All right! We got some sings of life out of silver & gold today. Okay!
US dollar index lost 92 basis points of that 107 bp it won on Friday, leaving today looking a lot like a key reversal, only because its 86.85 high lacked 2 bps of Fridays. Nonetheless, a follow-through tomorrow will confirm the dollar's reversal. Closed at 85.89, and fell off its grotesquely overbought condition (RSI now 64.64, i.e., below overbought 70 line). I saw an article today by Clive Maund which credited unrest/potential war in Ukraine, Hong Kong, & the Middle East with sending investors, especially non-US investors, into the US dollar. In other words, it's a flight to safety. Add momentum following hedge funds to that and he's likely correct.
Dollar's stumble was health & well-being to the yen & euro. Euro found a ladder and climbed 1.14% to $1.2657. This means little until the Euro crosses that 20 DMA (now $1.2797), but it did carry the euro up out of oversold territory. Yen rallied Wednesday & Thursday, crashed Friday, then bounced back today, up 0.92% to 91.95. Clearly above oversold.
Ten year treasury note yield fell along with the dollar, and has sunk below its 50 day moving average. Suddenly all the certainty that Mother Yellum "must" raise interest rates evaporated.
All the stock indices I watch stumbled today: Nasdaq, N-100, Russell 200, Wilshire 5000, Dow, S&P500. Ain't that what they call "across the board"? Dow lost 17.78 (0.1%), not much but enough to crack the 17,000 level upon which investor moral hangeth. S&P500 lost 3.08 (0.16%) to 1,964.82.
Owch. Dow reached up and punched its 20 DMA today, but fell back. S&P500 didn't do that well and ended below its FIFTY day moving average. Durn! Did I forget to remind y'all the Dow is trading BELOW its uptrend line from March 2009? I did, didn't I.
Dow in gold jerked back Friday's gains and fell to 14.07 (G$290.85 gold dollars). That's below the previous (19 September) high at 14.20 oz (G$293.54). Looks like that and Friday have left a double top, but that will not be confirmed until the DiG again closes below its 20 DMA, now 13.95 oz (G$288.37).
Too early to declare certainly, but that 19 September peak in stocks may have been the Big One.
Dow in Silver has also left a double peak, 30 September at S$1,298.86 silver dollars (1,004.59 troy ounces) & 3 October at S$1,305.57 (1,009.78 oz.). Today the DiS lost S$38.23 (29.57 oz or 2.93%) & ended at S$1,267.34 (980.21 oz). Needs to fall through the 20 DMA at S$1,231.35 (952.37 oz) to confirm reversal, but presumption already lies with gravity.
Gold sprang up $14.50 (1.19%) to $1,206.70. I'll fret & fume about the ambiguity of that close in a second. Silver rose 40 cents (2.4%) to 1718 cents.
Both planted the clear first half of a key reversal, viz., a break into new low ground with a higher close for the day. That first half is useless & a liar unless followed by the 2nd half, a higher close tomorrow. Third day's higher close offers more proof still.
Look at the changes inside silver & gold. Silver came out of an oversold fever that began 10 September. Other indicators have turned up. The downtrend line from they end-August high lies above at 1765, and silver's high today reached 1736c. If fuelled by short-covering, silver could o'erleap that tomorrow. As yet this turn is no more than a small cloud on the horizon, but it has all the elements of a turnaround -- except confirmation, which only tomorrow can give.
Zut alors! Donnerwetter! Gold's low today -- really over the weekend -- came at $1,183.30, pennies above the June & December 2013 low. Observe that the ever-more-volatile silver cracked those lows (1860c) while gold has not. That would be typical behavior, with silver always weaker on the downswing but often outpacing gold on the upswing.
The ratio confirmed that by gapping down today. It has painted a classic complete gapped movement with breakaway gap, exhaustion gap, island top, and gap down from the island. Look at http://scharts.co/1vJvVmb That argues that the recent highs in the ratio also mark the lows in silver & gold.
THAT ALSO IMPLIES THAT IF YOU WANT TO SWAP GOLD FOR SILVER, YOU HAVE YOUR SIGNAL TO DO IT FAST.
What next? Gold must close -- not tomorrow, but soon -- above $1,225, then $1,237. then $1,237. $1,300 is the first big goal.
Silver needs to climb above 1800c, then 1875 where it fell down. In the aftermarket silver was trading at 736c, 18 cents above its close, a sign that shorts are covering. Platinum and palladium also shot up.
Call me a nat'ral born durned fool from Tennessee, but I bought silver & gold today. I'll buy more if it keeps rising, though I am careful to note that it must keep rising or gainsay today's signal.
On 6 October 1781 Americans & their French allies began a siege of the British under Cornwallis at Yorktown. Thanks to the French fleet, that siege would eventually defeat the British and win the American Revolution for the colonists. Only a year earlier, after warfare for four years, did Southerners on 7 October 1780 win the key victory at Kings Mountain that began deflecting the British northward. That was followed by the American victory at Cowpens, South Carolina in January 1781.
Y'all think about it. The Americans only won the battle of Kings Mountain because the British Col. Ferguson made the deadly mistake of picking a fight with the Scotch-Irish, notably the Over The Mountain Men in Tennessee. They mustered in and slaughtered Ferguson and his Tory troops. So, it would not be an exaggeration to say that Tennesseans actually won the American Revolution for all y'all.
It's okay. We don't want no prizes, no pay. Just leave us alone, that's all.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger