Well, I feel better today. After all, ain't none of us getting out of here alive, so we might as well enjoy it while we're here. Also, I got to thinking about that silver & gold & it may not look so hopeless after all.
US dollar index, measure of the ineffable because immaterial value of the US dollar against other immaterial currencies, "fell" today 25 basis point (0.29%) to 87.16. That does nothing to disturb the working technical hypothesis that it's going higher.
Did y'all ever wonder what would happen if we all stopped pretending the US dollar had value?
Euro rose 0.51% to $1.2546, but don't know no more about rallying than a cat knows about integral calculus. Judging from now, euro'll be lucky if it don't fall below $1.00. But the euro ain't near about as sick at the yen. It rose 0.28% today to 88.02 cents/Y100. Since its high on 15 October, the yen has lost 7.4% to its lowest level since January 2008. Nothing to catch it above 80.55.
Stocks slept again today. Dow added 17.6 (0.1%) to 17,383.84 but the S&P500 lost 5.71 (0.28%) to 2,012.10. They will rise further. The Fed by extending this artificial rally has only guaranteed the eventual decline will be more catastrophic.
Dow in Gold skootched down 0.14% to G$307.60 gold dollars (14.88 oz). It's nearly as overbought as it has been at any time in the last five years. The MACD is high, rate of change enormous, and stochastics ready to turn down. It is beginning to appear that its next big move will be down, not up.
Dow in silver rose 0.82% to end the day at S$1,403.87 silver dollars or 1,085.81 troy ounces. Everything I said about the Dow in Gold goes for the Dow in Silver, only more so.
Sounds nuts, but we may look back here and ask, "Why in the world couldn't we see that was a bottom?"
Comex gold lost $2.00 (0.17%) to $1.167.40; silver lost 24.8 cents (1.5%) to 1592.7 cents.
Before I launch in to hopeful signs for metals, here's a little explanation.
Bollinger Bands are a technical indicator that measure a market's volatility. The lines are marked usually at one standard deviation on either side of a moving average. (Standard deviation measures variability, leave it at that.) In a normal distribution of readings, 68% of all readings fall within two standard deviations of an average, plus or minus. So if Bollinger Bands cover two standard deviations around a moving average, they should contain about 2/3 of all possible readings (or prices, in this case).
Hence the Bollinger Bands' value as a technical indicator: Whenever a market leaps outside those bounds, it is surpassingly low or surpassingly high.
An article today brought to my attention today gold's performance against its Bollinger Bands: day before yesterday it punched out the bottom. Even if you expand the BB to four standard deviations, which covers 95% of what you expect to see, it just about touched that.
First point is, that makes gold way oversold.
Second point is, that when gold punches that line, it usually turns around in a few days.
Let's pile up a third point. The RSI is monstrously oversold & the full stochastic is turning up. And volume has dried up on the downside moves.
Don't misunderstand me. There are signs gold is about to turn up, but even if it rises, it might merely stage a corrective rally, then drop more. We have to see yet what gold makes out of any rally.
To this picture silver adds dropping downside volume and an oversold RSI. More, that premium on US 90% silver coin keeps rising, a harbinger of higher silver prices.
But whenever the last bottom comes, it draweth nigh, I believe.
On 4 and 5 November 1864 Confederate Major General Nathan Bedford Forrest capped a 23 day raid through West Tennessee by attacking the huge Union supply base at Johnsonville. On 29 & 30 October by artillery fire he captured three steamers and a Union gunboat. He repaired the boats to use attacking Johnsonville. Forrest later lost the boats but established artillery positions on the Tennessee River so strong that no Union gunboats could reach and rescue Johnsonville.
Forrest positioned artillery across the river. At one point in the battle he got so excited he shouted, "Elevate that gun lower!" His men understood him, though. Forrest's artillery commander, Captain John Morton, was so effective that the wharves for nearly a mile up and downriver were one solid sheet of flame.
At a cost of only 2 killed and 9 wounded, Forrest cost the Union 4 gunboats, 14 transports, 20 barges, 26 pieces of artillery, and 150 prisoners. A union officer estimated the destroyed supplies' value at $2,200,000, or at then-current gold prices, about 106,425 ounces of gold. At today's prices, that's $124,251,187.50.
You can visit the Nathan Bedford Forrest State Park today and see where Forrest's artillery was emplaced.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger