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Monday, 28 November a.d. 2016 Browse the commentary archive

Green Party candidate Jill Stein & now Hillary Clinton are pressing for recounts in Wisconsin, Pennsylvania, & Michigan. Internet's full of talk about civil war. Last civil war began over an election. I don't think these nincompoops have any inkling what primal forces of nature they are dealing with. Once that carnage gets out of the bag, there's no putting it back until it drinks its fill of blood. If you pray, you'd better pray the US doesn't back into a civil war.

Still wrings an ironic smile out of my face, how all those lefties & commies & liberals (but I repeat myself) are all for democracy until the vote goes against 'em.

Let's forget politics and look at markets. As I expected, Friday's thin markets went crazy, probably making the high for stocks and lows for metals.

Stocks rose to a new all time high on Friday, 19,152.14 for the Dow & 2,213.35 for the S&P500. Today they backed off. Dow fell 54.24 (0.28%) to 19,097.90 while the S&P500 slid 11.63 (0.53%) to 2,201.72.

Can't really say yet that today's lower closes mark the start of some further decline. Today the S&P500 did break down out of its rising wedge, but only slightly. A lower close tomorrow will argue that it's breaking down. S&P500 chart's here,

US dollar index chart, overbought as it can be (look at the RSI), is found here,

It has broken down from a rising wedge with a key reversal completed today (rise into new high ground on Thursday with a lower close, followed by a lower close today. Whether the dollar continues to rise to 110 or turns and falls through 92, here in the short term it will breathe and blow a while, correcting that steep rise.

Friday gold was knocked down $10.90 for a Comex close at $1,178.40 Silver actually gained 8.1¢ got 1646.4¢. Today gold made good all Friday's losses, gaining $12.40 to $1,190.80, a smidge higher than last Wednesday's $1,189.30. Again today silver climbed, up 11.3¢ to 1658.3¢. Silver rising or refusing to fall to new lows while gold tumbles constitutes a non-confirmation, a signal they may be turning around.

Here's a gold chart,

Gold is as oversold as it has been at any time in the last 4 years, according to the RSI. It poked through the floor at $1,200 and has -- so far -- made a V-bottom. However, it must climb rapidly through $1,200 if that really is a V-bottom. Can't do any more than wait and see.

Silver chart is right here,

Silver's not nearly as oversold as gold, and seems to have found its feet on a new bottom channel line. HOWEVER, it must scrabble back into the old channel by closing above 1690¢. Till then, silver is only teasing us.

I am presently assuming that Thursday & Friday marked the lows for silver & gold, but that's founded on the expectation both continue to advance. A dropping dollar will put some grease on those wheels.

Probably born 28 November 1628 in Elstow, Bedfordshire, England, John Bunyan was baptized on 30 November.

John's father trained him in his own trade as a tinker, mending pots and pans. Just after his 16th birthday Bunyan enlisted in the Parliamentary army during the English Civil War. During that war and in Cromwell's protectorate later, dissenting religious sects exploded. Everybody with a soapbox became a preacher.

After an intense meeting with his guilt, Bunyan joined a non-conformist church, i.e., outside the official church of England. He began to preach.

When the Stewart monarchy was restored in 1660, religious liberty came to an end. By 1664 several acts had been passed that made preaching & meeting as non-conformist groups a criminal offense. Tried and convicted in 1661, Bunya refused to stop preaching so his imprisonment stretched out ot 12 years in the Bedford County Gaol.

From the standpoint of a state that wanted to suppress dissent, jailing Bunyan was not a profitable idea. In jail he took to writing, beginning with his autobiography, "Grace Abounding to the Chief of Sinners" and then beginning "Pilgrim's Progress." He died in 1688.

In an astonishing accomplishment for an uneducated man, Bunyan's Pilgrims' Progress became the best known religious work in English, has been translated into over 200 languages, & has never been out of print. Even today our language abounds with expressions stolen from Bunyan's book: Slough of Despond, Doubting Castle, Vanity Fair, the giant Despair.

Instead of whining, Bunyan turned prison and injustice into profit for the whole world. Clearly he wasn't a 21st century man.

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
28-Nov-16 Price Change % Change
Gold, $/oz 1,190.80 12.40 1.05%
Silver, $/oz 16.58 0.11 0.69%
Gold/Silver Ratio 71.808 0.260 0.36%
Silver/Gold Ratio 0.0139 -0.0001 -0.36%
Platinum 921.30 14.50 1.60%
Palladium 756.35 15.30 2.06%
S&P 500 2,201.72 11.63 0.53%
Dow 19,097.90 -54.24 -0.28%
Dow in GOLD $s 331.53 -4.44 -1.32%
Dow in GOLD oz 16.04 -0.21 -1.32%
Dow in SILVER oz 1,151.66 -11.19 -0.96%
US Dollar Index 101.37 -0.17 -0.17%
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SPOT GOLD: 1,193.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,228.01 1,233.38 1,233.38
1/2 AE 0.50 608.12 629.52 1,259.04
1/4 AE 0.25 307.04 320.73 1,282.91
1/10 AE 0.10 125.20 130.68 1,306.77
Aust. 100 corona 0.98 1,163.92 1,172.92 1,196.61
British sovereign 0.24 283.03 296.03 1,257.58
French 20 franc 0.19 220.58 224.58 1,202.89
Krugerrand 1.00 1,207.72 1,217.72 1,217.72
Maple Leaf 1.00 1,203.40 1,217.40 1,217.40
1/2 Maple Leaf 0.50 686.21 626.54 1,253.07
1/4 Maple Leaf 0.25 304.32 319.23 1,276.94
1/10 Maple Leaf 0.10 126.50 130.08 1,300.81
Mexican 50 peso 1.21 1,431.57 1,442.57 1,196.46
.9999 bar 1.00 1,197.58 1,205.40 1,205.40
SPOT SILVER: 16.57      
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 12,491.05 12,777.05 17.87
US 40% silver 1/2s 0.30 4,696.40 4,846.40 16.43
100 oz .999 bar 100.00 1,637.00 1,672.00 16.72
10 oz .999 bar 10.00 167.20 172.20 17.22
1 oz .999 round 1.00 16.37 16.87 16.87
Am Eagle, 200 oz Min 1.00 18.07 19.57 19.57
SPOT PLATINUM: 921.30      
Plat. Platypus 1.00 936.30 966.30 966.30
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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.
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  • 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.
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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.

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