The picture is clearing for silver & gold with an upside breakout today.
US dollar index is ailin'. Lost 89 basis points (0.88%) to 100.32. Y'all ought to look at this chart, http://schrts.co/OkJ5UT
Today the dollar index smashed support about 101.25 then smashed through the bottom boundary of that broadening top pattern. Whoops, left something out. Smashed through its 50 day moving average as well. All this sets the dollar up for a drop to 99 or even 98. As a native & perpetual dollar skeptic, I always thought that dollar rally was trumped up anyway.
Both the yen and the euro have rallied off double bottoms to cross ABOVE their 50 DMA. Euro gained 0.64% to $1.0712 today. Yen leapt 1.67% to 88.78.
Stocks don't seem to be contemplating Trump's inauguration with the same glee they viewed his election. Both challenged their broadening top's upper boundary last week, only to fall back today. S&P500 chart's here, http://schrts.co/OkJ5UT
Maybe the Trump rally was a case of buy the rumor (election), sell the news (inauguration). Indicators I watch, RSI & MACD, both point down. Volume on today's fall was higher than volume Friday on the rise. Somebody's trimming positions.
Dow industrials lost 58.96 (0.3%) to 19,826.77. S&P500 backed down 6.75 (0.3%) to 2,267.89.
More instructive still are the Dow in Gold and Dow in Silver. Dow in Gold chart lieth here, http://schrts.co/8Sv0tc
Behold, since the December high it hath lost 7.3% from 17.62 oz to 16.35 oz today. Along the way it has fallen through the 20 DMA, support from the December 2015 high, & today came to rest against the 50 DMA. Meanwhile the RSI & MACD look heavy, like a big ship taking on water in a stormy sea.
Lo, the Dow in Silver chart, http://schrts.co/ohwLZP
DiS hath tumbled 8.6% since the December high, with ne'er a sign of turning up yet. Both indicators need to drop further to keep confirming a downturn, but they've done a pretty convincing job so far.
I note in passing that the stocks of banks, those vicious, venemous, vile vampires on the commonwealth, sucking the blood of rich, poor, and weak together, plumped down today. They have been enjoying a rallier rally than other stocks because Trump kept promising to remove regulations on the big banks. Today the Bank Stock Index BKX, broke down. Oh, 'tis only a little cloud the size of a man's hand on the horizon, but it broke. Chart shows it, http://schrts.co/gVRdex Tain't comin' back any time soon, either. Hide and watch.
But y'all don't care a hoot for all this, y'all just want to know what silver & gold did today. Okay. On Comex gold rose $16.70 or 1.4% to $1,212.00. Silver pole-vaulted 38.3¢ (2.3%) to 1710.3¢. I reckon that will put a smile on y'all's faces!
Let us ponder gold. Five day chart paints a steady advance from last Friday. More to the point, look at gold's chart, friends, http://schrts.co/AW2KFe
Today gold broke skyward out of that bowl it has been painting since last November. It threw a leg over the lip of that bowl and boosted itself right up. Now it stands above its moving averages and with only a little resistance between here & $1,233, gold has a clear field to $1,270, where it broke down before and where the 200 DMA awaits. It is rising on rising volume, & it don't get much better than that.
Silver is a leetle more complicated. Looky here, http://schrts.co/o96FnV
Silver appears to have traced out the left shoulder of an upside-down head & shoulders. Well, now it has reached the neckline of that pattern, so it's time to ask, "Is this an upside down head and shoulders, or a double bottom?" If a head and shoulders, then it's out of synch with gold. Generally a head and shoulders doesn't amputate one shoulder, but filling out that right shoulder would take another month's trading below the neckline.
Next few days will tell us, because silver is nearing its 200 DMA at 1785¢. Piercing that would argue right loud that silver has traced out a double bottom. Indicators point up and volume is rising, so silver has the right forces pushing it.
But silver premiums are soft. US 90% premium at wholesale has now fallen to the same level (melt + 50¢/oz) as one ounce silver rounds. If you're looking to buy silver, at wholesale we can get 100 oz silver bars for 25¢ an ounce over spot rather than their usual 45¢. Lower premiums suggest not much retail buying.
Where in the world are we? Y'all go back and look at those silver & gold charts. Think back to December a year ago. Both metals made lows then, rallied out of January into July, then corrected from July through December, TO HIGHER LOWS THAN THE YEAR BEFORE. An uptrend is a series of higher highs and lower lows. We got us an uptrend!
The silver & gold lows we saw in December were the lows for the correction. From here, silver & gold will keep gaining, even if they don't run away. Wherefore, 'tis time to get off the sidelines and into the game: buy!
I have to ask y'all's indulgence and your prayers again. On Wednesday, 25 January I have to undergo another surgery on my foot, this time pinning three toes. I'm looking forward to it like a possum looks forward to being skinned, but my frantic mind still has not discovered an excuse solid enough to deliver me from it. I'll have those toes pinned six weeks, but the surgeon assures me I won't have any problem negotiating stairs. However, for Tuesday, Wednesday, & Thursday I will be far enough out of commission to send no commentary. God willing, I will pick back up again Friday, 27 January. Happily I can report that although I won't have Susan to baby me this time, my children have promised to fill the gap. I would deeply appreciate y'all's prayers for a successful surgery and swift recovery. Thanks in advance.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger