The Moneychanger
Daily Commentary
Wednesday, 29 November a.d. 2017 Browse the commentary archive

'Twas a surpassingly odd day in markets.

Stocks don't make a bit of sense -- huge non-confirmation. Dow Industrials rose a meaty 103.97 (0.44%) to 23,940.68 but the S&P500 fell 0.97 (0.04%) to 2,626.07. Nasdaq fell 1.27% & Nasdaq-100 fell 1.73%. That's a weighty disagreement between the blue chip Dow and the lesser, broader indices. Something smells like mice. Things ain't quite clean if the place smells of mice. Might be cockroaches behind those baseboards, too.

US dollar index may be seen here, http://schrts.co/7DnXjW Mark a meaningful turn here. The dollar index descended to the level of the left shoulder (and first right shoulder) to 92.48, then bounced up. This ain't epochal, and the competing yen & euro are still broken out to the upside, but this dollar strength bears watching.

The chart is yesterday's, because one of the rare things StockCharts does wrong is not publish the day's dollar index chart until after 5:00 my time. Today it fell 5 basis points (0.05%) to 93.17. Keep in mind the dollar is trying to turn up, and you have to watch it like you'd watch a ham left out on the table in the room where your dog is pretending to sleep.

If the Bitcoin bubble did anything other than defy my senses, I'd say it had a bad day, too. Hit a new high at $11,366.99, up from an open at $9.923.44, but collapsed from that intraday high to $9,300.83. Whoa -- a 22.2% range in one day. Gag.

I don't know what time a "closing price" is for Bitcoin, but right now (4:20 central time) it's trading about $10,183.69.

What caused the collapse? People couldn't trade because two big exchanges, Coinbase & Gemini, crashed. Closed, as in can't do business. (Just as an aside, I wonder how a thing can be an all purpose hedge when it's exchanges are so often raided by hackers or closed -- but I am a technophobic worrier.) Part of the constipation appears to be caused by the heaviest traffic day ever. All these events are clues to the skeptical.

As the bubble blows toward the sky, I note headlines that point toward the pricking. CME Group (Comex), CBOE, and now Nasdaq have lately announced they will offer Bitcoin futures. Whoops, that will make it a lot easier to short Bitcoin. Never mind.

By the way, whatever the cause of that Bitcoin trading today, technically it painted the first half of a key reversal, viz., a new intraday high with a lower close. To confirm a reversal, it must close yet lower tomorrow. Sign is useless and false without that next day confirmation.

Just about the time I turn optimistic on silver & gold, they faint. Silver today made a new low, closing Comex 35.4¢ (2.11%) lower at 1645.7¢. Gold coughed up $12.60 (-1.00%) to end at $1,282.

Gold's one day chart shows flat trading above $1,294 until a piano drops on gold's head about 10:30 Eastern. Then it gaps and plunges to $,1282, with ne'er a bounce afterwards.

It's not quite as bad as it sounds. Look, http://schrts.co/AuABbw Gold dropped to the 50 day moving average. This trading has the feel of floor traders smacking gold back and forth to run the stop orders, then raking in their gains, eezy, sneezy, japaneezy. Range trading.

However, look at this silver chart, http://schrts.co/wuajBB This is an end of day chart so the numbers aren't quite the same as Comex, but you can see today silver collapsed out of that even-sided triangle slap to the bottom of the range. This does not presage higher prices, friends. Unless silver turns around tomorrow and re-bounds smartly, 'twill continue lower tomorrow.

Back to a "surpassingly odd day." Dow reaches a new all time high, rises over 100 points, but S&P500 & the Nasdaqs sink. Loud non-confirmation. US dollar begins to rally, then faints. Bitcoin posts what might be a key reversal's first half, gold gets slapped and silver breaks down.

Where you gonna run for cover? Goat milk futures.

On 29 November 1596 King Phillip devalued the Spanish currency. One could quite literally write a world history centering around the oh-so-frequent dates of currency clippings, devaluations, re-issues, redenominations, and every other shift that wicked, thieving governments can resort to. The problem of monetary stability has always plagued mankind with injustice, and when you add banks creating credit/debt, oh my! It is a chasm of chaos. And it proceeds today apace. Banks, banking, & their money is a festering scandal on humanity.

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
29-Nov-17 Price Change % Change
Gold, $/oz 1,282.10 -12.60 -0.97%
Silver, $/oz 16.46 -0.35 -2.11%
Gold/Silver Ratio 77.906 0.891 1.16%
Silver/Gold Ratio 0.0128 -0.0001 -1.14%
Platinum 940.00 -10.10 -1.06%
Palladium 1,009.95 -12.10 -1.18%
S&P 500 2,626.00 -0.07 -0.00%
Dow 23,940.68 103.97 0.44%
Dow in GOLD $s 386.00 5.42 1.42%
Dow in GOLD oz 18.67 0.26 1.42%
Dow in SILVER oz 1,454.74 36.82 2.60%
US Dollar Index 93.17 -0.05 -0.05%
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SPOT GOLD: 1,283.60      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,302.85 1,326.60 1,326.60
1/2 AE 0.50 654.13 677.10 1,354.20
1/4 AE 0.25 330.27 344.97 1,379.87
1/10 AE 0.10 134.67 140.55 1,405.54
Aust. 100 corona 0.98 1,245.60 1,258.18 1,283.60
British sovereign 0.24 304.43 317.43 1,348.45
French 20 franc 0.19 237.25 241.25 1,292.19
Krugerrand 1.00 1,287.45 1,297.45 1,297.45
Maple Leaf 1.00 1,291.60 1,307.60 1,307.60
1/2 Maple Leaf 0.50 738.07 673.89 1,347.78
1/4 Maple Leaf 0.25 327.32 343.36 1,373.45
1/10 Maple Leaf 0.10 136.06 139.91 1,399.12
Mexican 50 peso 1.21 1,532.03 1,543.03 1,279.78
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SILVER Fine Tr.Oz. BID ASK $/oz
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VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 11,389.95 11,675.95 16.33
US 40% silver 1/2s 0.30 4,669.85 4,819.85 16.34
100 oz .999 bar 100.00 1,628.00 1,663.00 16.63
10 oz .999 bar 10.00 166.30 171.30 17.13
1 oz .999 round 1.00 16.28 16.88 16.88
Am Eagle, 200 oz Min 1.00 17.98 19.48 19.48
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PLATINUM Fine Tr.Oz. BID ASK $/oz
Plat. Platypus 1.00 955.00 985.00 985.00
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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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