The Moneychanger
Daily Commentary
Tuesday, 19 January a.d. 2016 Browse the commentary archive

If what stocks did today was called a "rally," some mighty bad juju lies in the future.

After reaching an early high of 16,171, the Dow sawed lower & lower until it hit a low of 15,900 about 3:00. Right about then, "friends" entered the market to buy, buy, buy & it ended up 27.94 (0.17%) at 16,016.02, squeaking above the 16,000 morale busting mark. Yeah, that's what happened, and the Nice Government Men on the Plunge Protection Team didn't have to lift an index finger or push a BUY button, the market just fixed itself.

After a like performance, the S&P500 ended up one (1.00) point at 1,881.33. (If y'all want to view daily charts of the major stock indices, go to

Stocks locked in a third wave down I reckon. Fall will accelerate.

Dow in gold fishhooked up from a new low yesterday at 14.69 oz, & rose top 14.73 oz. Headed for deeps of the earth. Dow in silver fell 0.61% to 1,142.37 troy ounces. Now below the 200 DMA (1,148.29 oz). Nothing in those charts gainsays my conclusions that they double peaked in the summer and December. Picture in your mind Cassandra, wild look in her reddened eyes, tangled hair filling the air around her head, racing down Wall Street barefooted screaming, "The Dow in Gold & Dow in Silver warn of lower stock prices soon!" True to the curse that rests on her, she always prophesies the truth, yet none believe her.

US dollar still looks sickly. Rose 17 basis points today to 99.17, but that's right on the upper boundary of the even-sided triangle it has formed since the year opened. A close below 98.5 shatters the triangle downside, a close below 98 trumpets trouble for the buck.

Euro fell 0.5% to $1.0906, just as lazy and feckless as ever. Yen lost 0.56% today to 85.00, which sounds like a bad lick unless you know it made a new high close for the move yesterday at 85.47. Rise much more, & the yen rally gets out of hand. All the safe haven bid is flowing to the yen.

On Comex, where the black shirts take no prisoners, gold lost $1.60 (0.15%) to $1,089.90 but silver gainsaid that fall with a 22.6¢ rise to 1411¢.

Shenanigans returned to the metals' markets today after a flat day yesterday. In what I have to call an incomprehensible daily chart, gold gapped up a little after 3:00 a.m. Eastern from $1,089 to $1,092.5, traced out an island sideways, then gapped down from $1,092 to $1,087. After one more foray toward $1,082 before the US market opened, it turned up and steadily but gently rose the rest of the day.

Silver did the same, only more so. It gapped up from 1398¢ to 1419¢ -- gapped, as in no trading between those numbers. Formed an island, then gapped down about 5:00 a.m. from 1412¢ to 1405¢, & crabbed upwards rest of the day.

Those big gaps should signal clusters of stop orders -- or something else. Silver & gold keep slamming from one side of the range to the other, but I take as positive silver's better performance than gold's.

Surprising as it sounds, gold remains above its 20 & 50 DMAs & barely after $1,088 support/resistance. Silver daily keeps tapping on the ceiling above. Volume is rising, suggesting silver is gaining strength as it climbs.

Metals still need to prove their upward intention with closes above 1440¢ & $1,113. Frustrating as this range trading may be, it is constructing a base from which silver & gold can launch a rally. The wait shall not be prolonged.

Today I am observing Lee-Jackson Day, in honor of Confederate General Robert E. Lee and General Thomas Jonathan "Stonewall" Jackson. Of Lee it was said that he is "without any exception the very greatest of all the great captains that the English speaking peoples have produced." He was a Christian man of the purest conduct and thought.

Jackson was a quirky genius. Orphaned as a child, he graduated from West Point & proved his mettle in the Mexican War (as did Lee). When the War broke out he was teaching at Virginia Military Academy, and no one suspected what genius hid in him. His faith in God became famous to all who fought with him. General Ewell once burst into his tent at night and was surprised to see & hear Jackson praying. He later said, "If that is religion, I must have it." Before the War Jackson established a Sunday School for slaves at the Lexington Presbyterian Church, and even during the war always asked anxiously about their progress. He died at the height of victory after Chancellorsville, God granting his prayer that he not outlive the independence of his country.

Deo vindice!

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
19-Jan-16 Price Change % Change
Gold, $/oz 1,089.90 -1.60 -0.15%
Silver, $/oz 14.11 0.23 1.63%
Gold/Silver Ratio 77.243 -1.373 -1.75%
Silver/Gold Ratio 0.0129 0.0002 1.78%
Platinum 828.70 3.00 0.36%
Palladium 496.80 9.85 2.02%
S&P 500 1,881.33 1.00 0.05%
Dow 16,016.02 27.94 0.17%
Dow in GOLD $s 303.77 0.97 0.32%
Dow in GOLD oz 14.69 0.05 0.32%
Dow in SILVER oz 1,135.08 -16.46 -1.43%
US Dollar Index 99.19 0.17 0.17%
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: 1,088.50      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,117.89 1,133.13 1,133.13
1/2 AE 0.50 554.63 574.18 1,148.37
1/4 AE 0.25 280.03 292.53 1,170.14
1/10 AE 0.10 114.19 119.19 1,191.91
Aust. 100 corona 0.98 1,061.61 1,070.61 1,092.24
British sovereign 0.24 258.15 271.15 1,151.89
French 20 franc 0.19 204.75 208.75 1,118.09
Krugerrand 1.00 1,103.74 1,113.74 1,113.74
Maple Leaf 1.00 1,098.50 1,112.50 1,112.50
1/2 Maple Leaf 0.50 625.89 571.46 1,142.93
1/4 Maple Leaf 0.25 277.57 291.17 1,164.70
1/10 Maple Leaf 0.10 115.38 118.65 1,186.47
Mexican 50 peso 1.21 1,305.73 1,316.73 1,092.09
.9999 bar 1.00 1,092.31 1,100.50 1,100.50
SPOT SILVER: 14.05      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 17.50 20.00 26.14
90% silver coin bags 0.72 11,615.18 11,972.68 16.75
US 40% silver 1/2s 0.30 4,025.28 4,187.28 14.19
100 oz .999 bar 100.00 1,429.50 1,454.50 14.55
10 oz .999 bar 10.00 141.95 146.95 14.70
1 oz .999 round 1.00 14.15 14.61 14.61
Am Eagle, 200 oz Min 1.00 15.55 16.80 16.80
SPOT PLATINUM: 828.70      
Plat. Platypus 1.00 843.70 873.70 873.70
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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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