The Moneychanger
Daily Commentary
Monday, 2 March a.d. 2015 Browse the commentary archive

Yankee government did me in again today. Took Susan to Nashville to see her heart doctor. Had lunch on the west side with friends, so since we were near the Natchez Trace Parkway & it would get us home in 1-1/2 hours, I headed that way. Passed the Loveless Café and there was a "Road Closed" sign. What? Went around another way to the next entrance & it was closed, too. I had to wind around through Franklin & Thompson's Station got caught in school traffic & generally turned a 1-1/2 hour trip into nearer four. I was some kind of pleased.

That's why I live in the country. When trees fall across our gravel roads, we just reach in the back of the truck, pull out a chainsaw, & clear the road. That's the country way. Besides, you'd wait a month for the county to get around to it.

Somebody let the stock dogs off their leash today, & they just bought up everything in sight. Pushed the Nasdaq Composite over 5,000 for the first time since March 2000. That all time high that standeth yet was 5,048.62 on 10 March 2000. Lawsie me! Didn't the stock touts like to blow out their touters touting that Nasdaq!

Yes, but I don't believe 'em any more than Trojans believed Cassandra at Troy. It might be pointing out the exact opposite, here after a stock bull market has been raging (thanks to the central bank money fountain) since 2009. Might be making a prophetic double top. But I don't know Cassandra from Adam's off ox, & only Troy I ever been to is Troy, Alabama, on the way to Dothan.

Dow & S&P500 both made new highs. Dow climbed 155.93 (0.86%) to 18,288.63 and the S&P500 bumped up 12.89 (0.21%) to 2,117.39.

Y'all remember that I have been a disbeliever of this late stock market breakout? Applying the 3% rule, S&P needs to beat 2,153 and Dow 18,595 to exceed December highs by 3%.

Dow in gold jumped back up 1.5% to close at G$313.38 gold dollars (15.16 troy ounces), precisely where it closed on 23 February before it dove. Hasn't reached the top Gator Jaw yet. Might do.

Just to keep y'all balanced, Dow in Silver on 23 February closed at S$1,446.14 silver dollars (1,118.50 oz) ad today rose 1.91% for a close at S$1.441.38 (1,114.82 oz). Also has not yet reached that top Jaw.

What am I talking about? What's the significance of the top Gator Jaw? Gator Jaws are big broadening top patterns (megaphones). They usually resolve with frustrating sloth, but they are also very reliable. The gator jaws chew slow, but they chew exceeding fine, moving high & low across the pattern. To gainsay & invalidate this pattern, both would have to close more than 3% above the top gator jaw.

That ain't all. These indicators are "spreads" showing the performance of stocks against gold & silver. When they turn down, that will signal that the price downtrend in silver & gold as well as stocks' uptrend against metals have reversed. In other words, they gonna punch our ticket!

The US 10 year treasury note yield rose today (US treasury prices declined). Reuters reported that large corporate debt sales in advance of an anticipated interest rate boost by the Fed was pressuring prices. I reckon I can believe that, I just can't believe anyone would loan corporations money (buy their bonds) at this low rate. There's that nat'ral born durned fool from Tennessee talking again.

US dollar index rose 19 basis points (0.19%) to 95.51. I reckon I can now admit it has me bumfuzzled. Rose up out of a triangle against a fall which would have made more sense, but must better 95.85 before it confirms another upleg.

It's embarrassing to have to talk about the Yen & Euro. Euro fell another 0.11% to $1.1185 and is bumping at the very bottom of its range, like scrubbing a hole plumb through your bathtub. Yen fell to the bottom of its range, off 0.43% to 83.23.

Do y'all realize that if the world didn't have these scrofulous fiat currencies sucking on its neck like Dracula on a pretty girl, I wouldn't have anything to write about? And y'all could spend your time doing better things, like straightening up your sock drawer.

WTIC still refuses to break down. Rose 0.55% to $49.79/barrel.

Gold plumb disappointed me today, and silver. I went to bed after midnight last night & gold was at $1,223. High came at 2:00 a.m. Eastern time. Rest of the day gold steadily slid, except for a little rally from $1,214 to $1,220 between 8:00 & 9:30. Ended the Comex day $4.90 lower at $1,207.70. Silver lost 10.6 cents to 1640.7c.

On a longer term chart, gold today rose to new high territory for the move that began last week. High hit that neckline y'all are tired of hearing about. That also just happens to make the downtrend line from the January high.

Now, I can look at this one of two ways, and I ain't got no drankin' glasses & ain't one of 'em half full and one half empty. Gold's entitled to take a run & back off at tough resistance, as any market is, but if it don't push on through $1,225, it mightdrop & scare y'all.

Eye-catchingest thing in all this is the Gold/Silver Ratio chart. It just persists a-droppin', like it made its top in December and by golly, everybody ought to know it's gonna drop more from here. That's the behaviour that accompanies rising gold & silver prices.

Silver tried to punch through its downtrend line with a 1679c high, right where the 50 (1675c) and 20 (1674c) DMAs intertwined. Didn't make it. No damage done, but bad for morale. Can't keep doing this without risking a serious fall.

I thought about it over the weekend. I don't believe there is any more than $70 downside risk in gold, even after today's piddling performance. And the fact that nobody in creation is interested in gold adds to my conviction.

On 3 March 1836 the Republic of Texas declared its independence from Mexico.

On 3 March 1863 Lincoln signed the Conscription Act ordering US citizens to report for duty in his unconstitutional army or pay $300.00. Either in that law or later they could also hire substitutes, and Lincoln was also importing Irish and Germans who were shoved into the Army right off the boat.

Y'all think about this: without central banks & conscription laws, wars would be mighty short.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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Market Snapshot See more charts and market data
2-Mar-15 Price Change % Change
Gold, $/oz 1,207.70 -4.90 -0.40%
Silver, $/oz 16.41 -0.11 -0.64%
Gold/Silver Ratio 73.609 0.176 0.24%
Silver/Gold Ratio 0.0136 -0.0000 -0.24%
Platinum 1,191.00 4.30 0.36%
Palladium 830.30 11.85 1.45%
S&P 500 2,117.39 12.89 0.61%
Dow 18,288.63 155.93 0.86%
Dow in GOLD $s 313.04 3.92 1.27%
Dow in GOLD oz 15.14 0.19 1.27%
Dow in SILVER oz 1,114.68 16.60 1.51%
US Dollar Index 95.51 0.19 0.20%
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SPOT GOLD: 1,205.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,233.23 1,247.69 1,247.69
1/2 AE 0.50 620.32 635.90 1,271.80
1/4 AE 0.25 310.16 323.98 1,295.91
1/10 AE 0.10 126.47 132.00 1,320.02
Aust. 100 corona 0.98 1,172.18 1,181.18 1,205.04
British sovereign 0.24 285.90 290.90 1,235.78
French 20 franc 0.19 226.75 230.75 1,235.97
Krugerrand 1.00 1,221.17 1,231.17 1,231.17
Maple Leaf 1.00 1,213.50 1,230.50 1,230.50
1/2 Maple Leaf 0.50 693.16 632.89 1,265.78
1/4 Maple Leaf 0.25 307.40 322.47 1,289.89
1/10 Maple Leaf 0.10 127.78 131.40 1,314.00
Mexican 50 peso 1.21 1,443.18 1,454.18 1,206.09
.9999 bar 1.00 1,209.72 1,221.50 1,221.50
SPOT SILVER: 16.35      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 19.00 22.00 28.76
90% silver coin bags 0.72 12,441.00 12,798.50 17.90
US 40% silver 1/2s 0.30 4,631.50 4,781.50 16.21
100 oz .999 bar 100.00 1,625.00 1,685.00 16.85
10 oz .999 bar 10.00 168.50 169.50 16.95
1 oz .999 round 1.00 16.45 16.95 16.95
Am Eagle, 200 oz Min 1.00 17.85 18.65 18.65
SPOT PLATINUM: 1,191.00      
Plat. Platypus 1.00 1,206.00 1,236.00 1,236.00
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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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