
Plat. Platypus 1.00 1,434.20 1,474.20 1,474.20
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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.

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