The markets were not kind to the US dollar and stocks today, but oh! Silver and gold shone.
US dollar index has reached Fish or Cut Bait time. It's at the bottom line of a channel that has long caught it -- since December, and today closed below that bottom boundary. More, it has reached the 92.50 - 93.85 support area that has backstopped it since last May. Here: see what you think, http://schrts.co/QjfYIH
If the dollar index falls through this support, nothing will catch it before 80. One expects the loonies at the Federal Reserve wouldn't want markets banged around by a tanking dollar, but who knows what motivates their primitive nervous systems?
Yen has climbed so much that it has Japanese Nice Government Men making announcements that they might have to do something if folks don't straighten up and let the yen fall. Rose another 0.13% today to 92.64, highest close of the upmove since December that began at 80.81. Oooooo.
Euro rose 0.11% to $1.1410. European stocks today rose as investors bought -- wait for it -- Italian bank shares, on the hope the government bail out would church 'em up. I reckon they'll wake up feeling pretty rough after that drunk.
In the United States, Home of the Banks & Land of Big Bank Fees, stocks fared not so well. They kept dropping all day, unable to rise up, and finally ended the day lower. Dow chipped off 20.55 (0.12%) to 17,556.41 but the S&P500 lost more, 0.27% or 5.61, to 2,041.99. Hovering, floating, like Wile E. Coyote before the ZIP! Fall.
More to the point are the Dow in Gold & Dow in Silver. Here the DiG chart, http://schrts.co/8Sv0tc
After crashing through the uptrend line from the 2011 low the DiG started an upward retracement that corrected less than 50% of the previous fall, topping at 14.574. Since then it has fallen through the 20 DMA, the uptrend line, and today, nearly, that post-2011 uptrend. The 50 DMA also lurks in the same area, 13.84. It won't take more than a puff from a bat's wing to push the DiG through those lines, at which point gravity takes over.
Behold, the Dow in Silver, http://schrts.co/bj2Ryj
Same pattern as the DiG appears here, long fall from December to February and rallying into 1 April. However, more volatile silver went pas the 61.8% correction level and the 200 DMA, but it the last three days it dove off the high dive. It has cut through the uptrend line, the 20 DMA, the 50 DMA, and the 20 DMA, AND today punched through that uptrend line from 2011. Lower she goes!
Before I say anything about silver & gold, ponder a moment on the Gold/Silver ratio, http://schrts.co/kh9gOy It tumbled 2.6% today, gapped down and broke the bottom channel line.
Why do I care? Because this signals that silver is leading this rally, & that it has a full head of steam. Now the ratio didn't close below that lower boundary, but right near. Silver's got that mean look in its eye.
Today silver rose 59.2¢ (3.8%) to 1597.4¢ but gold rose only 1.1% ($14.20) to 1,256.70.
All this only amounts to gold and silver moving into position to rally. Fireworks will start when silver breaches 1600¢, likely tomorrow.
Unless metals turn smack around 180 degrees & plunge straight down tomorrow, y'all can stop waiting for any further correction or lower prices. REPEAT: Correction has ended, next rally has begun. Y'all will never see silver & gold at these prices again, if I'm right.
One at a time. Silver first, and so the chart, http://schrts.co/zsmR7J
Price rose on rising volume. MACD, Rate of Change, & RSI are all flapping skywards. Silver already touched its 200 DMA in correction, surely satisfying a correction's requirements. Now it has risen through its 50 & 200 day moving averages.
What looms? That 1617¢ high from March. 1600¢ is a brick wall, & to prove silver can knock its way through, it has to run clean through 1617¢. Above that word will get out that silver is flying, and it will attract buyers like free whiskey attracts city voters.
On Friday all the major gold stock indices escaped to the upside -- good, they're leading gold. Here's the gold chart, http://schrts.co/fU1zLv
Everything's lined up propitiously. Today gold punched through that $1,240-ish resistance that had kept it imprisoned, rising on rising volume. MACD is turning up, as has Rate of Change & RSI.
So what? What must gold do to prove its upward intentions? Close above that last peak at $1,272, for starters. Than clear the peak before that, $1,288. Now it's ready to bust a gut running through $1,308 and beyond.
I am just reporting what the chart shows. STOP WAITING FOR A CORRECTION. Buy now.
On 12 April, well, never mind the year, was born my dear wife, Susan.
On 11 April 1689 were crowned William (of Orange) and Mary as joint sovereigns of Britain.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger