The Moneychanger
Daily Commentary
Wednesday, 22 January a.d. 2014 Browse the commentary archive

For the second day running, all stock indices but the Dow rose while the Dow fell -- a striking contradiction & non-confirmation.

Dow gave back 41.1 (0.25%) to 16,373.34, markedly below its 20 DMA (16,434). This stands against a backdrop of a downtrend (series of lower highs and lower lows), matched by other indicators pointing down. Ignore that at your own peril.

Meanwhile the S&P500 doesn't look much healthier, despite its 1.06 (0.06%) rise today to 1,844.86. It still floats above its 20 DMA (1,838), without making clear whether this is a consolidation or continuation pattern.

Stocks are in that position were your breath checks when you look at the chart. Both indices need to close above recent highs to turn solidly up.

Neither Dow/Metal indicator moved much today. Dow in gold ended at 13.24 oz (G$273.69). Dow in silver added 0.1% to 827.35 oz, and is dancing on the 20 DMA.

I take away the impression that stocks are a market under pressure, strong from both sides. Whichever side gives up first will push the market in his direction.

Loathsome, despicable fiat currencies did nothing remarkable today. US dollar index inched up 6 basis points to 81.29. Still going nowhere in an uptrend. Euro lost 0.13% to $1,3545, pausing in mid-air on its way to $1.3300. Japanese yen nudged down 0.28% to 95.66 cents/Y100, rapidly going sideways & nowhere.

Silver & gold closed lower, confirming a key reversal & calling for lower prices. Silver dropped 2.9 cents to 1980.9c and gold lost $3.30 to $1,239.00.

Gold hit the neckline of its little upside-down head & shoulders yesterday but closed lower, then closed lower today. Shoulder line of that inverted H&S is about $1,212, so gold must contain any retreat there. Lower close tomorrow clinches a re-visit to $1,220 at least.

Silver closed lower today, too, also confirming a key reversal. What might contain it? 1940 cents, where there's strong support? 1930 cents, ditto? If those yield, then look for another trip below 1900.

On 22 January 1689 parliament invited William & Mary to become join sovereigns, throwing out James II, the last of the stupid Stuart kings, establishing the supremacy of parliament over the king, and ending the Bloodless Revolution. It also was a victory for Whiggism, which has foisted on us its endlessly tedious and utterly false theory that history is always progressing, all by itself. One glance from George Washington to George Bush blows that theory apart.

On 22 January 1575 Queen Elizabeth I granted Thomas Tallis & William Byrd a 21 year monopoly for printing and publishing polyphonic music. Although he wrote other music, Tallis wrote primarily church music & is considered one of England's greatest composers. His few songs I know are charming and peaceful.

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
22-Jan-14 Price Change % Change
Gold, $/oz 1,239.00 -3.30 -0.27%
Silver, $/oz 19.81 -0.03 -0.15%
Gold/Silver Ratio 62.547 -0.075 -0.12%
Silver/Gold Ratio 0.0160 0.0000 0.12%
Platinum 1,460.90 8.90 0.61%
Palladium 747.95 0.80 0.11%
S&P 500 1,844.86 1.06 0.06%
Dow 16,373.34 -41.10 -0.25%
Dow in GOLD $s 273.18 0.04 0.02%
Dow in GOLD oz 13.21 0.00 0.02%
Dow in SILVER oz 826.56 -0.86 -0.10%
US Dollar Index 81.29 0.06 0.07%
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,238.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,271.11 1,282.26 1,282.26
1/2 AE 0.50 631.33 653.52 1,307.04
1/4 AE 0.25 329.59 332.95 1,331.82
1/10 AE 0.10 131.22 136.28 1,362.79
Aust. 100 corona 0.98 1,208.30 1,217.30 1,241.89
British sovereign 0.24 293.39 305.39 1,297.31
French 20 franc 0.19 233.04 236.10 1,264.61
Krugerrand 1.00 1,258.72 1,268.72 1,268.72
Maple Leaf 1.00 1,253.90 1,268.90 1,268.90
1/2 Maple Leaf 0.50 712.37 650.42 1,300.85
1/4 Maple Leaf 0.25 315.92 331.41 1,325.62
1/10 Maple Leaf 0.10 131.32 135.04 1,350.40
Mexican 50 peso 1.21 1,481.67 1,492.67 1,238.01
.9999 bar 1.00 1,243.24 1,254.90 1,254.90
SPOT SILVER: 19.82      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.00 32.68
VG+ Peace dollar 0.77 19.50 22.00 28.76
90% silver coin bags 0.72 14,814.80 15,064.80 21.07
US 40% silver 1/2s 0.30 5,655.15 5,805.15 19.68
100 oz .999 bar 100.00 1,972.00 2,067.00 20.67
10 oz .999 bar 10.00 203.20 204.20 20.42
1 oz .999 round 1.00 19.92 20.42 20.42
Am Eagle, 200 oz Min 1.00 21.57 22.82 22.82
SPOT PLATINUM: 1,460.90      
Plat. Platypus 1.00 1,485.90 1,525.90 1,525.90
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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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