The Moneychanger
Daily Commentary
Monday, 4 May a.d. 2015 Browse the commentary archive

Lo & behold! Gravity works.

Don't y'all forget this: gravity works. Markets always fall faster than they rise. One weak day can wipe out weeks of climbing. Count on it: gravity works. And when it starts working on the stock market here soon, it will prove once again that it works.

Speaking of stocks, that two day rally after the breakdown broke down again today. Stocks sank across the board: Nasdaq - 1.55%, N-100 - 1.63%, Russell 2000 -1.44%.

When markets close beneath their 20 day moving averages, they show their short term momentum is down -- just a mathematical fact, ma'am. Closing below the 50 DMA adds steam to the locomotive. Today both the S&P500 & Dow closed beneath their 20 & 50 DMAs -- cut thru 'em both in one swift slicing motion. It appears that yesterday's closes above the trend lines were vain, failing as those before them failed.

S&P 500 slipped 1.18% or 25.03 to 2,089.46. S&P500 skidded 142.2 (0.79% to 17,928.20. Now we have two failed breakouts followed by a breakdown, an attempt to recover, and yet another breakdown. These repeated failures & the volatility just seal the issue: they've topped. Cannot force their way higher.

Agreeing with that sentiment are the Dow in Gold & Dow in Silver. Today the Dow in Gold joined the Dow in Silver below its 50 & 20 DMAs, losing 1.28% to close at $310.70 gold dollars (15.03 troy ounces). Dow in Silver lost 1.86% & looks sicker still at S$1,398.15 silver dollars (1,081.38 tr oz).

US Dollar Index took puking sick again today. Appears the mere thought of climbing through that trendline gave it altitude sickness. Lost 39 basis points (0.41%) to 94.25. Watch 94.71, the last low. A close below that will open the flood gates for the cascade. By the way, the dollar index is trading back to the apex of the pennant or triangle it broke free from in March. That line, about 94.40, provides support -- until it is breached.

Folks seem awful timid buying euros. It rose 0.34% to $1.1186, but it's about as lazy and aimless a rally as you're likely to come across. Yen gained 0.24% to 83.45. Remains stuck in a tight range -- 84.30 - 82.25 -- that has reigned since February. There's no there there.

Oil means business. WTIC rose 2.34% to $60.40 today, over $60/barrel. Copper is rompin' & stompin', above its 200 DMA at $2.93, up 0.88%.

That interest rate rally is getting serious. Ten year Treasury yield punched into but did not close above its 200 DMA. Climbed 1.92% to 2.176%. Thirty year bond yield climbed 1.29%, jumping clean through the 200 DMA (2.868%) to close at 2.906%. Question now is, can it hold on there & keep rising? Remember that as bond yields rise, bond prices fall, and forget not that the Fed with its zero interest rates has blown up the gigantickest bond bubble in human history.

Silver & gold continued advancing. Silver grabbed another 13.9 cents (0.85%) to close Comex at 1655.7c. Gold bumped up $6.40 (0.54%) to $1,193.20.

The Gold/US$index spread rose again, 0.91% to 1,253. In the last 4 days it hath traded back to its 50 DMA, whence it broke out, touched back, & begun climbing again. Splendid. http://schrts.co/lEHI64

Shucks. Did I forget to tell y'all about that rounding bottom or bowl Gold has been forming? In this last plunge gold again validated the bowl's bottom. Go look at http://schrts.co/BWVC1E

So, too, has silver again proved the impermeability of that bowl, http://schrts.co/2z7CRO

Gold did climb through its 50 DMA today ($1,190.09) but not the 20 ($1,195.70). Still must march through $1,200, then $1,215, then $1,225. Can't fiddle here.

Silver, I'd slap you to get your attention if I could. You have got to climb through 1680c. Everything else is just pointless showing off.

With a few exceptions, silver & gold have been range-trading since Last November. This refusal to make new lows repeatedly witnesses a market bottoming.

Sometimes I just don't know what in the world people are thinking. Those two Moslem fellows who wanted to attack a meeting in Texas -- TEXAS! Of all the places in the world not to pull a gun, Texas has to stand right near the top. Didn't those fellows ever hear, "Don't mess with Texas?" There are more guns in Texas than Carter has little liver pills, & they WILL use them.

On 5 May 1818 was born in Trier, Germany Karl Marx, whose communist philosophy caused the deaths of hundreds of millions of human beings in the 20th century. It plagues us yet today, and rules this country and most of the world in some watered down form. Added to the error of his thought was a despicable, imperious, and disloyal character. Bad stuff often comes in rotten wrappers.

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
5-May-15 Price Change % Change
Gold, $/oz 1,193.20 6.40 0.54%
Silver, $/oz 16.56 0.14 0.85%
Gold/Silver Ratio 72.066 -0.220 -0.30%
Silver/Gold Ratio 0.0139 0.0000 0.31%
Platinum 1,148.10 -2.10 -0.18%
Palladium 794.95 12.30 1.57%
S&P 500 2,089.46 -25.03 -1.18%
Dow 17,928.20 -142.20 -0.79%
Dow in GOLD $s 310.60 -4.15 -1.32%
Dow in GOLD oz 15.03 -0.20 -1.32%
Dow in SILVER oz 1,082.82 -17.83 -1.62%
US Dollar Index 95.25 -0.39 -0.41%
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: 1,193.10      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,221.73 1,234.86 1,234.86
1/2 AE 0.50 607.97 629.36 1,258.72
1/4 AE 0.25 306.97 320.65 1,282.58
1/10 AE 0.10 125.17 130.64 1,306.44
Aust. 100 corona 0.98 1,162.46 1,171.46 1,195.12
British sovereign 0.24 282.96 295.96 1,257.27
French 20 franc 0.19 224.42 228.42 1,223.47
Krugerrand 1.00 1,206.22 1,216.22 1,216.22
Maple Leaf 1.00 1,201.10 1,217.10 1,217.10
1/2 Maple Leaf 0.50 686.03 626.38 1,252.76
1/4 Maple Leaf 0.25 304.24 319.15 1,276.62
1/10 Maple Leaf 0.10 126.47 130.05 1,300.48
Mexican 50 peso 1.21 1,425.46 1,436.46 1,191.39
.9999 bar 1.00 1,197.28 1,205.10 1,205.10
SPOT SILVER: 16.50      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 26.00 33.99
VG+ Peace dollar 0.77 18.50 21.00 27.45
90% silver coin bags 0.72 12,401.68 12,759.18 17.85
US 40% silver 1/2s 0.30 4,674.28 4,824.28 16.35
100 oz .999 bar 100.00 1,639.50 1,689.50 16.90
10 oz .999 bar 10.00 163.95 169.45 16.95
1 oz .999 round 1.00 16.60 17.10 17.10
Am Eagle, 200 oz Min 1.00 18.00 18.85 18.85
SPOT PLATINUM: 1,148.10      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 1,163.10 1,193.10 1,193.10
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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.

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