We had a fine time at the Upcountry Literary Festival in Union, South Carolina. Susan & I saw our friend Karen Stokes again & picked up her new book, The Soldier's Ghost: A Tale of Charleston. Set just as the War Between the States ends, it is a touching and wondrously woven mystery. Characters are well drawn and faithful to the period. It's only 111 pages, so Susan & I read it to each other on the way home. Readers young and old will enjoy this one. Only $6.29 from Amazon, http://amzn.to/1gT1BfO
Markets are teetering back & forth & not even blizzard of new bucks from the Fed can give them rest and direction.
Sorta spooky in stocks. On Friday the S&P500 made a double top intraday at 1,883.97 with the 1,883.57 March high. That also flashed the first half of a key reversal (new intraday high for the move with a lower close for the day) & confirmed that as a key reversal today with a lower close. That 1,857.64 close, down 9.08 or 0.49% also fell below the old uptrend line I've been writing about.
That ain't all. Since that earlier March top the S&P500 has formed an even-sided triangle -- Friday's high punched above it but Friday's close fell back within it). Today it closed near the bottom boundary of that even-sided triangle.
I remind y'all that even-sided triangle formations do not hint which way they will break out, only that they will soon. With that spooky double top and an MACD pointing downward, odds lean to a downward breakout. However, volume fell so maybe 'twill teeter back the other way. Chart's at http://bit.ly/1rqs11r
Dow closed at 16,276.69, lower by 26.08 (0.16%). It has also painted both halves of a key reversal Friday & today, & closed below its 20 day moving average (as did the S&P500).
I am biased to expect another peak between now & June, but I can't argue with a chart. This one looks heavy, like a cast-iron kite.
Zut alors! The Dow in Metals jumped up today, but struck some provocative points. Dow in gold rose 1.61% to 12.41 oz (G$256.54 gold dollars) & stopped on the 50 DMA (12.41 oz). Could market the upward correction's limit, but no other indicators argue for that outcome except the full stochastics.
As we always expect from more volatile silver, the Dow in Silver has moved further, up today by 0.95% to 811.12 oz (S$1,048.72 silver dollars). That's well above its 50 DMA (784.40 oz) & at an old internal resistance line whose lineage would be too complicated to explain. Momentum is up for the nonce, but those who swapped stocks for silver back in June 2001 when the Dow cost 2,562 oz are not much bothered.
US dollar index has once again proven true to character & stabbed its friends in the back. Last week it broke bravely upside out of a bullish falling wedge, slammed into its 50 DMA at 80.50, then fell back as fast as it paper legs cloud carry it. Closed today at 80.06, 19 basis points (0.24%) cheaper than Friday. Technically still in an uptrend, but to me remains esthetically & instinctually a piece by Bela Bartok or Marc Chagall. (Call me a Philistine, I don't care. Y'all expect a nacheral born fool from Tennessee would like music that don't muse & pichers that don't picher nothin'? Not likely.)
Euro meanwhile appeared to recover from its breakdown last week. It climbed 0.34% to $1.3840. Say what you will, it is a chart I would never buy.
Yen moved a giant 0.1% up to 97.82 cents/Y100. Range-bound, & sayeth naught until it closeth over 99.24 or beneath 96.38.
Gold caught an updraught on Friday but hit the skids today, losing $24.80 to close Comex at $1,311.20.
Until about 9:30 EST gold was fine if lower, trading about $1,325. Then it dropped to $1,315, traded sideways, and fell as low as $1,308.50. Tomorrow & the next day might see gold climb, but the ultimate target here is [likely] either the meeting of lateral support & the 50 & 200 DMAs around $1,300, or the 50% correction of the December - March rally at $1,287, coinciding with the neckline of gold's upside down head & shoulders traced out November - January.
Lo, this is not grist for y'all's panic mill. It's a correction. Normal, after a long rally. Take a deep breath.
Silver today lost 24.3 cents & closed Comex at 2004.3c. Like gold, silver was rocking along smoothly between 2010c and 2025c until about 9:30 when the selling struck, taking it down to 2003c. Silver fought back with a rally to 2020c, but the rest of the day wore it down. In the aftermarket it fell even lower than the Comex 1997c low.
In silver look for an ultimate (by month's end) target from 1975c to 1945c. More likely is something around 1950c - 1960c, where the downtrend line from April 2013 now intersects. Recall that silver burst through that line on 14 February, so it would be typical for it to kiss back to that breakaway line before it resumes rallying. Another nested target is the 75% correction of the Dec - February rally at 1958.5c. It has already fulfilled a 61.8% correction at 2004c.
Gold & silver will probably spend most of the rest of March correcting. Soon will come an exceptionally favorable buying opportunity. Watch. Get ready.
On 24 March 2014 Charles II of England awarded the Carolinas in America to eight noblemen who had helped restore him to the throne. One of the few good things a Stuart ever did.
On 24 March 1721 the immortal Johann Sebastian Bach published the six Brandenburg Concertos.
Whoops. On 24 March 1862 Abolitionist Wendell Phillips speaks to a Cincinnati crowd about emancipation & is pelted by eggs. Maybe the war wasn't about slavery after all.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger