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Monday, 23 January a.d. 2012 A joke on the streets of Moscow these days: "Everything the Communists told us about communism was a complete and utter lie. Unfortunately, everything the Communists told us about capitalism turned out to be true." Markets have made their intentions considerably clearer today. Dollar's rolling into the gutter again, stocks are indecisive and faltering, gold & silver are shaking off their worries & marching higher. Let's start with the US Dollar Index. Dealing with all these fiat currencies for me is like having to listen to a long lecture on tapeworms & other internal parasites. Thus I want to get it behind me as quickly as possible. What the dollar is losing, the euro is gaining as the frenzied rats, uncertain which ship will sink first, swim from one ship to the other. Here's the answer to their quandary: BOTH are sinking. Dollar index today lost 67.1 basis points, a meaty 0.86%, to grab a branch at 79.704. Falling through the trap door at 80 sends the dollar much lower, and a fall through 79.50 (probably tomorrow) will only tie anvils to the dollar's feet. Dollar's rally is over for a while. Broke clean through the uptrend line, closed below the 20 day moving average (80.53), & has only barely avoided breaking the 50 DMA (79.45). None of this promises anything other than lower prices for the dollar. It has fallen off the kerb into the gutter. Euro meanwhile has a full load on & has posted two gaps up in the last 3 trading days -- breakaway gap, headed for 132+ resistance. Not clear yet how substantial this rally is, or how long it might last. May constitute no more than a rally before one last spike down, but looks good from here. Momentum points skyward as euro has passed its 20 DMA (1.2889) & is drawing a bead on its 50 DMA (1.3163). Euro closed today up 0.77% at 1.3031. Yen did little today, up 0.08% at 129.93c/Y100 (Y76.96/US$1). Above the 20 DMA (129.62) but looking awfully tame. STOCKS today looked lost & bewildered, some indices up, some down. Confusion promises nothing good as stocks run out of enthusiasm and steam. Dow fell 11.66 (0.09%) to 12,708.82. Broader S&P500 rose 0.62 (get out the magnifying glass) or 0.05% to 1,316.00. Dow acting allergic to 12,750. Last high close came 2 May 2011 at 12,810. That is now doing the same thing to the Dow that Kryptonite does to Superman. S&P500 is also struggling at analogous downtrend line from 29 April 2011 close at 1,363.60. Don't expect either index to reach those last high levels. This will bring great pain to many, & I take no pleasure in reporting it. Stocks are in a primary down trend, & have much, much further to fall in the years before that bear market ends. Today gold climbed $14.30 to $1,678.00. Silver tagged right along and ran out front with a 58.6c rise to 3223.3c. Gold has now reached my $1,680 target area -- high today hit $1,681.25. Gold's present zeal argues that it will rally to $1,705 at least before pausing. Worth noting is that gold's crucial 150 day moving average stands at $1,681.19 today. As a footnote, gold also rose above its 50 DMA (1,669.54). Remember that during this bull market gold has only rarely traded below that 150 DMA, & never for a very long time. If it climbs over soon, it may not touch that 150 DMA for a long time to come. Silver has punched through a resistance line within its trading channel, with one clear goal in mind: reach 3400c. Look for it soon. Silver's 300 DMA, which has been as important to silver as the 150 DMA has been to gold, stands at 3428c today. About the same place stands resistance from last fall's trading. Silver has the bit in its teeth & is running away, above its 20 & 50 DMAs & raging. Keep in mind if you are pondering buying silver or gold that you are not buying for a one or even two or five dollar gain, but a TRIPLE or quadruple. Even a five dollar gain here will look very small in hindsight. Longer you wait to buy, more they will cost. On 23 January 1989 died the flamboyant Spanish surrealist painter Salvador Dali. He must have spent a lot of time waiting in government offices or in jail, as witnessed by his painting, "The Persistence of Memory." http://en.wikipedia.org/wiki/The_Persistence_of_Memory Whatever else you might say about him, he was an unparalleled craftsman and painter. Choice of subjects might leave some questions hanging in your mind, but still quite a painter. On 23 January 1897 Elva Zona Heaster Schue was found dead in Greenbrier County, West Virginia. The resulting murder trial of her husband is the only case in US history where a ghost's testimony helped secure a conviction. On 23 January 1552 the second version of the Book of Common Prayer became mandatory in England. Like it or lump it, the Authorized Version (King James) of the Bible and the BCP formed modern English, as Luther's translation formed the German language. Argentum et aurum comparanda sunt --
-- Silver
and gold must be bought.
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© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission. 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 is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal & I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold & silver on margin or with debt. What DO I recommend? Physical gold and silver coins & bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. Footnotes: The US DOLLAR INDEX is a average exchange rate for the US dollar against the Euro, Yen, Pound sterling, Canadian Dollar, Swiss Franc, and Swedish Krona, weighted for each country's trade with the US. It gives a general measure of the US dollar's performance against all other currencies. The DOW IN GOLD DOLLARS measures the Dow Jones Industrial Average in gold dollars (0.048375 troy oz. by law). The DiG$ 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, & 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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NOTE: The following are wholesale, not retail, prices To figure our retail selling price, multiply "Ask" price by 1.035. To figure our retail buying price, multiply "Bid" by 0.97. Lower commissions apply to larger orders, higher commissions to very small orders.
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The Moneychanger
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| This is not an offer to buy or sell. Prices subject to
change without notice. To enter an order, call us at (888) 218-9226 or
(931) 766-6066.Sorry, no sales to Tennessee. While we are on the telephone, I will lock in a price and give you a contract number. That contract obliges me to sell and you to buy at that locked-in price, regardless what later happens in the market. If you buy when gold stands at $300 an ounce, whether it soars to $1,000 or drops to $100, you still bought it at the price we fixed. If you sell when silver stands at $5.00, you still sold and I still bought at that price whether silver rockets to the moon or it gets so cheap they start paying people to haul it off in trucks like sand. In other words, when you make a contract with us, I am giving you my word, and you are giving me your word, that we will faithfully complete the contract. Just as when you buy stocks or bonds, we cannot change or cancel the order once entered. After you enter your order, you need to send us payment within forty-eight (48) hours by personal check, United States Post Office (only) money order, or bank wire. If you send a check (whether cashier's check, bank check, bank money order or your personal check) we will hold shipment for fourteen (14) days to allow the check to clear. Generally you will receive your order (shipped registered mail or UPS) within three to four weeks from order entry. Against bank wires we ship immediately upon receipt. |