The Moneychanger
Daily Commentary
Thursday, 29 May a.d. 2014 Browse the commentary archive

Stocks are hovering. All attention -- and money -- has been poured into the S&P500, and today it rose 10.25 (0.54%) to make another new all-time high. Closed at 1,920.03. Yet no other index, particularly not the Dow, has made a new high, save the Nasdaq 100, which is close. If those other indices fall back, that's sort of like a platoon all taking one step back & leaving one man standing forward when volunteers are called for. Should some of those others start climbing, it might send stocks on another two or three week jaunt upwards into a final high.

Dow gained 65.67 (0.39%) to 16,698.74.

Dow in metals bumped up again. Dow in gold hit 13.29 oz (G$274.43 gold dollars), up 0.57%. Dow in Silver ended up 0.4% at 878.23 oz (S$1,135.49 silver dollars), a new high for the move. Going higher.

US dollar index, although it has pierced its 200 DMA (80.46) and remains above it, has backed off. Today it gave away 7 basis points and ended at 80.53. Technically it ought to head higher, but when? Euro gained the 0.08% today that the dollar index lost, but remains below its 200 DMA. Central banks fear markets as much as markets fear them. They dread to disappoint markets, so with all expecting some "easing" from the ECB, they will likely do so next week. Anyway, decision appears to have been colluded on amongst the central banks to let the euro fall.

What bothers my mind most about the dollar is that its movements overlap, like a corrective and not an advancing wave.

Yen rose 0.5% to 98.26, lost as a golfball in high weeds and baffled as a hog with a sidesaddle. In a nothing-much uptrend, but must clear 200 DMA and 99c/Y100 before it goes anywhere.

Gold fell $3.00 to $1,256.30. Silver shaved off 5.2 cents to 1898.3c.

When you are reduced to saying stuff like, "Well, if silver were really weak it would have fallen more after that break," you're grabbing at straws. That's true, it seems contradictory and might point to underlying strength that silver & gold have not followed through lower after Monday's big fall, but that's a backhanded compliment -- like saying a boy is ugly as a bucket of slop but at least don't smell bad, too. Who wants to rank in that league?

Here's something better.

Silver reached a new low for the move today at 1878 cents, but did not finish the day down there. In a sort of Step 1 of a Key Reversal (if you count the day and not the Comex), it traded down to 1878c and was still there about 1:30 central time. Before I could make up my mind to buy a little, it shot up a dime. If it closes higher tomorrow, I'll think about calling that a reversal.

They needn't have bothered to open up gold trading today. High came at $1,260.60 and low at $1,250.90 -- why bother for a $10 trading range? If the last two day's pause marks roughly the halfway point of the decline, it should stop around $1,240 or $1,230. Gold now needs a close above $1,280 to turn around.

For all my bellyaching, I'm not shorting anything here and I find myself buying.

On 29 May 1453 Constantinople fell to the Ottoman Turks, ending 1100 years of the Byzantine Empire.

On 29 May 1765 Patrick Henry introduced the Virginia stamp Act Resolutions. He used these inflammatory words: "Caesar had his Brutus, Charles the First his Cromwell, and George the Third -- [dramatic pause] -- may profit from their example." Interrupted by cries of "Treason!" he shot back, "If this be treason, make the most of it!"

In case you are wondering, nobody of that caliber is known today in any state Assemblies, let alone in Washington. But if there are any budding Patrick Henrys, they'd a lot more likely be found in Statehouses than in the Capitol.

On 29 May 1912 fifteen women were dismissed from Curtis Publishing company in Philadelphia for dancing the Turkey Trot while on the their lunch break. Oddly enough, Curtis was a song publisher. I reckon they didn't like that Turkey Trot in Philadelphia.

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
29-May-14 Price Change % Change
Gold, $/oz 1,256.30 -3.00 -0.24%
Silver, $/oz 18.98 -0.05 -0.27%
Gold/Silver Ratio 66.180 0.023 0.04%
Silver/Gold Ratio 0.0151 -0.0000 -0.04%
Platinum 1,462.10 -3.30 -0.23%
Palladium 833.80 -6.05 -0.72%
S&P 500 1,920.03 10.25 0.54%
Dow 16,698.74 65.56 0.39%
Dow in GOLD $s 274.77 1.73 0.63%
Dow in GOLD oz 13.29 0.08 0.63%
Dow in SILVER oz 879.67 5.85 0.67%
US Dollar Index 80.53 -0.07 -0.09%
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: 1,255.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,289.40 1,299.44 1,299.44
1/2 AE 0.50 639.80 661.33 1,322.67
1/4 AE 0.25 319.90 336.94 1,347.78
1/10 AE 0.10 131.72 137.48 1,374.77
Aust. 100 corona 0.98 1,224.49 1,233.49 1,258.40
British sovereign 0.24 297.76 302.51 1,285.09
French 20 franc 0.19 236.16 239.25 1,281.48
Krugerrand 1.00 1,270.57 1,280.57 1,280.57
Maple Leaf 1.00 1,270.50 1,285.50 1,285.50
1/2 Maple Leaf 0.50 721.91 659.14 1,318.28
1/4 Maple Leaf 0.25 320.15 335.85 1,343.39
1/10 Maple Leaf 0.10 133.08 136.85 1,368.50
Mexican 50 peso 1.21 1,506.06 1,517.06 1,258.24
.9999 bar 1.00 1,259.89 1,274.50 1,274.50
SPOT SILVER: 18.97      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 26.50 28.50 37.25
VG+ Peace dollar 0.77 22.50 23.75 31.05
90% silver coin bags 0.72 14,493.05 14,743.05 20.62
US 40% silver 1/2s 0.30 5,404.40 5,554.40 18.83
100 oz .999 bar 100.00 1,902.00 1,952.00 19.52
10 oz .999 bar 10.00 190.20 195.20 19.52
1 oz .999 round 1.00 19.07 19.57 19.57
Am Eagle, 200 oz Min 1.00 20.82 21.22 21.22
SPOT PLATINUM: 1,462.10      
Plat. Platypus 1.00 1,477.10 1,494.10 1,494.10
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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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