The Moneychanger
Daily Commentary
Wednesday, 18 March a.d. 2015 Browse the commentary archive

For one of the most ridiculous market charts in world history, go to www.nasdaq.com and click on "DJIA." Market is underwater until moments before the FOMC's announcement, then shoots up over 220 points. Looks like a chart from a movie I saw one time, "The Three Stooges Visit Wall Street."

Bottom line of the Fed's announcement was that it would raise rates, but not before June, and maybe not until September. Stock market interpreted this as "Pour more PGA in the punch bowl" so stocks shot up. Dollar index interpreted this as "Dollar interest rate not going higher soon," & so shot down. Bond prices took it as "Lower interest rates for a while" and so yields shot up while prices shot down (they always move opposite to each other. It's mathematical." Dollar sank, so silver & gold shot up.

Daddurn! There was a lotta shootin' goin' on!

Listen to me: this is dumb, dumb, dumb. This is not investing, not an economy, not even a casino, unless it would be a rigged casino. The end of this is grief, wailing, weeping, & gnashing of teeth. When things don't make sense, it's usually because -- they don't make sense.

At today's low the Dow stood at 17,697.52, 378.67 points LOWER than 18,076.19 where it closed. That was a rally -- all after 2:00 p.m. -- that took the Dow up today 227.11 or 1.27%. S&P500 rose 25.22 or 1.22% to 2,099.50

Gold rose, too, but later in the day but weren't as manic as stocks. Dow in Gold closed at G$324.55 gold dollars (15.70 troy ounces). Silver poked thru the upper gator jaw to S$1,503.84 silver dollars (1,163.13 troy ounces). Either this rise will end soon, or it will invalidate the gator jaws. Y'all know what I expect.

US dollar Index fell off a cliff, down, down, down 185 basis points (1.85%) a huge move. That should begin a correction of at least a couple of weeks, but gives no sign yet it will do more than routinely correct. Clearly, the Fed wants the dollar lower and today was the first shot of the jawbone in talking it down.

The moribund euro -- clumsy, hapless oaf of scrofulous fiat currencies -- shot up out of its sub-cellar dungeon and actually closed up 2.52% at $108.63. That was not enough to clear the downtrend line or the 20 DMA, but it did punch into the 20 DMA before selling much lower. Probably hath turned cloudward for a while.

Yen gained 1.04% to 83.28. Above 20 DMA, rangebound. BoJ probably likes it that way.

Bond prices rose sharply, pulling yields down. US 10 year treasury note yield lost 5.2% to 1.951%. Below 50 DMA. Oooooo.

West Texas Intermediate Crude jumped a meaty 9.955 to close at $46.65/barrel. Working on a bottom.

If I tell y'all gold & silver's closes, y'all will think nothing happened today, but that's because the Comex closes trading in them at 1:30 Eastern. Thus they closed virtually unchanged, silver down 3.7 cents to 1552.5c & gold up $3.10 to 1,151.40.

But lo & behold, came the FOMC announcement and both -- I won't say it again -- rocketed. Gold ended the day at $1,168.70, up 1.8% or $20.40 from yesterday's Comex close. Siler ended at 1602c, up 45.8 cents or 2.9% from yesterday's Comex.

Gold shot away from that shoulder support line & toward its upper downtrend channel line. It has certainly turned around for a while, but that turnaround must pass the test Gold failed in January at $1,308. Today turned up most momentum and trend indicators.

Gold silver ratio ended at 74.08, lower but not yet ideal.

Siler ricocheted from the bottom of that falling wedge to the top side, but didn't quite break through. Looks stronger than gold, & both silver & gold should continue higher tomorrow. Silver's re-test comes at January's 1850c high.

Big news today is a new report that links long breastfeeding to higher IQ and even higher income. Study followed children all the way to age 30.

Wow. You wonder how our supposedly "scientific" age can get it so wrong so long, except that when you know that corporate profits are behind it you no longer wonder. NOTHING could be better for a human baby than a human mother's milk, and that speaks only of nutrition for genetic potential, and not of the importance of cuddling & kissing and loving on that baby. Yet millions of American mothers were guilt-manipulated into bottle feeding, and millions more poor 3rd world mothers. Worse yet, on substitute, soy milk, contains phytoestrogens that suppress baby boys' sexual development.

Any cattle husbandman from 50 years ago or today on the cutting edge of the New Agriculture (low on inputs, high on nature) could have told you. You want mama cows with HIGH milk fat content and high milk output so that calf gets the food he needs to maximize his genetic potential. You may be a beef farmer, but underneath it all you're a dairyman. And that calf needs to STAY on that mama as long as possible to maximize that first growth. Humans are not bovines, but they are mammals, with the same needs.

I thank God for science and the advances in human health & prosperity in the last 100 years, but I have no time at all for Junk Science that promotes political agendas or corporate profits or fancies itself wiser than creation & the Creator.

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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
18-Mar-15 Price Change % Change
Gold, $/oz 1,151.40 3.10 0.27%
Silver, $/oz 15.53 -0.04 -0.24%
Gold/Silver Ratio 74.164 0.376 0.51%
Silver/Gold Ratio 0.0135 -0.0001 -0.51%
Platinum 1,093.60 -1.10 -0.10%
Palladium 764.30 -2.50 -0.33%
S&P 500 2,099.50 25.22 1.22%
Dow 18,076.19 227.11 1.27%
Dow in GOLD $s 324.53 3.21 1.00%
Dow in GOLD oz 15.70 0.16 1.00%
Dow in SILVER oz 1,164.33 17.36 1.51%
US Dollar Index 98.10 -1.85 -1.85%
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: 1,173.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,207.22 1,214.26 1,214.26
1/2 AE 0.50 603.68 618.86 1,237.73
1/4 AE 0.25 301.84 315.30 1,261.19
1/10 AE 0.10 123.08 128.47 1,284.65
Aust. 100 corona 0.98 1,140.77 1,149.77 1,173.00
British sovereign 0.24 278.24 283.24 1,203.24
French 20 franc 0.19 220.68 224.68 1,203.42
Krugerrand 1.00 1,189.62 1,199.62 1,199.62
Maple Leaf 1.00 1,181.20 1,198.20 1,198.20
1/2 Maple Leaf 0.50 674.59 615.93 1,231.86
1/4 Maple Leaf 0.25 299.17 313.83 1,255.32
1/10 Maple Leaf 0.10 124.36 127.88 1,278.79
Mexican 50 peso 1.21 1,404.51 1,415.51 1,174.01
.9999 bar 1.00 1,177.31 1,189.20 1,189.20
SPOT SILVER: 16.07      
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 12,237.23 12,594.73 17.62
US 40% silver 1/2s 0.30 4,547.43 4,697.43 15.92
100 oz .999 bar 100.00 1,596.50 1,656.50 16.57
10 oz .999 bar 10.00 165.65 166.65 16.67
1 oz .999 round 1.00 16.17 16.67 16.67
Am Eagle, 200 oz Min 1.00 17.57 18.37 18.37
SPOT PLATINUM: 1,093.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,108.60 1,138.60 1,138.60
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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

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