I'm back from Virginia alive, and there was plenty of entertainment in markets while I was away: silver & gold still rangebound but US dollar index broke and interest rates rising while junk bonds tank. Mmmm.
First look at the slothful, scrofulous US dollar index chart, http://schrts.co/LzhRuX
I've added a bar to show today's trading, 94.54 to 93.74, with a close 54 basis points (0.57%) lower at 93.74. A clean crack of 94 support, a fall out of the congestion zone, and a fall through the uptrend line. Are y'all surprised that the Euro rose 1.06% to $1.1793? Or that the Yen rose 013% to 88.15?
Meanwhile US interest rates, which had fallen to mid-month, gapped up Friday through their 20 DMA to recent resistance (purple line). Y'all don't just sit there staring, interest rates are the jugular vein of markets and the economy. Go look at the chart, http://schrts.co/LzhRuX
Got the picture? Now go look at this junk bond ETF called HYG, http://schrts.co/6xmqJu See how it has tumbled since 23 October? And how it gapped down once it fell through the last low. It's lost 1.5% since 1 November, which doesn't sound like much, but look: it has fallen out of the upward channel, gapped down, and fallen through the 50 DMA. Something's cooking, and it don't smell tasty. Whoops -- junk bonds, being risk-heavy, tend to move the same way as stocks.
Here's the Dow Industrials chart, http://schrts.co/Q6KUW0
Notice that it threw over the upper wedge boundary, then walked through that line sideways. Now it has fallen through the 20 DMA, and about 23,200 it will reach the last spot where it gapped up. In words plain and few, it has rolled over earthward. Mark how volume increaseth as price falls, a promise of lower prices.
Today the Dow lost 30.23 (0.135) to 23,271.57 & the SP500 dropped 5.97 (0.23%) to 2,578.87. Maybe this is no more than a correction. In a manic market blowing off, it's impossible to pinpoint when it will break, but it will, whether soon, before year end, or in first quarter 2018.
Bitcoin behaved very strangely over the weekend. An seething controversy rages within the Bitcoin community between those who want changes made to support more rapid transactions (so Bitcoin can function as currency) and those who don't.. Those who do floated a new cryptocurrency, Bitcoin Cash, that supports more rapid transactions. Over this last weekend trading was nuts. From $7,707.40 on 8 November Bitcoin sank to $5,636.50 on 12 November, down 26.9%. Bitcoin cash, meanwhile surged from $630 to $950 in 24 hours. Today it's at $1,305.60.
I note for all the deaf ears out there that markets often top with a sudden collapse -- say, 26.9% -- followed by a sudden recovery to the old high or even higher. That double top often marks the point of death. And it is typical of topping markets that "cats & dogs fly last." That is, the cats & dogs (the penny stocks, the small stuff) make huge gains -- like up 50% in 24 hours -- as buyers look for something to buy other than blue chips and bid them up.
But durn! I don't know sic' 'em from come here. I'm just a natural born durn fool from Tennessee who don't even know how to spell Eelektronik.
Just about the time you thought silver & gold would break down without remedy, they snapped back. Today gold rose $1,281.50 (.3%) to $1,281.50. Silver added 2.9¢ (0.2%) to 1705.2¢.
Behold, the gold chart, http://schrts.co/sZCTNH
The endless battle with the 20 day moving average continues, but today gold won. Today's jump showed a respectable pop in volume -- so far. MACD and RSI indicators point to higher prices. Still looking over my shoulder. Gold won't be in the clear until it rises first above this range top ($1,300) and next above that purple line at $1,360. Tremors in stocks may be driving money into gold.
Now consider silver, http://schrts.co/o96FnV
Last two days silver tried to break that little green line marking the uptrend, but today decisively turned up and closed above the 20 DMA. So far, so good, but we've been whipsawed here so often in the last month, between 1660¢ and 1725¢ that silver has right nigh worn us to a nubbin.
Here's an excellent article from the Mises Institute, Federal Prosecutors are Running Amok, at http://bit.ly/2zY5s0C This will introduce you to sociopathic behavior by federal prosecutors. Unless you have ever been the victim of their attentions, you would not believe it.
Speaking of lawyers, did y'all hear about the two lawyers who were close friends? One of them suddenly announced to the other one that he had begun teaching Sunday School. The other one was shocked. "What are you doing? You don't even know the Lord's Prayer!"
"Sure I do," said the Sunday School teacher, "Now I lay me down to sleep . . ."
"Wow," said the other lawyer, "I never knew you knew that much about the Bible."
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger