The Moneychanger
Daily Commentary
Wednesday, 28 December a.d. 2016 Browse the commentary archive

Markets edged off the sofa today.

Stocks have now busted their short term uptrend lines. Here is the Dow Industrials chart, and the S&P500,

On both chart the uptrend line from Trump's election was irretrievably broken today. S&P500 dropped 18.96 (84%) to 2,249.92. Dow Industrials plunged 111.36 (0.56%) to 19,833.68. Looks like stocks found the edge of that cliff. RSI & MACD support that conclusion.

On a five day chart the US dollar index, which rose 24 basis points (0.23%) to 103.24, has broken out of a range topped by 103.15. Not a new high today, but looks like an new leg up is starting. If so, it's targeting 106.76. I've prepared a chart for y'all here,

Euro and Yen remain on the Endangered Species list. Euro lost 0.358% to end at $1.0415. Yen in fact rose 0.35% to 85.45, but what can you say about a market that has broken support? Well, it will go lower.

Gold added $2.10 (0.2%) today & locked the Comex's door at $1,139.40. Silver added 5.9¢ (0.4%) to 1598.8¢.

Gold's high today reached $1,145.10, & the 5 day chart shows it blocked about there, and supported about $1,136. Inference? Gold must break out of that range, or its present little rally will prove only another disappointing rally-ette. Here's a three month chart, showing the bowl that promises to hold a bottom.

Y'all go look at the silver chart,

Silver's five day chart looks peppier than gold's, showing rising tops & bottoms. And today it closed (the day, not Comex) above 1600¢. Need I add that without a strong close above 1600¢, there ain't no reason to break out the champagne? Not even the Co-Cola.

On 28 December 1895 the Grand Café in Paris (France, not Tennessee) witnessed the world's first commercial movie showing. The film was made by twin brothers, Louis & Auguste Lumiere who called their camera-projector the Cinematographe. The Lumiere brothers used a new technology that was superior to Edison's 1891 Kinetoscope.

Given today's movies, you have to question where the Lumieres wouldn't have helped more by perfecting a nice machine gun or A-bomb.

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-Dec-16 Price Change % Change
Gold, $/oz 1,139.40 5.40 0.48%
Silver, $/oz 15.99 0.23 1.43%
Gold/Silver Ratio 71.266 -0.675 -0.94%
Silver/Gold Ratio 0.0140 0.0001 0.95%
Platinum 899.60 -3.70 -0.41%
Palladium 667.35 -6.95 -1.03%
S&P 500 2,249.92 -18.96 -0.84%
Dow 19,833.68 -111.36 -0.56%
Dow in GOLD $s 359.84 -3.74 -1.03%
Dow in GOLD oz 17.41 -0.18 -1.03%
Dow in SILVER oz 1,240.54 -24.77 -1.96%
US Dollar Index 103.24 0.24 0.23%
IMPORTANT NOTE: The following are wholesale, not retail, prices. To figure our retail selling price, multiply the "ask" price by 1.035. To figure our retail buying price, multiple the "bid" price by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
SPOT GOLD: 1,141.00      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,176.37 1,179.22 1,179.22
1/2 AE 0.50 591.38 601.88 1,203.76
1/4 AE 0.25 301.39 306.64 1,226.58
1/10 AE 0.10 123.98 124.94 1,249.40
Aust. 100 corona 0.98 1,112.82 1,121.82 1,144.48
British sovereign 0.24 270.61 283.61 1,204.78
French 20 franc 0.19 213.02 219.02 1,173.14
Krugerrand 1.00 1,156.97 1,166.97 1,166.97
Maple Leaf 1.00 1,151.00 1,165.00 1,165.00
1/2 Maple Leaf 0.50 656.08 599.03 1,198.05
1/4 Maple Leaf 0.25 290.96 305.22 1,220.87
1/10 Maple Leaf 0.10 120.95 124.37 1,243.69
Mexican 50 peso 1.21 1,365.96 1,376.96 1,142.04
.9999 bar 1.00 1,145.56 1,151.00 1,151.00
SPOT SILVER: 16.01      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 23.00 27.00 35.29
VG+ Peace dollar 0.77 17.00 20.00 26.14
90% silver coin bags 0.72 11,658.08 11,944.08 16.71
US 40% silver 1/2s 0.30 4,529.73 4,679.73 15.86
100 oz .999 bar 100.00 1,590.50 1,615.50 16.16
10 oz .999 bar 10.00 161.55 166.55 16.66
1 oz .999 round 1.00 16.26 16.56 16.56
Am Eagle, 200 oz Min 1.00 17.51 19.01 19.01
SPOT PLATINUM: 899.60      
Plat. Platypus 1.00 914.60 944.60 944.60
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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.
  • 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.

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