The Moneychanger
Weekly Commentary
Friday, 18 August a.d. 2017 Browse the commentary archive
Here's the weekly scorecard:
  11-Aug-17 18-Aug-17 Change % Change
Silver, cents/oz. 1,704.10 1,698.00 -6.10 -0.4
Gold, dollars/oz. 1,287.70 1,285.70 -2.00 -0.2
Gold/silver ratio 75.565 75.718 0.154 0.2
Silver/gold ratio 0.0132 0.0132 -0.0000 -0.2
Dow in Gold Dollars (DIG$) 350.90 348.49 -2.41 -0.7
Dow in gold ounces 16.97 16.86 -0.12 -0.7
Dow in Silver ounces 1,282.69 1,276.47 -6.22 -0.5
Dow Industrials 21,858.32 21,674.51 -183.81 -0.8
S&P500 2,441.32 2,455.25 13.93 0.6
US dollar index 92.26 93.36 1.10 1.2
Platinum 987.20 979.60 -7.60 -0.8
Palladium 899.70 929.50 29.80 3.3

Y'all will look back & recognize later that this was the week stocks broke. Technically it was a down week for silver & gold, but that overlooks their recovery from the attack that beat gold back to $1,272.70 & silver to 1656¢. They are now positioned to break through mighty resistance. Platinum had a week like gold and silver but palladium just kept kicking higher. US dollar index is stuck in the mud but is trending up and is above its 20 DMA.

Y'all search out the US dollar index chart right here, http://schrts.co/OkJ5UT

It bottomed on 2 August at 92.39 and has since wobbily climbed, forming an uptrend and a flat topped rising triangle. These patterns usually resolve to the upside, so that plus the indicators all pointing higher suggest the US dollar is about to rally.

Meanwhile, whether it makes sense or not, the Japanese yen has broken out upwards. Look for yourself, http://schrts.co/UuqBFa

The euro, on the other hand, looks like my end-of the summer cucumber plant out my back door -- thin and wasting. Three over its upper channel boundary, and failed, fell back into the channel and now has plunked through the 20 DMA. http://schrts.co/UuqBFa

After a 274 point loss on Thursday, the Dow Industrials lost another 76.22 (0.35%) Friday to close at 21,674.51. After a 38.05 loss Thursday, S&P500 fell another 4.46 (0.18%) to 2,455.25.

The stock goose is cooked, roasted, and done. Dow chart's here, http://schrts.co/Q6KUW0 S&P500 right here, http://schrts.co/vtdPMb

Observe the clearer S&P500 chart. It traced a megaphone or broadening top. Within that was a rising wedge. It fell through the 20 DMA on 9 August, then crashed on 10 August plumb through the 50 DMA. Inevitable rally carried it back up to the wedge's lower boundary & 20 DMA where it had broken down, kissed good-bye, ten plunged again through the 50 DMA for lower lows the last two days. It will hit the uptrend from the 2/2016 low about 2,405, and probably stage a little rally there before continuing its plunge through that uptrend.

Here's the Volatility Index chart, http://schrts.co/vtdPMb It measures smugness -- the more complacent the market, the lower the VIX. When the market panics, volatility shoots up. It has lately shot up to that red downtrend line stretching back to August 2015. Rising trend suggests nightmares ahead for stocks.

No, Louise, no, it WON'T be different this time. It never is.

Gold Friday finished down pennies on the week and on the day, as did silver. Comex gold lost 70¢ to $1,285.70. Silver lost a nickel to 1698¢.

I apologize for a right complicated gold chart, but here 'tis anyway, http://schrts.co/XoNfbY

I want y'all to notice the uptrend from December 2015. With the downtrend from July 2016 gold has formed an even sided triangle and has already broken above that downtrend line.

More, gold has thrice knocked at the $1,300 ceiling, and triple tops don't happen. Third time is the charm, so gold ought to break through $1,300 soon, maybe next week.

Miss not, yea, do not over look the downtrend from the 2011 high that floats a short ways above. Right now that will hit gold about $1,320. Why am I all lathered about that? It will be the final confirmation that Gold's 2011-2015 correction has ended and been left behind us. By the way, the weekly and monthly charts agree with that upward breakout.

Silver's even more complicated chart is here, http://schrts.co/9U5L7r

Much like gold, silver bottomed in December 2015, made a new high for the move in July 2016, and formed an even sided triangle -- but silver is always more complicated, because it's more volatile. Just before the 7 July low silver staged a false downside breakout, and has since recovered and climbed over that uptrend line from the 2015 low. Now it's stuck beneath resistance at 1725¢ and the overhead 200 DMA (1709¢).

When silver rallies it doesn't jump, it explodes. It will gobble up that distance between 1725¢ and the last high at 1866¢ in nothing flat. Whether this move takes hold for silver & gold next week or in September -- y'all listen now -- it is coming. Now is the time to hop on.

I was amused -- like a man telling a joke on a gallows -- this week to see that the high muckety-mucks of Google and such like internet companies were wrapping themselves in the cloak of self-righteousness for kicking off neo-Nazi websites. Why? They are hypocrites chasing public approval, and this gesture costs them absolutely nothing. They have decided they are against the "evil" of Nazism -- wow, there's a dead dog to kick. However, the are tightlipped & silent the evils that fill their coffers or earn them cheap approval, like pornography and abortion, which has killed way more Americans than Hitler killed Jews or Stalin killed Russians or Mao killed Chinese.

So y'all will pardon me if I sneer at such tin-plated heroism. Nazism is almost as big a threat to this country as athlete's foot.

As to the attack on the South and Confederate monuments, you are watching Orwellian thought control being installed, every bit as bad as Nazism or Soviet Communism. Sooner or later they'll come for you, too. Seems the ignorant Social Justice Warriors don't know that Robert E. Lee had freed all his slaves before the war. Also, it's instructive to see that the folks leading the charge aren't quite Southern. Virginia governor Terry McAuliffe is a carpetbagger from New York. And Charlottesville's scalawag mayor Mike Signer grew up in Occupied Northern Virginia, so he might as well have grown up in New York, too.

Count on it: this is about thought control & brainwashing & fear, not racism.

Upstairs in my house there hangs a blouse framed on the wall, a blouse Susan made. In 1978 we bought a house in mid-town Memphis that had been built in 1904. Next door lived a widow and her mother, whom we called Ma and Mimi. They adopted our (at that time) three children. Their favorite was Worth, then 2 or 3 and the youngest. Whenever he got mad at Susan he's sneak over to Ma and Mimi's where they would cuddle him and make him popcorn. But then, everybody loved Ma & Mimi.

Mimi gave Susan a very old long petticoat made of panels of the finest translucent cotton between streamers of lace. Before we married Susan's daddy named her "Hot Needle Hattie" because an hour before she was supposed to leave on a date, she'd start cutting out a dress and have it finished in time to leave.

So that old petticoat challenged Susan's sewing skills. Out of it she cut and sewed an exquisite blouse she wore for years.

That was some cloth in that petticoat. When it began to wear out a couple of years ago, Susan was thinking about discarding it, but I suggested she have it framed, to remind her of Ma and Mimi.

Susan knew that everything useful needed to be beautiful as well. Wherever she was, she made beauty all around her.

Y'all enjoy your weekend.

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
18-Aug-17 Price Change % Change
Gold, $/oz 1,285.70 -0.70 -0.1
Silver, $/oz 16.98 -0.05 -0.3
Gold/Silver Ratio 75.718 -0.039 -0.1
Silver/Gold Ratio 0.0132 -0.0000 -0.3
Platinum 979.60 0.70 0.1
Palladium 929.50 0.45 0.0
S&P 500 2,455.25 -4.46 -0.2
Dow 21,674.51 -76.22 -0.4
Dow in GOLD $s 348.49 -1.00 -0.3
Dow in GOLD oz 16.86 -0.05 -0.3
Dow in SILVER oz 1,276.47 -0.73 -0.1
US Dollar Index 93.36 -0.17 -0.2
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: 1,284.40      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,290.82 1,300.82 1,300.82
1/2 AE 0.50 648.12 661.47 1,322.93
1/4 AE 0.25 328.87 335.55 1,342.20
1/10 AE 0.10 136.68 139.36 1,393.57
Aust. 100 corona 0.98 1,247.64 1,256.64 1,282.02
British sovereign 0.24 304.62 317.62 1,349.26
French 20 franc 0.19 237.40 241.40 1,292.98
Krugerrand 1.00 1,289.54 1,299.54 1,299.54
Maple Leaf 1.00 1,288.25 1,298.25 1,298.25
1/2 Maple Leaf 0.50 738.53 674.31 1,348.62
1/4 Maple Leaf 0.25 327.52 343.58 1,374.31
1/10 Maple Leaf 0.10 136.15 140.00 1,400.00
Mexican 50 peso 1.21 1,534.54 1,545.54 1,281.86
.9999 bar 1.00 1,282.40 1,294.40 1,294.40
SPOT SILVER: 16.93      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 20.50 24.50 32.03
VG+ Peace dollar 0.77 14.50 17.50 22.88
90% silver coin bags 0.72 11,961.95 12,247.95 17.13
US 40% silver 1/2s 0.30 4,817.35 4,965.35 16.83
100 oz .999 bar 100.00 1,683.00 1,723.00 17.23
10 oz .999 bar 10.00 168.30 295.78 29.58
1 oz .999 round 1.00 16.88 17.31 17.31
Am Eagle, 200 oz Min 1.00 17.68 18.93 18.93
SPOT PLATINUM: 979.60      
PLATINUM Fine Tr.Oz. BID ASK $/oz
Platinum Platypus 1.00 997.60 1,019.60 1,019.60
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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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