The Moneychanger
Daily Commentary
Tuesday, 9 December a.d. 2014 Browse the commentary archive

A few weeks ago my friend, Catherine Austin Fitts, mentioned that she had begun taking blue-green algae (aphanasomenon flos-acquae) for mental sharpness & energy. She recommended thirty caps a day, but I can only gag down 15 -- five three times a day. I used to take this stuff 30 years ago, & remembered it did seem to sharpen my edge. I started taking it again. Takes three or four weeks to begin working, and requires a large dose. It really works for me. Whoa! Remember I am no physician or nutritionist, only a nat'ral born durned fool from Tennessee. It might not work for you, & might make you as sick as a dog eating peaches. Brand I've been using is American Health/Klamath Shores Blue-Green Algae, but numerous companies off it. The algae must come from Oregon, but ask me not why.

I make it a point not to trot out Conspiracy to explain every change in markets, not only because I don't believe the Money Interest (as the 19th century used to call them) controls everything like God, nor do I believe they manipulate any more than they need to for their goals, nor do I believe they can drive markets opposite their primary trend for long.

BUT SOMETIMES the Invisible Hand (& that ain't Adam Smith's) is so heavy & obvious that I have to say something. Today was one of those days in the stock market. It hadn't been open more than two or three nanoseconds when it sank 222.91 points or 1.25%. Then -- mirabile dictu! Deus ex machina! NGM! -- it started rising and closed the day down only 51.28 (0.29%). Ask me if I believe in the Easter Bunny. Sure, sure, he was laying eggs all over this one. After an early low at 2,034.17, the S&P500 closed down only 0.49 (0.02%) at 2,059.82.

Nevertheless, both indices cut deeply through their 20 DMAs, although they closed above them. 'Twon't do no good: market is broken. Momentum is dirtward, and momentum will win. Internally stocks have been deteriorating for some time, now it's showing. Rest of this year will be bloody.

Merciful heavens! Look at the Dow in Silver & Dow in Gold!

Here's the Dow in Gold chart, Today it broke down out of the broadening top formation & sank toward its 50 DMA (G$296.43 or 14.34 oz). DiG broke G$300 today & lost 2.58% (whoa!) to G$298.71 (14.45 oz).

Dow in Silver chart is here, Like the DiG, Dow in silver broke the bottom boundary of its megaphone pattern, and even punched through its 50 dma (S$1,343.42 or 1,039.05 oz), plunging 4.7% to S$1,343.28 (1,038.94 oz).

Till y'all are sick of hearing it I'll keep telling you, this is the most important indicator I watch, because it reveals the primary trend of stocks against silver & gold. We will get final confirmation of a turn when both indicators fall through their 200 DMAs at G$274.31 (13.27 oz) and S$1,153.24 (891.96 oz).

Meanwhile the mighty US dollar index, tick on national prosperity, fat leech of economic swamps, tumbled 0.48% or 43 basis points to 88.72. Here's a link to that rising wedge (green lines) I've been talking about, In today's trading the dollar punched through the bottom boundary of that rising wedge in a kind of preliminary breakdown. It hit the 20 DMA (88.21) and bounced up, closing barely within the wedge. Dollars tomorrow will be cheaper than dollars today.

The euro gapped up and hit its 20 DMA above & the top boundary of the falling wedge pattern, but then sank back to $1.2373, a gain of 0.45%. When the dollar breaks down, it will break upward.

Yen showed unexpected signs of life, gapping up & touching the 20 DMA ended up 0.88% to 83.61 cents/Y100.

Silver & gold exploded today Gold shot up $36.80 (3%) to $1,231.50 while silver rose an open-mouthed 86.5 cents, 5-1/3%!

News reports claimed that gold was jumping because declines in stock market were sending investors into gold as a safe haven. Mmmm. Why didn't that happen in October, then?

No, there's something weightier here, a change in sentiment, waning confidence in financial assets and markets. If that's what we're seeing, my, gold and silver will jump sure enough.

Gold smashed through all the resistance from $1,200 to $1,205, then crashed through $1,218-$1,225, and never stopped until it hit $1,239. This slammed gold's nose plumb up against its upper channel boundary, so it might back off tomorrow, unless stocks dive again. The real test coming up is a that last high, $1,255.60.

Rule is that you buy the breakouts -- at least, the convincing ones, and this one convinces me. If gold breaks above $1,255.60, then it will be time to buy more. Up above at $1,350 is the Fish or Cut Bait Line.

To early to say with certainty that we have seen the lows, but as a working theory, that'll do.

Silver just SMASHED the chart. Cut through the overhead downtrend line like it wasn't even there and jumped to a 1723c high. Silver backed off a little, and closed at 1708.1, but that's WAAAY above resistance & the 50 DMA. Chart is here,

Buy the breakouts. Yes, there's a chance this will play out, but for right now I have to say, buy the breakouts.

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
9-Dec-14 Price Change % Change
Gold, $/oz 1,281.50 36.80 2.96%
Silver, $/oz 17.08 0.87 5.33%
Gold/Silver Ratio 75.025 -1.733 -2.26%
Silver/Gold Ratio 0.0133 0.0003 2.31%
Platinum 1,246.30 9.90 0.80%
Palladium 812.10 -4.90 -0.60%
S&P 500 2,059.82 -0.49 -0.02%
Dow 17,801.20 -51.28 -0.29%
Dow in GOLD $s 287.15 -9.34 -3.15%
Dow in GOLD oz 13.89 -0.45 -3.15%
Dow in SILVER oz 1,042.16 -58.75 -5.34%
US Dollar Index 88.72 -0.00 -0.01%
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: 1,229.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,263.11 1,272.95 1,272.95
1/2 AE 0.50 632.88 648.77 1,297.54
1/4 AE 0.25 316.44 330.54 1,322.14
1/10 AE 0.10 129.03 134.67 1,346.74
Aust. 100 corona 0.98 1,194.70 1,206.70 1,231.07
British sovereign 0.24 291.26 303.26 1,288.26
French 20 franc 0.19 231.34 234.42 1,255.61
Krugerrand 1.00 1,247.12 1,257.12 1,257.12
Maple Leaf 1.00 1,244.90 1,259.90 1,259.90
1/2 Maple Leaf 0.50 707.19 645.70 1,291.40
1/4 Maple Leaf 0.25 313.62 329.00 1,315.99
1/10 Maple Leaf 0.10 130.37 134.06 1,340.59
Mexican 50 peso 1.21 1,475.35 1,499.35 1,243.55
.9999 bar 1.00 1,234.20 1,245.90 1,245.90
SPOT SILVER: 17.02      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.75 26.50 34.64
VG+ Peace dollar 0.77 18.50 22.00 28.76
90% silver coin bags 0.72 13,241.80 13,599.30 19.02
US 40% silver 1/2s 0.30 4,829.15 4,979.15 16.88
100 oz .999 bar 100.00 1,692.00 1,752.00 17.52
10 oz .999 bar 10.00 175.20 176.20 17.62
1 oz .999 round 1.00 17.12 17.67 17.67
Am Eagle, 200 oz Min 1.00 18.77 19.77 19.77
SPOT PLATINUM: 1,246.30      
Plat. Platypus 1.00 1,271.30 1,311.30 1,311.30
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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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