The Moneychanger
Daily Commentary
Tuesday, 8 April a.d. 2014 Browse the commentary archive

Sorry I missed y'all yesterday, all the more since it was a near perfect day for silver & gold. I'll explain below.

First, stocks. Yesterday the Dow dropped only ten points while the S&P500 plunged a massive 20.5 (1.1%). That trashed the S&P500 chart. A two day waterfall took it from 1897.28 to 1845.04. This also was a completed key reversal. Today it cut into but closed above the 50 DMA (1,840.57), and flopped back 6.9 (0.38%) to 1,851.96.

The S&P is breaking down. Thus sayeth its position on the chart thus screameth its key reversal. Unless Wall Street's friends in the Plunge Protection Team, the Nice Government Men, step up quick the blood will be flowing up to the horses bridles.

Off a new all time intraday high on Friday, a push into new high territory, the Dow closed much lower, nearly 1%. That key reversal was confirmed yesterday with another drop and close below the 20 day moving average at 16,245.87. Today it bounced like a dead cat off the pavement, up 10.27 (0.06%). As with the S&P500, the MACD indicator has flashed a big red SELL signal. Much lower prices like ahead.

Dow in Gold has plunged in the last three days & today closed at 12.42 oz (G$256.74 gold dollars). This hints but does not confirm that the correction that began mid March has peaked. DiG is about to cross below its 20 & 50 DMAs. Close below 11.62 oz (G$240.21) takes it below the low of the Dec-March fall.

Dow in Silver dropped 0.93% today to 810.38 oz (S$1,047.76 silver dollars). It hovereth above its 20 DMA (805.93), first tripwire of a decline. MACD has turned down, & full Stochastics are confirming a downturn.

Today currency markets overthrew expectations. The Bank of Japan, contrary to the market's expectation, vowed it would hold off on monetary easing -- central-bank-speak for "inflating" -- in the short term. All the folks short yen promptly puked in their wastebaskets & splurted out orders to cover their short positions. Yen gapped up massively, above its 20 & 50 DMAs, from 97 to 98.5 at the widest. Closed up 1.34% at 98.29 cents/Y100.

Dollar took this news like a rockhammer in the teeth. Dropped a huge 50 basis points or 0.62% to 79.83, wiping out all its gains since mid-March. Considering how the US Dollar has struggled since bottoming in March, and now crashes through its 20 & 50 DMAs, it hath little hope for the future. It appears to have successfully transformed a nascent rally into Waterloo.

Aye, Matey (as the old salt would say), but 'tis an ill wind that blows no good. Oh, yes, and today the wind was blowing sweetly on silver & gold.

Gold rose today $10.70 (0.8%) to $1,308.70 while silver held its hand and rose 15.1 cents (0.8%) to 2004.2c.

Gold's little correction yesterday was picture perfect. Friday it broke through resistance at $1,295 after several tries, but closed below $1,305 resistance at $1,303.20. Yesterday it closed down at $1,298, lower but still holding solidly above $1,295 support, and closed ABOVE $1,305 resistance at $1,308.7.

May I warble further? Today gold also closed above its 200 DMA ($1,296.90) and, yet there is more. Gold has now rallied out of the Dec-February upside down head & shoulders, broke through the neckline of that formation in a rally to $1,392.60, corrected back to the neckline for a final kiss good-bye last week, and now 'tis climbing again.

THIS would be the place to buy. Although I have not yet decided yet whether the correction is complete, or whether we will see one more up and down, but I doubt any later leg down will drop lower than what we have seen. Above the 20 DMA lurks at $1,319.82. Crossing that will bring out many more of gold's fair weather friends. Gold has seen its bottom for a while.

Silver stands a gnat's eyelash from flashing an MACD buy signal, the full stochastic is turning up, rate of change is rising, AND (I'm almost out of breath) it bounced off its post-April 2013 downtrend line at end March. Yet for all in its favor, silver must yet close above 2015c. We ought to witness that tomorrow.

By the way, silver's performance yesterday was as good as gold, with a retreat to support at 1975c and bounce back today.

Gold/silver ratio today ended at 65.298, and is not dropping from its March peak as quickly as I would like, but what would I do with without something to fret about?

On 8 April 2014 the 17th Amendment to the US constitution requiring direct popular election of senators was ratified, thus destroying what was left of the constitution by destroying states' representation as states in the congress. What shreds of the Constitution Lincoln's revolution left, the Progressive era pulverized, then the New Deal blew away the dust.

On 8 April 1865 Confederate General Richard Taylor, son of President Taylor, routed the Yankees in the Battle of Mansfield, Louisiana and ended their Red River Campaign. Taylor was not only an effective & competent general, he also wrote the most engaging & charming memoir of the war, Destruction & Reconstruction. Having grown up in Washington, he knew everybody on both sides.

Back in 2007 we built a church sanctuary here. Because we wanted something that would go up quickly & fit our landscape, we picked logs. Because we wanted something beautiful that would last more than 100 years, we picked cypress logs. Cypress rots not, neither do bugs molest, nor fungus corrupt.

We sifted through all the manufacturers and landed on Ed Croker of Cypress Log Homes in Edwardsville, Alabama. We built what is probably the largest open span log building in the country, 36 feet wide, 64 feet long, 28 feet high, no columns, with walls punctured by five nine-foot doors on one side and six on the other. Ed could get not only cypress, but also the long, clear Douglas fir beams we needed to make the design work.

Ed coaxed, led, guided, and babied us through the job. When we needed materials in a hurry, he had them there next day at 7:00 a.m., although he's 4 hours of rough driving from us. Ed is that rarest of human beings, a man of integrity, honor, & skill.

My son & I saw Ed yesterday when we drove down to pick up a load of cypress siding. If any of y'all EVER want a log home -- and cypress logs are best -- do yourself a favor and talk to Ed Croker. He is, as we say in Tennessee, a man you could steal horses with. His website is There is none better.

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

— Franklin Sanders, The Moneychanger

Your source for gold and silver. Read our latest reviews and testimonials.
Market Snapshot See more charts and market data
8-Apr-14 Price Change % Change
Gold, $/oz 1,308.70 10.70 0.82%
Silver, $/oz 20.04 0.15 0.76%
Gold/Silver Ratio 65.298 0.042 0.06%
Silver/Gold Ratio 0.0153 -0.0000 -0.06%
Platinum 1,439.80 13.50 0.95%
Palladium 776.10 8.20 1.07%
S&P 500 1,851.96 6.92 0.38%
Dow 16,256.14 10.27 0.06%
Dow in GOLD $s 256.78 -1.95 -0.75%
Dow in GOLD oz 12.42 -0.09 -0.75%
Dow in SILVER oz 811.10 -5.64 -0.69%
US Dollar Index 79.83 -0.50 -0.62%
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: 1,308.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,344.59 1,354.40 1,354.40
1/2 AE 0.50 666.88 689.31 1,378.61
1/4 AE 0.25 333.44 351.20 1,404.78
1/10 AE 0.10 137.30 143.29 1,432.92
Aust. 100 corona 0.98 1,276.28 1,285.28 1,311.24
British sovereign 0.24 310.35 315.10 1,338.59
French 20 franc 0.19 246.15 249.17 1,334.58
Krugerrand 1.00 1,325.61 1,335.61 1,335.61
Maple Leaf 1.00 1,323.60 1,338.60 1,338.60
1/2 Maple Leaf 0.50 752.45 687.02 1,374.03
1/4 Maple Leaf 0.25 333.69 350.05 1,400.20
1/10 Maple Leaf 0.10 138.71 142.64 1,426.37
Mexican 50 peso 1.21 1,569.76 1,580.76 1,311.07
.9999 bar 1.00 1,313.18 1,327.60 1,327.60
SPOT SILVER: 20.02      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.25 28.25 36.93
VG+ Peace dollar 0.77 22.25 23.75 31.05
90% silver coin bags 0.72 15,100.80 15,350.80 21.47
US 40% silver 1/2s 0.30 5,714.15 5,864.15 19.88
100 oz .999 bar 100.00 2,007.00 2,057.00 20.57
10 oz .999 bar 10.00 200.70 205.70 20.57
1 oz .999 round 1.00 20.12 20.62 20.62
Am Eagle, 200 oz Min 1.00 21.52 22.72 22.72
SPOT PLATINUM: 1,439.80      
Plat. Platypus 1.00 1,454.80 1,471.80 1,471.80
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© 2015 Little Mountain Corporation, d.b.a. The Moneychanger. All rights reserved. May not be republished in any form, including electronically, without our express permission.

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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