The lying government employment report was issued today, and although it was higher it wasn't high enough to please the stock market, pleased the bond market, and whacked the US dollar in the back of the neck. Silver & gold profited, and note that they rose for the week.
Before I say anything in this 24-hour time horizon commentary, I want y'all to step back & look to the LONG horizon. Nothing has changed: governments & central banks have no constraints on spending and money creation -- one feeds the other -- so they will keep spending & keep creating money until their trajectory lands them face flat against the asphalt. All the bogus stock market rallies engineered by money creation won't change a thing, & surely won't jump-start the economy. (Governments and central banks don't even have any jumper cables, just a hose to drain gas tanks.) Today the government/central bank Siamese twin is running the economy, and markets are not free, never mind what all the goofy conservatives & politicians tell you. If you want proof, try to open a business & you'll find out the true purpose of regulation, namely, to stifle the competition.
So out there on the long horizon you ain't gonna retire on your 401k or IRA or pension or social security, because those are losing value fast as a man bleeding through a carotid artery. Only two ways I know to protect yourself from these irrevocable trends: (1) get a recession- & inflation-proof business that generates a stream of income, and/or (2) buy gold and silver to hedge the currency's purchasing power loss.
Or, you could vote & write your congressthing. I'm sure the politicians will fix it for you.
Onward & downward! To markets!
If y'all want to see a chart of a market you do NOT want to own, go look at the chart of Facebook stock at http://bit.ly/1hpiu1Y This is a classic view of something that is about to sink like a Jumbo Jet in the ocean. It broke down through its uptrend line, traded back up to support, then fell off sharply. The walking dead.
Stocks today justified that uneasiness I have been expressing in spite of their higher highs. Gagging on the employment report, which really wasn't that bad, the Nasdaq lost -- mercy! -- 2.6%, N-100 lost 2.7%, Dow lost 0.95%, S&P500 lost 1.25%, Russell 2000 lost 2.2%. Loss was across the board, as they say.
Specifically, the Dow lost 159.84 to end at 16,412.71 and the S&P500 shed 23.68 (quite a case of dandruff) to 1,865.09. The bleedin' was ginral.
What meaneth this? Both indices broke through an upper boundary of a triangle, then fell back within the triangle. See Dow chart here, http://bit.ly/1hpjYJp This makes the breakout look like a fake-out, a false breakout, a sign of coming weakness.
WHOA! Look at those charts of the Dow in Gold & Dow in Silver, http://bit.ly/1oz1tw1 and and http://bit.ly/1dYWfoy
Dow in gold sank 2.25% to 12.59 oz (G$260.26 gold dollars). This could be the peak of correction we have been watching. Remember, the primary (15-20 year) trend of the Dow in gold is down, as it has dropped from nearly 45 oz in 1999. It will keep dropping until it reaches one to two ounces (G$20.67 to G$41.34).
Dow in silver has also turned down, as convincingly as gold. Lost 1.61% today to 822.49 oz (S$1,063.42 silver dollars).. 20 DMA lies beneath at 803.06.
US DOLLAR INDEX, defeater of hopes, betrayer of futures, stifler of prosperity, sank again today. Lost 7 basis points (0.08%) to close at 80.56. Hovering above its 50 DMA (80.31) it will probably rise more, but it's about a sick dog. No spirit at all in its rise.
Y'all be glad you don't own euros. Euro sank 0.12% today, now below its 50 and 62 & 20 day moving averages headed for the 200 about $1.3500. Closed today at $1.3701. Yen pulled a little 0.67% surprise rally-ette to reach 96.88 cents per Y100. Stay away. Lower prices await.
Frankly, I can't figure out why the bond market interpreted the lying jobs report as negative for interest rates, & don't care to guess. It did though. Bonds rose while the 10 year treasury note yield fell 2.29% to 2.726%.
What I love to see is gold rising against all scrofulous, scabby fiat currencies, & that's what we see right now. Against the pound sterling gold bottomed at 768.2, turned up, and today broke through the downtrend line & touched the 50 DMA and close at 786. Against the Yen gold turned at 13,180 a week ago, turned up, and today closed above the 50 DMA (13,400) at 13,460. Forget not the euro. Lo, the selfsame pattern, bottom a few days ago at 926.20, burst through downtrend line, punched the 50 DMA today, and closed at 951.
Today gold rose $18.80 (1.5%) to close Comex at $1,303.20. Silver jumped 14.1 cents to 1992.7c. Where does that put us?
Gold blasted the roadblock at $1,295 and jumped to $1,307.50, then settled back a little. Gold jumped above its 200 DMA ($1,296.75) and important 150 DMA ($1,292.35), plus lateral resistance from $1295 - 1,300. Walked through the downtrend line three days ago, and almost touched the 50 DMA ($1,309) today.
What more do y'all want? Okay, full stochastics have turned up, rate of change is racing toward the positive side, MACD is trying to turn up, RSI has turned up. Friends, gold will move higher next week.
Lifting up the horizon, Gold's weekly chart shows it above the 18 WMA & barely below the downtrend line from the 2011 high. Monthly chart puts gold at the perfect place to buy, right up against its long term uptrend line. So, no gainsaying in the weekly or monthly charts. Trend is embryonic, but up.
Silver walked through its downtrend line 5 days ago, after touching the downtrend line (day of its low) from April. Silver did not climb above its 20 DMA but the MACD is turning up and probably will cross upward for a buy signal Monday or Tuesday. Full stochastics have reversed upward.
Not enough weight? Okay, turn to the weekly chart. Silver skidded down to its downtrend line from the 2011 high (remember, it has been trading above that line for weeks), barely below its 20 week moving average (2026c), & closed up for the week. Weekly MACD is striving to point up. Monthly chart is near the long term uptrend line, and about to break out of a triangle formed with the downtrend from 2011.
Where's the fishhook? Well, I believe that silver & gold have completed their correction, but my count might be wrong. If so, they might rally, then fall back to the same or a slightly lower low as what we've seen. I think they've begun their next leg up, but markets have humbled me so I've learned to hedge. Gotten almost as proficient at it as a central banker.
It's time for y'all to buy silver & gold. Past time.
On 4 April 1818 the territory of Orleans became the 18th state known as Louisiana. When I lived there nobody could figure out whether Louisiana was the easternmost Arab republic or the northernmost banana republic. I don't know, but I'll promise y'all this. Folks from Louisiana have so much personality that it just has to come busting out somewhere. They are so much fun they'll tire you plumb out.
On 4 April 1902 the founder of Rhodesia, international adventurer & racketeer, Cecil Rhodes set aside $10 million for a scholarship for Americans to study at Oxford. It was part of his plan to extend British hegemony over the whole world and a one world order with it. He was a thoroughly corrupt, greedy, and nasty person who began the Boer War.
Tragedy struck the lives of millions of American children on 4 April 1984 when Bob Bell retired as Bozo the Clown after 24 years.
Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger