The Moneychanger
Daily Commentary
Monday, 18 September a.d. 2017 Browse the commentary archive

One good thang about being a nat'ral born durned fool from Tennessee is that you ain't embarrassed when things don't go like you thought. Therefore I can look upon markets today and laugh like a mammoth jackass -- at myself.

Stocks have not quite reached a +3% breakout threshold where I could say for sure they are going higher, but 6 new all time highs in 6 days seems to point in that direction. (One of my precious few gifts is "stating the obvious." 'Tain't much, but it's all I got.)

Here's the Dow chart,

Today the Dow Industrials added 63.01 (0.28%) to 22,283.35. Meanwhile the S&P500 rose 3.64 (0.15%) to 2,503.87.

I remain unrepentant, and wax moreso. Stocks are topping. I remember August 2011 when gold day by day, under pressure of a European banking crisis, crept higher & higher. I was nervous then for gold, same as I am nervous today for stocks. That sort of one-way street doesn't run long. More, as fast as stocks are rising, they can fall faster. That's why you always make more money shorting than going long: markets fall faster than they rise.

Besides, I read Michael Lewis' book, Flash Boys, last week. It covers the advent of High Frequency Trading & its affect on the stock market. Basically it created means for High Frequency Traders to milk $22 billion a year out of stock trading without adding any value. Creates a wholly phony market, and, of course, HFT is not limited to stocks, by any means, as we continually witness in the gold and silver markets, and as the indictments for rigging gold, silver, Libor, fava beans and all the rest pile up.

And if you are wondering how stocks can rise day after day, it's because more than 65% of trading is done by HFT traders, and at the end of the day they have no position. They take home no risk because they've already taken home their profits during the day.

I know, though, that as it gets worse & worse we are inching closer & closer to the day it's fixed How, I haven't a clue, but the fatter a tick gets, the more likely he'll be spotted & pulled off.

US dollar index, I have about concluded, has turned down. I mean the primary trend has turned down. Today it closed at 91.83, up 18 basis points or 0.2%, but that up don't amount to a hill of beans. After a little relief rally, the longer term trend is DOWN.

Today gold tumbled $14.10 (1.1%) to close at $1,306.30 on Comex. Silver plunged 54¢ (3.1%) to 1707.1¢.

In one day silver stabbed through its 20 DMA (1756¢) & sank clean to the 200 DMA (1716¢). That leaves 1690 - 1700¢, which resisted silver on the ways up, to support it now.

Gold sank past the $1,310 I expected to the top of the support range at $1,296 - $1,306. This ain't the end of the world just an opportunity to buy cheaper. Y'all might suspect, and you'd be right, that some sort of durned old government/central bank cloud is be-shadowing this scene. Wednesday the Federal Reserve's FOMC will announce a decision about shrinking its balance sheet and raising interest rates. Most observers expect the chicken-livered academics at the Fed won't dare raise rates, but they might begin some token reductions in the Fed's bloated balance sheet.

My point? Silver & gold are wincing in anticipation of what the pasty-faced, soft fingered goofs at the FOMC will do. History showeth that right after they announce whatever gibberish they announce, especially if they RAISE interest rates, that's a good time to buy gold. That is, it hits a low and then the price climbs and leaves that low behind.

I'm having sort of a liverish day. I know I should remain philosophical as a dead pig in the sunshine in the teeth of the grotesque stupidities and evils of our time, but governments & central banks just start my bile -flowin'. I'll try to be nice tomorrow.

On 18 September 1882 the Pacific Stock Exchange opened, and it suddenly became possible to cheat investors on either US coast.

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-Sep-17 Price Change % Change
Gold, $/oz 1,306.30 -14.10 -1.07%
Silver, $/oz 17.07 -0.54 -3.07%
Gold/Silver Ratio 76.522 1.546 2.06%
Silver/Gold Ratio 0.0131 -0.0003 -2.02%
Platinum 960.30 -10.70 -1.10%
Palladium 934.95 7.55 0.81%
S&P 500 2,503.87 3.64 0.15%
Dow 22,283.35 63.01 0.28%
Dow in GOLD $s 352.63 4.75 1.37%
Dow in GOLD oz 17.06 0.23 1.37%
Dow in SILVER oz 1,305.33 43.60 3.46%
US Dollar Index 91.83 0.18 0.20%
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: 1,306.90      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,313.43 1,323.43 1,323.43
1/2 AE 0.50 659.48 671.23 1,342.46
1/4 AE 0.25 333.00 339.65 1,358.62
1/10 AE 0.10 134.51 138.51 1,385.08
Aust. 100 corona 0.98 1,271.42 1,281.02 1,306.90
British sovereign 0.24 305.64 311.14 1,321.77
French 20 franc 0.19 241.56 246.56 1,320.61
Krugerrand 1.00 1,316.90 1,324.90 1,324.90
Maple Leaf 1.00 1,306.90 1,316.90 1,316.90
1/2 Maple Leaf 0.50 663.25 675.65 1,351.30
1/4 Maple Leaf 0.25 333.00 339.65 1,358.62
1/10 Maple Leaf 0.10 134.94 139.29 1,392.87
Mexican 50 peso 1.21 1,559.97 1,570.97 1,302.95
.9999 bar 1.00 1,308.90 1,320.90 1,320.90
SPOT SILVER: 17.23      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 21.00 24.00 31.37
VG+ Peace dollar 0.77 14.50 17.50 22.88
90% silver coin bags 0.72 12,065.63 12,351.63 17.28
US 40% silver 1/2s 0.30 4,904.38 5,052.38 17.13
100 oz .999 bar 100.00 1,697.50 1,750.50 17.51
10 oz .999 bar 10.00 170.75 175.75 17.58
1 oz .999 round 1.00 17.18 17.73 17.73
Am Eagle, 200 oz Min 1.00 18.78 19.18 19.18
SPOT PLATINUM: 960.30      
Plat. Platypus 1.00 958.30 1,005.30 1,005.30
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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.
  • 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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