The Moneychanger
Weekly Commentary
Friday, 17 October a.d. 2014 Browse the commentary archive
Here's the weekly scorecard:
  10-Oct-14 17-Oct-14 Change % Change
Silver, cents/oz. 1,725.20 1,728.20 3.00 0.2
Gold, dollars/oz. 1,221.00 1,238.30 17.30 1.4
Gold/silver ratio 70.774 71.653 0.878 1.2
Silver/gold ratio 0.0141 0.0140 -0.0002 -1.2
Dow in Gold Dollars (DIG$) 280.10 273.45 -6.65 -2.4
Dow in gold ounces 13.55 13.23 -0.32 -2.4
Dow in Silver ounces 958.97 947.83 -11.14 -1.2
Dow Industrials 16,544.10 16,380.41 -163.69 -1.0
S&P500 1,906.13 1,886.76 -19.37 -1.0
US dollar index 86.06 85.29 -0.77 -0.9
Platinum 1,261.10 1,262.00 0.90 0.1
Palladium 784.20 755.85 -28.35 -3.6

Not a great week for stocks, but "a friend" or investors came in buying today to undo a modicum of the damage. US dollar index took a big hit. Silver was flat, gold climbed over two crucial resistance levels, and the platinum metals posted a sorry week.

To back up my claim that as soon as the stock market scares them, the Fed will begin again puking out new Quantitative Easing like a 14 year old beer drinker, I point to statements yesterday by the head of the St. Louis Federal Reserve, one James Bullard. In comments on Bloomberg TV he said that he thinks "a reasonable response by the Fed in this situation would be to . . . Pause on the taper at this juncture, & wait until we see how the data shakes out in December."

Two days earlier San Francisco Fed President John Williams told Reuters, "If we get a sustained, disinflationary forecast . . Thing I think moving back to additional asset purchases in a situation like that should be something we seriously consider."

Pray, y'all, don't be naïve. These apparatchiki NEVER make public statements like this unless told to. This is the famous "jawboning" where they try to TALK markets up or down. Bullard's statement came one day after the S&P500 hit 1820.66, down 10% from the September 2,019.26 high. Were you a fly on the wall in Fed-ville, you would have heard a conversation in which Mother Janet or the others said, "We'll let it fall 10%, then we'll start jawboning."

Alas, poor central banking criminals! The flood of a turning market waxeth so strong, its waves rise so high, that it overflows & washes away whatever feckless dikes they build. They might slow the flood slightly, but they cannot stop its covering the market.

Lesson? Whatever their jawboning tries to convince you to do, DO THE OPPOSITE.

Today the Dow rose 263.17 or 1.63% to 16,380.41 while the S&P500 chugged right alongside, adding 24 points (1.29%) to 1,8876.76.

Y'all know that the media throw around big numbers -- like today's stock gains -- to impress your little hick minds, 'cause you ain't from NewYawkSiddy so you'll believe anything. But they ain't used to dealin' with no nat'ral born durned fool from Tennessee, who don't even believe a quarter unless he bites it. So I went and looked at them Dow & S&P500 charts, & LO! And behold! Gains yesterday & today left both the Dow & the S&P500 BELOW (as in, "underneath") their 200 day moving averages. So the patient's temperature has really come down, but it's still 108 degrees.

I've checked most stock indices in the US and abroad, & all are below their 200 DMAs and below their last lows. This is a confirmed downtrend, globally.

Dow in Gold jigged up today, but changeth not the trend. Closed at G$273.49 gold dollars (13.23 oz), having crashed from its G$295.19 (14.28) peak on 3 October. DiG has bounced off its 200 DMA (G$267.29 or 12.93 oz), but breaking down through that will be its next definitive step. Chart is here,

Dow in silver has also plunged, from a peak at S$1,305.57 silver dollars (1,009.78 oz) to (S$1,200.72 (928.68 oz) today. It is below the 20 DMA, has cracked the upper boundary line it overthrew in September, and is hovering above the 50 DMA. Trend has reversed.

Remember that I watch the Dow in Silver & Dow in Gold because they pinpoint not only highs in stocks but also lows in the metals.

The US Dollar gained 26 basis points today (0.31%) to 85.29. It has established a downtrend that will run into the former Uptrend line about 84, where the 50 DMA also awaits. No change, trend abideth earthward.

Dollar's break has occasioned rallies in the euro and yen, albeit lazy ones. Euro lost 0.38% today to end the day and week at $1.2760, but it should move higher. Yen has backed off the last two days, lost 0.51% today, and closed at 93.57 cents/Y100. Working its way higher.

Turmoil in the bond markets this week as investors spooked out of junk bonds & crowded into US government treasuries. (Imagine that: considering US government debt as a "safe haven," after they have defaulted at least three times in the last 200 years.) 10 year treasury yield recovered some yesterday and today, but only to 2.199%.

Silver lost 10.6 cents today to 1728.2 and Gold closed Comex down $2.20 at $1,238.30.

Silver has formed what looks like/resembles an upside down head and shoulders reversal pattern with a neckline at 1800c. Silver has walked through its downtrend line and through its 20 DMA, but that's not enough. Speed will really pick up when silver cuts through 1800c. Real test comes at last breakdown point, namely, 1860c. Here's a picture,

GOLD has painted a kind of V bottom, and conquered resistance at $1,225 and $1,237. So far, so good. All indicators still point toward outer space, but gold must pierce $1,260 and then $1,296. Here's the chart,

Both silver & gold have five day charts that show "ceilings" at 1760c and $1,245. Once through those ceilings, they'll run. If the Fed gets busy jawboning stocks up next week, that might put a little headwind against gold, but the charts still persuade me that silver & gold ended their three year correction with the bottoms on 3 October 2014.

I have been buying silver and gold since then, and will buy more as it rises through every resistance level.

On 17 October 1780 Lord Cornwallis surrendered to the American forces at Yorktown.

Y'all enjoy your weekend!

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
17-Oct-14 Price Change % Change
Gold, $/oz 1,238.30 -2.20 -0.2
Silver, $/oz 17.28 -0.11 -0.6
Gold/Silver Ratio 71.653 -0.123 -0.2
Silver/Gold Ratio 0.0140 -0.0001 -0.6
Platinum 1,262.00 9.60 0.8
Palladium 755.85 10.70 1.4
S&P 500 1,886.76 24.00 1.3
Dow 16,380.41 263.17 1.6
Dow in GOLD $s 273.45 4.90 1.8
Dow in GOLD oz 13.23 0.24 1.8
Dow in SILVER oz 947.83 20.91 2.3
US Dollar Index 85.29 0.26 0.3
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: 1,237.80      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,269.98 1,281.12 1,281.12
1/2 AE 0.50 636.95 652.94 1,305.88
1/4 AE 0.25 318.48 332.66 1,330.64
1/10 AE 0.10 129.86 135.54 1,355.39
Aust. 100 corona 0.98 1,206.01 1,218.01 1,242.62
British sovereign 0.24 293.13 305.13 1,296.20
French 20 franc 0.19 232.83 235.90 1,263.51
Krugerrand 1.00 1,252.65 1,262.65 1,262.65
Maple Leaf 1.00 1,252.80 1,267.80 1,267.80
1/2 Maple Leaf 0.50 711.74 649.85 1,299.69
1/4 Maple Leaf 0.25 315.64 331.11 1,324.45
1/10 Maple Leaf 0.10 131.21 134.92 1,349.20
Mexican 50 peso 1.21 1,481.85 1,505.85 1,248.94
.9999 bar 1.00 1,242.13 1,253.80 1,253.80
SPOT SILVER: 17.22      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 24.00 27.00 35.29
VG+ Peace dollar 0.77 19.00 22.50 29.41
90% silver coin bags 0.72 12,669.80 12,955.80 18.12
US 40% silver 1/2s 0.30 4,888.15 5,038.15 17.08
100 oz .999 bar 100.00 1,712.00 1,772.00 17.72
10 oz .999 bar 10.00 177.20 178.20 17.82
1 oz .999 round 1.00 17.32 17.82 17.82
Am Eagle, 200 oz Min 1.00 18.97 20.22 20.22
SPOT PLATINUM: 1,262.00      
Platinum Platypus 1.00 1,287.00 1,327.00 1,327.00
Home Questions & Answers Articles & Resources
The Moneychanger, P.O. Box 178, Westpoint, TN 38486

Copyright Notice

© 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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

For complete details on how to buy from us or sell to us, please click here.