The Moneychanger
Daily Commentary
Wednesday, 9 November a.d. 2016 Browse the commentary archive

I'm not sure I can add anything rational or edifying to today's events, but I couldn't appear less rational than the hissy fit the world's elite threw today. They spend so much time in New York, Washington, & Brussels talking to each other they never took time to ask any of us in flyover country what we thought. They do not like it when "democracy" works, and, working, bites 'em in the leg. What agony! Their gravy train is pulling away from the station -- without them.

Markets went completely lunatic today with enormous swings. First, stocks.

Dow futures lost 800 points and the S&P500 five percent last night when it became clear that Hillary might go to jail instead of Washington. Yet after Trump gave a big-spending acceptance speech, vowing to spend on infrastructure, etc., the Keynesian/Marxists on Wall Street saw big profits, and stocks shot up. Leading were financial stocks -- banks, brokers, and insurance. Go figure.

Dow ended the day up 259.21 (1.41%) at 18,591.95, a three month high. S&P500 rose 23.83 (1.11%) to 2163.39. Here's the Dow chart,

I don't like the taste of crow well enough to hazard what might happen next. Since I know that government spending of any kind hurts the economy & doesn't help it, I doubt stock investors' optimistic frenzy today will pan out. But maybe I'm just a bean-counting sourpuss. My suspicion says this is a flash in the pan rally that will run out of adrenalin shortly, but I could be wrong (them crow feathers get stuck in my teeth).

Oddly enough, Trump's spending announcement drove the US dollar index up 72 basis points (0.74%) to 98.58. That seems contradictory since he will load on more governemnt debt which will inflate the dollar, but interest rates are driving the dollar. Look at the 10 year treasury yield chart, which gapped up above a downtrend line ruling since 2014. And don't pass up the 30 year treasury bond yield at which gapped above a two year downtrend. Other things equal, rising rates make the US dollar more valuable, especially in a world of central bank imposed negative rates. The market is tussling with the Fed for control of interest rates, & Janet Yellen ain't that good a wrassler.

Gold & silver were the biggest surprise. Now I could say that the Nice Government Men of the Plunge Protection Team were working overtime to prevent a stock collapse & gold explosion, but that seems a bit too neat. Let us therefore assume natural factors at work. In the first flush of Trump victory overnight, gold soared to $1,337.40. then collapsed as the day progressed to close Comex down 80 cents against yesterday's close at $1,272.60. Silver hit 1900, then fell back to 1835.7¢, 2.7¢ above yesterday's close. Here's gold's chart,

Durned if I know what it means, or if it means anything. Gold shot up, then ended pennies below its 200 DMA and uptrend line. Is that the end? Nope. I'm not sure of much but if Trump does his spending, gold & silver will rise. I'm sure also that both turned up last December, and I rely on the plainness of that chart more than on one or two days emotional frenzy over a blasted election.

Silver's chart is another positive sign for metals, It couldn't hold on above its 50 DMA, but remains well above its uptrend line and 1800¢ support.

Give markets a day or two to settle down. I can't imagine how a Trump victory could make a painfully overbought stock market a better value, or make undervalued siilver and gold a worse bargain, but then, I'm jes' a nat'ral born durn fool from Tennessee, not one of them pointy-toed shoe wearers from New Yawk who were so sure Hillary would win. What do I know? Nothing a-tall.

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
9-Nov-16 Price Change % Change
Gold, $/oz 1,272.60 -0.80 -0.06%
Silver, $/oz 18.36 0.03 0.15%
Gold/Silver Ratio 69.325 -0.146 -0.21%
Silver/Gold Ratio 0.0144 0.0000 0.21%
Platinum 1,000.50 -5.30 -0.53%
Palladium 680.90 15.95 2.40%
S&P 500 2,163.39 23.83 1.11%
Dow 18,591.95 259.21 1.41%
Dow in GOLD $s 302.00 4.40 1.48%
Dow in GOLD oz 14.61 0.21 1.48%
Dow in SILVER oz 1,012.80 12.65 1.26%
US Dollar Index 98.58 0.72 0.74%
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SPOT GOLD: 1,275.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,314.18 1,318.64 1,318.64
1/2 AE 0.50 650.20 673.04 1,346.07
1/4 AE 0.25 328.29 342.90 1,371.59
1/10 AE 0.10 133.86 139.71 1,397.11
Aust. 100 corona 0.98 1,244.38 1,253.38 1,278.70
British sovereign 0.24 302.60 315.60 1,340.69
French 20 franc 0.19 235.83 239.83 1,284.57
Krugerrand 1.00 1,292.49 1,302.49 1,302.49
Maple Leaf 1.00 1,285.90 1,299.90 1,299.90
1/2 Maple Leaf 0.50 733.64 669.85 1,339.70
1/4 Maple Leaf 0.25 325.35 341.30 1,365.21
1/10 Maple Leaf 0.10 135.25 139.07 1,390.73
Mexican 50 peso 1.21 1,530.53 1,541.53 1,278.54
.9999 bar 1.00 1,280.37 1,287.90 1,287.90
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SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 25.00 27.00 35.29
VG+ Peace dollar 0.77 20.00 22.00 28.76
90% silver coin bags 0.72 13,652.93 13,938.93 19.50
US 40% silver 1/2s 0.30 5,234.78 5,384.78 18.25
100 oz .999 bar 100.00 1,819.50 1,854.50 18.55
10 oz .999 bar 10.00 185.45 190.45 19.05
1 oz .999 round 1.00 18.20 18.70 18.70
Am Eagle, 200 oz Min 1.00 19.90 21.40 21.40
SPOT PLATINUM: 1,000.50      
Plat. Platypus 1.00 1,015.50 1,045.50 1,045.50
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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.

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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).

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