'Twas, as I will explain, a rotten week for silver & gold, but the numbers above already show it. US dollar index struggled to gain 4 basis points for the week, but stocks kept on climbing, barely.
Lets' start with eh US dollar index, and get the most unpleasant things out of the way first. At last today the dollar index attempted to break out of its congestion zone, http://schrts.co/6UeNYz To ended at 94.86, up a hefty 33 basis points (0.35%) and is tucked smack under that downtrend line from the July high. Next week it ought to crack that line and move toward the 200 DMA target (about 97). Looks like silver & gold will find no relief next week.
On dwindling volume the Dow edged to a new high today, as did the S&P500. Dow chart can be found here http://schrts.co/Q6KUW0 Dow added 22.93 (0.1%) to 23,539.19 and the S&P500 edged up 7.99 (0.31%) to 2,587.84.
Overbought can always get overboughter. Dow continues to crawl up that upper wedge boundary it threw over mid-October. RSI is painfully overbought, and MACD has actually turned down. How long can it rise? Until it stops. And that ought to be soon.
These are just numbers and not targets or forecasts, but I looked at the Dow/Gold's drop from 42.39 in 1999 to 5.71 oz. in 2011. Markets often correct by a Fibonacci 38%. If you take 38% of that difference and add it to the low, you get a "target" of 19.65 oz. Today the market's at 18.55 oz. With the Dow at 24,000 a Dow/Gold of 19.65 oz. implies a gold price at $1,221.40. Y'all listen, now, this is not a forecast or target, just a meditation with numbers.
For what it's worth inflation-driven markets other than silver & gold are pulsing with life. Oil (WTIC) is working at breaking out through 55 resistance, http://schrts.co/yo3oi4 Copper has been steadily climbing sink 2015 began, http://schrts.co/VybVS8 CRB commodity index is promising to break upside out of a flat-topped rising triangle. http://schrts.co/SMf1fF
But not silver & gold. Today silver & gold gave back those big Wednesday gains, and proved that move a fluke or simple run to the top of a still ruling range. Comex gold lost $8.40 (0.7%) for a close at $1,266.50. Silver gave up 30¢ (1.8%) to 1679.4¢.
The gold/silver ratio which gapped down so bravely on Wednesday gapped UP today, through the 20 & 50 DMAs. http://schrts.co/kh9gOy
The one day silver chart, http://bit.ly/2xLkma8 shows the magic that happened when silver took a run at 1720¢ about 11:30: massive selling counterattack took silver gapping down to 1680¢ by 1:00. I won't even conjure up Nice Government Men to explain this. Silver was weak at the top of the range and sellers hit it. It broke. No more buyers until 1680¢. Premiums on physical silver and the dearth of our business say that presently there's just very little interest in silver or gold.
The three month silver chart, http://schrts.co/tHTA2Q makes plain silver's trajectory from the bottom of the 1650¢ - 1720¢ range on 26 October to the top of the range Wednesday. Next stop? Bottom of the range, or breaking through that support. It will be the third visit, and third try's oft the charm.
Gold's one day chart, http://bit.ly/2q1vAly shows the same course. Gold reached toward $1,280 & an anvil was dropped on its head By 1:00 it had fallen from $1,278 to $1,266. Once again, look at the three month chart, http://schrts.co/QCj6Qa Gold is plainly trapped beneath the 20 DMA ad being squeezed toward support at $1,262. The 200 DMA also lieth there. If it breaks $1,262 then it falls toward $1,220.
I only report the news, I don't enjoy it.
We are back to that same expectation: a rising dollar hampering silver & gold till mid-November. Don't lose patience or hope. After all, silver & gold have both the Federal Reserve and the almighty yankee government working for 'em, cranking out that new money and blowing up those deficits as fast as they can. Before too long that will show in silver & gold's prices
Probably not much to y'all's surprise, we found out today that behind all the loud talk of democracy and self government in Spain and the European Union there actually stands: a truncheon. Spanish government today answered Catalonia's calls for democracy & self government with: an arrest warrant for the Catalan leader. Others have already been arrested.
Watch what people do, not what they say.
Bitcoin closed today at $7,191.02. Y'all are probably tired of me warning about markets gone parabolic, but they always end in tears, gnashing of teeth, and pulling of hair. This time is never different.
Chart is here, https://www.coindesk.com/price/ You can set it to periods from one hour (1h) to 1 year to All data ("All"), which begins in 2010. Set it to "All" and tell me that's not a parabolic chart.
I took the month opening prices for the last two years. The rate of change between August & September was +80.7%. Between October & November, +54%, between 1 October & today, +63.6%. Year over year rate of change has moved from +125% in January 2017 to +886% today.
Does anybody REALLY believe that such growth rates can continue? The spirit of Carlo Ponzi is alive and well on the internet.
Assuming no sudden collapse, a top usually comes as a sharp break, then a recovery to the top followed by a lasting collapse. If you own Bitcoin, set yourself a mental stop to sell at that second peak. Better yet, use a mental trailing stop, pulling that stop higher every day until the market on some dip hits your stop and you get out.
My granddaddy tole me, "Son, it ain't NEVER different this time."
Because I don't follow those markets closely I haven't said much about palladium's one and a half year surge against platinum. Here is the spread, palladium price less the gold price, http://schrts.co/N6XS6N
Makes you gasp. From $502.30 BELOW platinum in July 2016 palladium has climbed to $66.20 ABOVE platinum, a $568.50 climb in about 18 months. Back this summer palladium futures contracts were backwardated over $10 (spot month over nearby active month) and are still backwardated $1.40. Backwardation shows a high demand for immediate delivery. I don't know what is driving this, but it is eye-catching.
Last time this happened was in 2001 when a Ford made a bad decision & were fed palladium by the Russians who produce about 45% of the world's palladium & had a big stockpile. That drove palladium to $1,090. Right now palladium is only dimes away from breaking through $1,000.
Here's a 20 year chart of the palladium - platinum spread, http://schrts.co/hHEkiu
Here's the palladium chart since 1980. http://schrts.co/Lhounj I'd like a better grip on the reasons for the recent surge before I considered buying an breakout above that channel line. Note the swings from $1,020 to $14.50 ad from $165 to $862. Gonna need some rock hard nerves to trade palladium.
I had to drive to Nashville this morning -- 2 hours --- so on the way out the door grabbed an audio book of C.S. Lewis' Mere Christianity. It was vastly more engaging than I remembered from 30 years ago -- maybe I was too ignorant to appreciate it then. Today I am still ignorant, but a little less so.
Lewis mentioned the 7 Cardinal Virtues. Faith, hope, and love are the particularly Christian virtues, but the so-called "natural virtues" are common to every civilization: Prudence, Temperance, Justice, and Courage (Fortitude).
Prudence is common sense, knowing what to do and when to do it. Temperance is not tee-totaling, but "right use in right measure." Justice we call "fairness," giving every person and act what it is due. Finally courage is being able to face and overcome fear.
Suddenly a ton of bricks dropped on my head: Susan NAILED all of those. Her judgment about what needed to be done was always sound, she was the only naturally temperate person I have ever known, amazing self-control, she was always fair but strict, and she had more moral and physical courage than anyone I have ever known.
Oh, Susan certainly wasn't perfect (don't think that), and my writing about this would probably embarrass her, but remember that the natural virtues don't come naturally. They have to be deliberately, assiduously cultivated. I know, partly from experience and partly from transcribing 10 years' worth of her prayer journals, how stubbornly she pursued those virtues, as well as faith, hope, and love.
I don't tell y'all this simply to torture you by invidious comparison, but to encourage y'all by her example. Rather than making me measure my own shortcomings to my misery, her example lifts me up and encourages me to conform myself to Christ's image. And that's no burden, it's a joy.
Y'all enjoy your weekend.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger