The Moneychanger
Daily Commentary
Monday, 8 February a.d. 2016 Browse the commentary archive

Stocks were smashed today, and bank stocks among the worst. Got a text this morning from a friend, "Stocks down 400, gold 1189, silver 15.37." Woke me up.

Most of the day the Dow was underwater 250 or more, at its lowest, about 2:30 p.m., down at 15,803.55 (-2.5%). Yet it found friends about 2:30 who bought it till it threw a leg over the morale buster, 16,000. Closed down only 177.92 (1.1%) at 16,027.05. S&P500 lost 26.61 (1.42%) to 1,853.44, a portentous new low close for the move.

Dow's low close in the August crash-let was 15,666. Must hold line is 15,960. Dow is crumbling slower than the S&P500, which today posted a new low close, and a close below the August low. Shucks! Did I forget to tell y'all that volume is rising? That hints that stocks have only begun to drop.

TODAY WAS THE DAY. Yes, today the Dow in Gold punched through the uptrend line from the September 2011 low! DiG closed at 13.38 (G$276.59 gold dollars). The trend of Stocks against metals has again turned down, down, down. Gentleman than I am, I won't remind y'all that from 1999's 44 oz high to 2011's 5.70 oz low stocks lost 87% against gold. Nor will I forecast that before gold reaches its peak that one to two ounces of gold will buy the whole Dow, another 88% loss. Here's a picture, http://schrts.co/YbHaF8

BEHOLD, ALSO THE DOW IN SILVER. Closed at 1,045.81 (S$1,352.16 silver dollars). Has now broken down after double tops July - December, smashed the uptrend line from August 2013, smashed the bottom channel boundary, and today punctured the uptrend from the 2011 low. Low will come at 32 oz, about 97% lower than here. http://schrts.co/YPfN7I

Bottom rail's on the top now. Primary trend has turned, metals will outrun stocks mercilessly. Sell stocks & buy metals.

US dollar index sank again below its 200 day moving average (96.89), perching at 96.74, down 31 basis points (0.32%). A break of 95.50 confirms dollar is trending much further down. Euro rose 0.33% to $1.1196. Broken out into a rally above the 200 DMA. Yen surged 0.86% to 86.33, highest level since January 2015. Now at very top of range established after Abe's gutting in 2015. Nice government men must be chewing their kimono sleeves.

Stock dive has investors so scared they piled into US treasury securities, taking the 10 year treasury yield to 1.735%, lowest since 30 January 2015. Price matches that January high & from here must surge higher or fall away. No indecision allowed here. Junk bonds (See HYG) gapped down today. Bad juju. Gigantic boil in credit and banks is festering, swelling, ready to burst.

Before gold, bank stocks. Bank Stocks index ($BKX) fell to a new low for the decline that began in July, its lowest level since June 2013. I remind y'all that the BKX reflects confidence in the financial & monetary system. Rising BKX equals rising confidence, falling BKX falling confidence. But better to illustrate the shift of confidence from financial assets to gold is the Gold/BKX spread. Today it gapped out of a range that had chained it since 2013, to 20.01. Money is pouring from bank stocks into gold, and the shift has only begun. Chart's at http://schrts.co/HlgqYM

GOLD's wave, swelled, billowed, & rolled over rocks & shore, up $40.10 (3.5%) to $1,197.90. Silver staged a little tidal wave of its own, up 65.2¢ (4.4%) to 1541.6¢.

About 11:00 eastern time gold leapt from $1,182 to $1,195. Straight up. Silver mirrored that jump. Probably they hit stop loss orders clustered at $1,182.50 and 1510¢, but whatever the reason, both were unstoppable. In the aftermarket, gold backed up to $1,190.30 & silver to 1532¢

Today's move makes more likely the upside-down head & shoulders forecast I showed y'all on Friday, & paints the neckline about $1,200. In correcting back from the neckline, that shoulder could retrace to $1,140, $1,113, or even $1,090. If so, will scare the starch out of all but the most convinced gold investors, and offer us one last buying opportunity.

However, gold might make one more surge to lift that neckline. It might punch right through $1,200 & keep climbing to $1,230. Given the parabolic rise of the last few days, it will correct soon, but that rocketing volume must break first. Chart's at http://schrts.co/PBqN2P

Silver closed above its 200 DMA (1512¢) today, and ran into resistance about 1540¢. If it balketh not here, 'twill hit 1640¢

Y'all don't blame me if you're missing out. I've been telling y'all to buy.

I know my needle's stuck in this groove, but please keep praying for my wife Susan & her eye. And thank you.

SPECIAL OFFER: INVENTORY CLEAN OUT

I have been accumulating small gold coins a few at a time, and now I have finally found enough to offer some to y'all. Spot gold basis is $1,190.30.

OFFER NO. 1, GOLD MEXICAN 2-1/2 pesos

Back in gold standard days the Mexican gold peso was just about exactly half the size of the United States dollar. At 0.0603 troy ounce fine gold the Mexican 2-1/2 pesos is almost half the size of the US $2-1/2 dollar gold piece. These tiny coins, just about one-sixteenth of an ounce, rank among the world's smallest gold coins. If you're looking for small gold coins for barter, it don't get no better than these.

People ask me if the Mexico City mint and their gold coins are reliable. Well, it has been striking coins since 1535, 257 years before the US mint opened. I reckon they're reliable so far.

One lot is Thirty (30) Mexican 2-1/2 pesos at $78.10 each for a total of $2,343.00 plus $35 shipping, a grand total of $2,378.00 for 1.8090 troy ounces fine gold (8.8% premium). I have only eight , so when they're spoken for, I have no more at that price.

OFFER No. 2, US$5.00 GOLD COMMEMORATIVES

Back in the 1980s and 1990s the US Mint struck a lot of commemorative $5.00 gold coins, issued them a big premium, then the premium vanished and they just sell as bullion gold coins in today's market. They are all proof coins in plastic capsules, containing 0.2419 troy ounce fine gold. I can sell lots of Eight (8) at $304.20 each for a total of $2,433.60 plus $35 shipping for a total of $2,468.60. With spot gold at $1,190.30, that's a 5.6% premium over melt value.

I have four lots, first come, first serve.

Special Conditions:

First come, first served, and no re-orders at these prices. I will write orders based on the time I receive your e-mail.

Sorry, we will not take orders for less than the minimum shown above.

All sales on a strict "no-nag" basis. We will ship as soon as your check clears, but we allow Two weeks (14 days) for your check to clear. Calls looking for your order two days after we receive your check will be politely and patiently rebuffed. ORDERING INSTRUCTIONS:

1. You may order by e-mail only to offers@the-moneychanger.com. No phone orders, please. Please do NOT order by replying to THIS email, because it will delay your email.

Your email must include your complete name, address, & phone number. We cannot ship to you without your address. Sorry, we cannot ship outside the United States or to Tennessee.

2. When you buy from us, we cannot later change or cancel the trade. We are giving you our word that we will sell at that price, & you are giving us your word that you will buy at that price, regardless what later happens in the market, up or down.

If you break your word to us, we will never again do business with you.

3. "First come, first-served" means that we will enter the orders in the order that we receive them by e-mail, till supply is exhausted.

4. If your order is filled, we will e-mail you a confirmation. If you do not receive a confirmation, your order was not filled.

5. You must send payment by personal check or bank wire (either one is fine) within 48 hours. It just needs to be in the mail, not in our hands, in 48 hours. Sorry, no credit cards.

7. "No Nag Basis" means that we allow fourteen (14) days for personal checks to clear before we ship.

Want your order faster? Send a bank wire, but that's not required. Once we ship, the post office takes four to fourteen days to get the registered mail package to you. All in all, you'll see your order in about one month if you send a check.

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
8-Feb-16 Price Change % Change
Gold, $/oz 1,197.90 40.10 3.46%
Silver, $/oz 15.42 0.65 4.42%
Gold/Silver Ratio 77.705 -0.716 -0.91%
Silver/Gold Ratio 0.0129 0.0001 0.92%
Platinum 927.00 25.60 2.84%
Palladium 519.05 0.00 0.00%
S&P 500 1,853.44 -26.61 -1.42%
Dow 16,027.05 -177.92 -1.10%
Dow in GOLD $s 276.57 -12.76 -4.41%
Dow in GOLD oz 13.38 -0.62 -4.41%
Dow in SILVER oz 1,039.64 -57.96 -5.28%
US Dollar Index 96.74 -0.31 -0.32%
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: 1,190.30      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,218.87 1,239.10 1,239.10
1/2 AE 0.50 606.54 627.88 1,255.77
1/4 AE 0.25 306.24 319.89 1,279.57
1/10 AE 0.10 124.88 130.34 1,303.38
Aust. 100 corona 0.98 1,157.40 1,166.40 1,189.96
British sovereign 0.24 282.30 295.30 1,254.45
French 20 franc 0.19 223.90 227.90 1,220.65
Krugerrand 1.00 1,204.58 1,214.58 1,214.58
Maple Leaf 1.00 1,200.30 1,214.30 1,214.30
1/2 Maple Leaf 0.50 684.42 624.91 1,249.82
1/4 Maple Leaf 0.25 303.53 318.41 1,273.62
1/10 Maple Leaf 0.10 126.17 129.74 1,297.43
Mexican 50 peso 1.21 1,427.85 1,438.85 1,193.37
.9999 bar 1.00 1,194.47 1,202.30 1,202.30
SPOT SILVER: 15.32      
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 12,491.05 12,848.55 17.97
US 40% silver 1/2s 0.30 4,401.40 4,563.40 15.47
100 oz .999 bar 100.00 1,557.00 1,582.00 15.82
10 oz .999 bar 10.00 154.70 159.70 15.97
1 oz .999 round 1.00 15.42 15.88 15.88
Am Eagle, 200 oz Min 1.00 16.82 18.07 18.07
SPOT PLATINUM: 927.00      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 942.00 972.00 972.00
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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.

Other Important Information

This is not an offer to buy or sell. Prices subject to change without notice. To enter an order, call us at (888) 218-9226 or (931) 766-6066. Sorry, no sales to Tennessee.

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