The Moneychanger
Daily Commentary
Thursday, 7 December a.d. 2017 Browse the commentary archive

Another little known but quite reliable indicator of market tops & bottoms is the SNARKY EMAIL indicator. The more snarky, sarcastic, scathing and snarling emails I get about how stupid I am to distrust stocks or what a hopeless technophobic caveman to doubt Bitcoin's infinite increase or what a blockheaded moron I must be to believe that silver and gold will ever again rally, the more cosmically certain it is that stocks & Bitcoin are nearing a top and silver & gold their ultimate lows.

Besides, y'all forget. I don't claim to be anything more than a nat'ral born durn fool from Tennessee. That's as high as my ambition reaches. I ain't got enough sense to be bothered when I'm wrong.

But even a fool know that folks buy a rising market -- human nature, crowd behavior. Faster it rises, more they buy, in a self-fulfilling prophecy & buying panic until -- the market runs out of new buyers. Suddenly, the prophecy ceases to be fulfilled, and slams into reverse. Selling panic follows.

Oh, some news may raise hopes yet again, something that will "save" the market & force it even higher. In the spring of 1980 it was Bunker Hunt trying to float silver backed bonds to soak up huge amounts of silver & revive the price. That fell through and the market dropped from $50 to $12.75 quicker than a politician can pick your pocket.

Today Bitcoin buyers are feeding on the rumor that "this is just the beginning, only a few people have gotten in already, soon the institutional money will come flooding in and with it other buyers." The fool would merely point out that until now it has been right easy to BUY Bitcoin, but plumb hard to SHORT Bitcoin. Three exchanges are about to offer Bitcoin futures contracts. When that happens it will be much easier to SHORT Bitcoin, which, no doubt, some of the institutional money will do. Real "price discovery" may result & might discomfit the faithful.

A fool doesn't bear anybody any ill will, but his peculiar job is to point out folly. Sometimes folks sunk deep in folly get ticked when a fool points it out, but that there's an occupational hazard.

Late today when I checked Bitcoin it had hit an intraday high of $16,599.13 & was trading at $16,124.77, up $2,415.78 (17.62%).

US dollar index, whose chart you will find here, has risen through the downtrend line from the early November high and today punched through the intertwined 20 & 50 day moving averages (93.57 & 93.64). It rose 20 basis points (0.2%) to 93.75. If it doesn't tire out right here at the 50 DMA -- and we'll se tomorrow -- it will rise toward 97.

Stocks gained modestly today. S&P500 rose 7.71 (0.29%) to 2,636.98. Dow added 70.75 (0.29%) and closed at 24,211.48.

S&P chart would make me nervous if I owned stocks. Y'all see that little steeple thingy, that spiky looking high. Not always fatal, but nerve wracking.

Gold finally broke down through $1,262 today. Comex gold lost $13.00 (1%) & closed at $1,249.80 Silver also lost 1% or 15.3¢ to 1571.5¢.

I put the Bollinger Bands on this gold chart, so y'all could see that gold slid down the lower Band the last two days, and today fell clean through and closed beneath it. Bollinger Bands lie plus and minus two standard deviations around the 20 day moving average. Statistically, that band ought to contain 95% of possible prices. Further the market moves toward the bands, less likely the price will continue in that direction. That just says a bottom is getting close.

Some lateral support exists around $1,244, but 'tain't much. Strongest support coming up is the uptrend line from the December 2015 low, not about $1,200 - $1,210.

Silver has been sliding down the lower Bollinger Band for seven days, Today its RSI dipped below 30 into oversold territory at 28.71. Volume is drying up, which is hopeful as that happened at the 2015 & 2016 December bottoms. Still, there's nothing on this chart or the indicators that screams, "That's all, folks!"

We have to keep waiting until gold and silver make plain they have finished falling.

Here's a piece of advice for men: You have 16 shopping days left to Christmas. You're going to feel awful when Christmas comes and for your wife you have only an envelope you've hastily stuffed with three hundred dollar bills. Better get that shopping done TOMORROW.

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
7-Dec-17 Price Change % Change
Gold, $/oz 1,249.80 -13.00 -1.03%
Silver, $/oz 15.72 -0.15 -0.96%
Gold/Silver Ratio 79.529 -0.052 -0.07%
Silver/Gold Ratio 0.0126 0.0000 0.07%
Platinum 893.60 -8.30 -0.92%
Palladium 1,016.30 14.75 1.47%
S&P 500 2,636.98 7.71 0.29%
Dow 24,211.48 70.57 0.29%
Dow in GOLD $s 400.46 5.28 1.34%
Dow in GOLD oz 19.37 0.26 1.34%
Dow in SILVER oz 1,540.66 19.30 1.27%
US Dollar Index 93.75 0.20 0.21%
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: 1,245.70      
GOLD Fine Tr.Oz. BID ASK $/oz
American Eagle 1.00 1,265.63 1,287.43 1,287.43
1/2 AE 0.50 634.80 657.11 1,314.21
1/4 AE 0.25 320.51 334.78 1,339.13
1/10 AE 0.10 130.69 136.40 1,364.04
Aust. 100 corona 0.98 1,208.82 1,221.04 1,245.70
British sovereign 0.24 295.44 308.44 1,310.27
French 20 franc 0.19 230.25 234.25 1,254.67
Krugerrand 1.00 1,249.44 1,259.44 1,259.44
Maple Leaf 1.00 1,253.70 1,269.70 1,269.70
1/2 Maple Leaf 0.50 716.28 653.99 1,307.99
1/4 Maple Leaf 0.25 317.65 333.22 1,332.90
1/10 Maple Leaf 0.10 132.04 135.78 1,357.81
Mexican 50 peso 1.21 1,486.80 1,497.80 1,242.26
.9999 bar 1.00 1,250.06 1,257.70 1,257.70
SPOT SILVER: 15.65      
SILVER Fine Tr.Oz. BID ASK $/oz
VG+ Morgan $B4 1905 0.77 22.50 25.50 33.33
VG+ Peace dollar 0.77 15.00 18.00 23.53
90% silver coin bags 0.72 10,760.75 11,046.75 15.45
US 40% silver 1/2s 0.30 4,425.00 4,572.00 15.50
100 oz .999 bar 100.00 1,545.00 1,580.00 15.80
10 oz .999 bar 10.00 158.00 163.00 16.30
1 oz .999 round 1.00 15.45 16.05 16.05
Am Eagle, 200 oz Min 1.00 17.15 18.65 18.65
SPOT PLATINUM: 893.60      
Plat. Platypus 1.00 908.60 938.60 938.60
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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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