The Moneychanger
Daily Commentary
Thursday, 2 March a.d. 2017 Browse the commentary archive

Wowch! Silver got coldcocked today, and gold nearly flattened. Stocks got sucker punched, too. Only the scrofulous dollar escaped.

The US dollar index rose 38 basis points (0.37%0 to 102.16. Here's a chart, which speaketh louder than all my words,

In trading, as in war, there are times to tough things out and times to tuck tail and run. Survivors can tell the difference. Reason I say that is the US dollar index chart is either pushing as high as it's going to push, or I'm wrong & it's about to head for 106.

Y'all can see that the Dollar index today pushed into that hazy green line from the left shoulder. If it pushes much further, 102.50 - 103, then it might invalidate that head & shoulders interpretation. If that interpretation is right,though, y'all better hold on and shuck dollars because it will fall at least to 97.5.

Y'all gonna stay in this foxhole or not?

Not much of a surprise that after yesterday's 303 point pole vault, the Dow today fell 112.58 (0.53%) to 21,002.97. Somebody took the Tequila off the trading floor. S&P 500 fell 14.04 (0.59%) to 2,381.92.

Here's the chart for the S&P500,

Mark well I am NOT yet calling this an island reversal, but the gap up and today's trading are painting out what MIGHT be an island reversal. If 'tis, S&P500 will trade sideways without filling that gap, then suddenly gap down and plunge.

While y'all are looking, notice how overbought that RSI is and how long it has been overbought.

Oh, mercy. Silver plunged from 1830 to 1770¢ from 1:00 to 2:00 p.m Eastern. Lost 73.8¢ or 4% on Comex, closing at 1770.5¢. Gold dove $17.00 (1.4%) to $1,231.90. Gold plunged the same time silver did, from $1,242 to $1,232.

Don't that make y'all curious. But then, we all know markets are incorruptible, all straight up and fair beyond questioning, no manipulation. But it's an ill wind that blows no good, and today's storm made silver a lot cheaper, and a better buy today than yesterday.

How much damage did today's submersion do? Look at silver,

Today's fall took silver below 1800¢ resistance and all the way to the red downtrend line from the July high and the uptrend line from the December low. That promises solid support. More than that, I keep seeing that silver is in a rally leg, so that would forbid any bloody correction here. If present support did give, silver would fall back to that neckline, about 1730¢.

Now y'all go look at gold,

Gold poked down through its 20 Day Moving Average, but remains above that bowl lip at $1220. More to the point, look at the green uptrend line from December's low. Gold today stopped cold right there. Low came at $1,231.10. I reckon there are plenty of buyers down around $1,232 and lower.

Over 36 years I have observed that most folks won't buy when a market is falling & touches a support or uptrend line, which is the lowest risk place to buy. However, they will enthusiastically buy any long-time rising market, the riskiest place to buy -- witness stocks today.

I promise I won't say anything else, but silver & gold are both better buys today than they were yesterday, and yesterday they were spectacular buys.

I wonder if prayers persist. I've started transcribing Susan's prayer journals. She didn't write in them every day, but often enough for the last ten years. She prayed for our children especially, but also for many others, family and not family and friends.

So I wonder if prayers persist. That is, do we just fling them out and they fly into the ear of God and he hears and they dissipate? What if that's all wrong? After all, God dwells in eternity, not in time. Impossible to understand, but for God all things are known, all events equally seen and known simultaneously. God is not bound in time.

What about our prayers? When Susan prayed for our children, for herself, for me, for others, did it go up and evaporate? Or do our prayers keep on echoing in eternity, still pleading, still interceding, still accomplishing God's will?

Oh, if they do, how much mightier, how much more crucial, are our prayers!

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
2-Mar-17 Price Change % Change
Gold, $/oz 1,231.90 -17.00 -1.36%
Silver, $/oz 17.71 -0.74 -4.00%
Gold/Silver Ratio 69.579 1.862 2.75%
Silver/Gold Ratio 0.0144 -0.0004 -2.68%
Platinum 988.40 -29.00 -2.85%
Palladium 769.25 8.80 1.16%
S&P 500 2,381.92 14.04 0.59%
Dow 21,002.97 -112.58 -0.53%
Dow in GOLD $s 352.44 2.93 0.84%
Dow in GOLD oz 17.05 0.14 0.84%
Dow in SILVER oz 1,186.27 41.36 3.61%
US Dollar Index 102.16 0.38 0.37%
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: 1,234.20      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,265.06 1,274.31 1,274.31
1/2 AE 0.50 635.10 649.81 1,299.61
1/4 AE 0.25 323.72 331.69 1,326.77
1/10 AE 0.10 129.49 135.14 1,351.45
Aust. 100 corona 0.98 1,200.69 1,209.69 1,234.13
British sovereign 0.24 292.71 305.71 1,298.68
French 20 franc 0.19 230.43 236.43 1,266.34
Krugerrand 1.00 1,247.78 1,257.78 1,257.78
Maple Leaf 1.00 1,244.20 1,257.20 1,257.20
1/2 Maple Leaf 0.50 709.67 647.96 1,295.91
1/4 Maple Leaf 0.25 314.72 330.15 1,320.59
1/10 Maple Leaf 0.10 130.83 134.53 1,345.28
Mexican 50 peso 1.21 1,474.56 1,485.56 1,232.11
.9999 bar 1.00 1,234.20 1,246.20 1,246.20
SPOT SILVER: 17.73      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 26.00 33.99
VG+ Peace dollar 0.77 16.00 18.00 23.53
90% silver coin bags 0.72 12,533.95 12,891.45 18.03
US 40% silver 1/2s 0.30 5,038.60 5,188.60 17.59
100 oz .999 bar 100.00 1,763.00 1,788.00 17.88
10 oz .999 bar 10.00 178.80 183.80 18.38
1 oz .999 round 1.00 17.98 18.28 18.28
Am Eagle, 200 oz Min 1.00 18.73 19.98 19.98
SPOT PLATINUM: 988.40      
Plat. Platypus 1.00 983.40 1,028.40 1,028.40
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© 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.

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