Sorry I missed y'all yesterday evening. It was my wife's fault. (There. No subtlety here, just rank finger pointing and self-justification.)
Stocks began dropping yesterday & speeded up today. Dow Industrial Average has lost 189.43 or 1.06% since Friday, not bad for two days' work. Closed today at 17,603.32. So far it appears to have bumped up near those December highs until it successfully found the rat poison. S&P500 has lost 27.61 (1.33%) and ended the day at 2,045.17. Dow chart's right here, http://schrts.co/90p7pc
Both have walked through the lower boundary of a very sharp rising wedge to hover in midair, much like Wile E. Coyote in the great 1960s cartoons used to run off the edge of a mesa, legs whirring against nothing, & hold up a sign saying, "Not again!" before he dropped out of sight.
Dow in Gold & Dow in silver are agreeing with lower stocks. Dow in Gold dropped 2.03% today to 14.28, down from a 14.63 high for the move yesterday. Yes, yes, it needs to confirm by falling lower. DiS has also turned down from 1,190 oz to 1,162.7 oz today. Upmove completed?
Meanwhile the US dollar index has slipped and slid down the (blue) downtrend line from the March 2015 high. Behold! In its decline the dollar index formed a falling right triangle (hypotenuse in blue). Look at it here, http://schrts.co/IKuNji
In October 2016 it broke out upward from that triangle, which generally portends the opposite, namely, a fall. It climbed to the March high about 100, then fainted, again and again. But it hath not yet suffered the crowning shame of plunging back into that falling triangle. And that line also caught & held the Dollar index in February and March.
Today the dollar index added 11 basis points (0.12%) for a 94.64 close.
The larger picture -- lean back from the screen, y'all -- shows a trading range between 92.50 and 100. This can be a distribution zone, leading to a top and a fall, or a consolidation zone, leading to another rally. As yet, we know not. One would assume, were one rational as central bankers are not, that the Fed ought to let the dollar fall to meet the competition from other central banks devaluing their currencies. However, we don't know, can't know, what sort of goals the Fed has, although we can never doubt that they don't care any more for the American public than a Dominecker chicken cares for a fire ant, and they adore & serve the banks like a geeky teenage boy hopelessly adores the cheerleader captain. Bottom line is, we don't know yet what the longer term dollar outlook will be. Waiting for breakdown or breakout.
Among the other scrofulous major currencies, the Euro fell 0.05% today to $1,1385. Nobody home there. Yen, however, gapped up and landed 0.91% higher at 90.65, a new high for the move climbing since last November. Maybe the Nipponese central bank criminals have a deal with the US Federal Reserve Criminals to let the yen appreciate a while.
Yield on the 10 year US Treasury note fell today 2.92%, gapped down in fact, to 1.727%. Investors loading into bonds (bond prices rise as yields fall) signals they are loading out of stocks. More bad juju for stocks.
Speaking of interest rates, the HYG junk bond fund has since mid-February recovered from a four-month crash up to the major downtrend line & 200 DMA. Dancing on that line like a tomcat straddling hot asphalt, faltering, uncertain. Ready to cascade again. Risk off, fortissimo.
Gold lost 4.30 yesterday, but gained $10.40 today to shutter Comex at $1,228.40. Silver lost 10¢ Monday & closed below 1500¢ @ 1494.2¢, but today regained 17.2¢ for a 1511.4¢ close.
The quandary remains, gold still speaking with forked tongue. Gold reached up and nearly touched its 20 DMA ($1,241) with a $1,238.80 high. Plus it has refused to fall through that uptrend line from the January low (green) which the 50 DMA is now tracking. Look here, http://schrts.co/yvIunK
Gold's stubborn refusal to break down, and its snappy recoveries from spikes down, keep it looking strong. But. But, merely "not breaking down" doesn't get you anywhere. Gold could still break to $1,170, but keep watching the clock because time is running out for this correction. It ought to be a memory by 15 April.
Behold, silver, http://schrts.co/W6Wrck
It formed that bowl in November - January, slung up out of the bowl, reached 1599, then fell back to the bowl lip (1461¢) for a final kiss good-bye. Ran for 1600¢ again, but fell to defeat in March. Yet in the ensuing retreat, silver has refused to fall through its 200 DMA (now 1490¢).
None of this lately inspires cheering, but silver is showing strength at 1500¢, & we may well have seen the low at 1478¢. But that is all pie in the sky speculation until silver begins climbing and shows some spunk by closing higher than 1560¢. Till then, we are just like men in prison, working off time until 15 April.
On 5 April 1614 Pamunkey Indian chief's daughter Pocahontas married English tobacco planter John Rolfe. She was 18. In 1607 when she saved the life of Englishman John Smith about to be executed by her father, she was probably 11. She had a son in 1615, and in 1616 travelled with her family to London. In 1617 the Rolfes took ship for Virginia but she died at Gravesend before they got to sea. She was 21.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger