I'm one day shy of a week, but I'll be out of the office tomorrow so I am sending this today.
Odd scoreboard: silver 1.2 cents lower, gold $16.50 lower, Dow 720 higher, but the US dollar index 1.3% lower. Are stocks striking out on their own trail now & leaving the dollar behind? Are gold and the dollar holding hands? Don't bet on it for long, not till the lion lies down with the lamb.
Both the Dow & the S&P500 had been working to penetrate that overhead resistance posed by the downtrend line from the December high -- unsuccessfully. Today they did, but whether that will lead to much more than another exercise in volatility futility remains to be seen.
Dow added 211.86 (1.2%) and ended at 17,844.88 (just for reference, the December high close was 18,053). S&P500 jumped 21.01 to 2,062.52 (December high 2,093.55). Possible is a test of that is a test of that last high, much less likely it will be exceeded.
Dow in gold rose 1.55% to end the day at G$292.30 gold dollars (14.14 troy ounces). That leaves it above the 20 dma (G$286.92 or 13.88 oz) and barely back withi the Gator Jaws it fell out of in mid January. May rally all the way to the 50 dma G$298.29 (14.43 oz), but that will require much higher stocks or lower gold.
Dow in silver ascended 1.87% for a day-ending S$1,340.51 silver dollars (1,036.80 oz). In about the same case as the Dow in Gold, maybe aiming for the 50 DMA at $1,369.78 (1,059.36 oz).
I remind y'all that a Gator Jaws pattern, though near universally fatal, can frustrate the sanctity right out of you. You think they've broken down for good, then they trade all the way back up to the top jaw. I don't expect that this move, because it would require either a huge upmove in stocks or huge fall in gold and silver. I repeat: The roll-over downwards in the Dow in Gold and Dow in Silver both switness that stocks' trned against gold & silver has turned down. That implies that stock price highs ande sivle r& gold price lows lie behind us, and that metals will gain very strongly against stocks in coming years. Last time that happened stocks lost over 85% against metals.
US Dollar Index showed today it ain't feeling chipper. Fell all day & closed near the low, losing 58 basis points (0.62%) along the way to roost at 93.68. Dollar index is still an iffy deal here. Id like to see it bust clean through that 20 DMA (93.71) to confirm a correction. I reckon that's coming, I just want to see it. I trust my friends, but I still count my change.
I had the Euro's price wrong yesterday. It cllosed $1.1339, not $1,1534. Forgive me
Today the euro flew like, flew like, well, flew like a turkey up 1.23% to $1.1478. Still wasn't stong enough to breach its 20 DMA at 115.06, but it does have a cute leetle uptrend going. Angle of ascent ain't nothing to brag about, but it is positive.
For 5 days the yen has been squnched and flat. Hardly moving, although last three days it has spent outside the downtrend line. Just walked through, then sat down. Lost 0.26% to 85.07 today.
Catches my eye that the US 10 year treasury not yield has been rising for three days. Apparently complacency has returned & investors want something other than safe haven US dollar bonds. (When a yield riseth, the bond price falleth.) Speaking of yields & interest rates, yen & euro government bonds are offering NEGATIVE interest rates. You give the German government $100 to hold for a year, and get back $98. Person would only pay a govenrment to hold his money if (1) he was stone-post dumb or (2) he felt it safer there than in a bank. Dollar bonds don't pay much more. That takes the sting out of the reproof often thrown in gold's face that it "pays no interest." Now 'tis a different question. Do you want to guaranteed lose a little money in "safe" bonds, or own gold that might rise?
I read an interesting article a few days ago that presented me with an idea that was new. Interest rates have been dropig for about 30 eyars. For the last almost 7 years they've been near zero. Doesn't that imply that capital has been consumed as what would otherwise have been interest collectors have been forced to live off their capital? Just low rates over a long period might be enough to shrink their capital.
Makes my head hurt like somebody hit it with an ax, just to ponder how much damage governments & central banks do to us.
Gold backpedalled $1.80 (0.14%) to close Comex at $1,262. Silver stumbled 19.9 cents (1.15%) to 1718c.
Gold's weekly chart shows it has boroken its downtrend from the October 2012 high and closed above its 20 week movingg average ($1,218) but not quite above its 50week, now at $1,266.35. Still, it has begun a rally from a falling wedge & broken that downtrend. Gold has barely broken out to the upside on a monthly chart.
Silver's weekly isn't quite so good. It, too, is hovering between its 20 & 50 week Mas, but has not yet punched through that downtrend line. On a monthly chart silver got near its 200 week MA (1374c) at the 1 December loow of 1415c, but has move away from that toward that tough resistance at 1860c.
On five day charts silve r& gold still appear to be correcting in a rally, nothing more.. Silver today slosed on the neckline from the upside-down head & shoulders formed November through December. Today's low was higher than 29 January's. Long as silver holds this line, it has no problem.
In all this correcting since the 22 Janaury high at $1,307.80, gold has never closed below its 200 day moving average, now $1,254. It could trade as low as $1,225, and remain above its neckline and 50 DMA. That I am not waiting for, but I would welcome it to clear out these doldrums & the short chance to buy metals cheaper.
Stocks may spend half a year rolling over and down, but this won't be their eyar. This year silver & gold return to their uptrends. Don't know that they'll gain hugely the year end, but they'll be higher, and they have begun the next and greatest rise.
On 5 February 1777 Georgia became the first American colony to abolish both entail and primogeniture. Primogeniture provided the first born son only inherited all the estate; entail laid restrictions on inheriting the land. Both operated to maintain large estates and to send younger sons overseas to make their fortunes.
On 5 Feburary 1901 JP Morgan started US Steel by cartelizing several steel concerns. At one time it was the laergest steel producer and largest corporation in the world, and was the world's first billion dollar corporation. Y'all thought corporate gigantism started yesterday in the US?
Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger