Listen up! Go rent & watch the movie, "The Big Short." Don't wait, do it tonight. Naïve folks miss the point who watch it and say, "Why did so few people catch on that real estate and mortgages were in a bubble?" . Looking at that parabolic price graph for real estate, plenty of people caught on. Why didn't Wall Street catch on? Because they were making so much money. They could see, but they willed not to see. Go watch the movie.

First three days of this week will fester under the loathsome toadstool cloud of a Fed meeting and a Bank of Japan meeting in the same week. That will squelch markets, & make their intentions & direction opaque. Yea, Buddy, we need those stabilizing central banks! A country without a central bank is like a cockroach without a tuxedo.

Stocks hiccupped, nose underwater all day long. Dow ended 26.51 (0.15%) lower at 17,977.24. S&P500 coughed up 3.79 (0.18%) to fall to 2,087.79. What can Mrs. Toad, Janet, croak from beneath her toadstool that can fix a brokenstock market? It is laboring, struggling, drying up. She will mumble about maybe raising interest rates & croak out more double talk from both sides of her wide mouth, but the Fed is too scared to do anything drastic, like raising rates..

US dollar index spoke out of both sides of its mouth today, too. Backed off a big 28 basis points (0.28%) to 94.81. Remains above the 20 DMA (94.55) so remains positive, but take-off to a rally is like watching an airplane kids made out of a stuffed camel & cedar boards struggling to lift off the runway.

Interest rates (proxied by the 10 year US treasury note yield) have risen to their highest point since March, and the highest in April. Rose 0.74% to 1.902% today, but that's a long ways from any meaningful hurdle, although it is above the 50 & 20 day moving averages. 200 DMA stands at 2.073 and the downtrend line from 2007 is at 2.25. http://schrts.co/vUJO4G

Gold bounced back today, up $10.20 (0.83%) from Friday's Comex close to $1,238.90. Silver edged up 10.9¢ (0.64%) to 1700.5¢.

None of this scratches y'all's itch or mine. Little old one day bounce within a trading range answers no questions, raises no presumptions, and whoever acts on it does so at his own risk.

Looking at this chart, http://schrts.co/pI1ZgR it is plain that until gold conquers $1,287.80, the March high, you can't say it is rallying again. Likewise, it can fall as low as $1,218 without breaking the lower boundary of its 2-1/2 month range. Proverb says that bull markets try to shake of as many riders as possible. They do that with terror. What would terrorize gold investors? A drop to $1,192, the heel of the trading range, a smidge greater than a 38.2% correction. Gold may be lining up to do just that, since it closed today smack on its intertwined 20 & 50 DMAs.

However, gold won't spend more than one or two weeks in this correction, so that implies it will be shallow. If it offers you any dips, better hop on and buy fast.

Silver's chart, http://schrts.co/CqZ2b5 , is overbought on its indicators, and ripe for a correction. The bunched trading of the last five days, coming atop a strong advance in April with a pause in the middle to tap through that upper range boundary, also looks toppy. But whatever correction silver sees doesn't promise much. Might reach 1660¢, or in a terror 1591¢.

Both silver & gold remain steadfastly, stubbornly strong, adding yet another assurance to the conclusion they bottomed in December 2015.

I find myself in need of asking another favor from y'all. I am going to undergo surgery on 6 May for a hammertoe. Yes, I know, laugh because it sounds ridiculous, but it hurts seriously. I would very much appreciate y'all's prayers for a successful surgery and healing. Thanks in advance.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

Copyright Notice

© 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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