This Week’s Market Recap from Franklin Sanders

Franklin Sanders - The MoneychangerFed had its officials out swabbing & firing the blarney cannon today. New York FedPrez William Dud — whoops, make that Dudley — said today the Fed should soon be able to raise rates if they are confident it will raise inflation and that employment is stable. St. Louis FedPrez James Dullard — whoops, make that Bullard — said he expected the economy to expand for many more years. “The US economy is going into a boom period.” No, that wasn’t enough. He was also reported as saying that the persistence of low real interest rates was “a puzzle.” Yeah, buddy, a puzzle with one big piece: the Fed suppressing interest rates. If you don’t get it, what hope is there?

Where do they get these people? What happened to the adults? Peter Pan has hijacked the Fed.

But it worked on the stock market. Dow gained 91.06 (0.51%) to 17,823.81 and for the week rose a rosy-cheeked 3.4%. S&P500 today levitated 7.93 (0.38%) to 2,089.17. Today leaves both indices above their 20 day moving averages, poised to keep rising next week. They are, however, running up against the bottom of that upside-down bowl topping formation & tough resistance. If they punch through that bowl bottom, they might even make new highs for the year — before they come tumbling down.http://schrts.co/vLykZN

Here’s the weekly scorecard:

13-Nov-1520-Nov-15Change% Change
Silver, cents/oz.1,420.301,410.60-9.70-0.7
Gold, dollars/oz.1,080.801,076.40-4.40-0.4
Gold/silver ratio76.09776.3080.2110.3
Silver/gold ratio0.01310.0131-0.0000-0.3
Dow in Gold Dollars (DIG$)329.84342.3012.463.8
Dow in gold ounces15.9616.560.603.8
Dow in Silver ounces1,214.201,263.5649.374.1
Dow Industrials17,245.2417,823.81578.573.4
S&P5002,023.042,089.1766.133.3
US dollar index99.0199.670.660.7
Platinum863.50855.30-8.20-0.9
Palladium539.05558.7019.653.6

Scorecard never lies: gold and silver edged down, US dollar index edged up, stocks jumped up, platinum eroded while palladium went wild today.

Dow in Gold rose 0.98% today to 16.56 oz, fiddling at a double top with July but raking razor blades across nerves before it does. Dow in silver closed at a slightly higher new high, 1,264.46 oz, right smart overbought. Holding my breath watching. If the Dow in metals breaks through this double top, stocks would rise a long ways and silver & gold fall or go flat. Here are charts with new outlines, differing from what I have been using,http://schrts.co/usp82f and http://schrts.co/w314tu Both only puzzle. Both formed rising wedges, a pattern that usually revolves downward, both duly broke out downward, but then against all expectation both traded back clean up into the wedge. Both have neared again the wedge’s top boundary. I don’t know. If it’s not a double top, maybe it’s magic. Maybe Harry Potter’s running markets.

US dollar index broke down through its uptrend line yesterday, then traded back up to it today by rising 62 basis points (0.61%) to 99.67. Ain’t much question the dollar has its silver slippers on and wants to dance. Only thing that might stop it would be resistance at the March-April double top around 100.70 – 100.27. Chart will explain,http://schrts.co/DTXQVd

Cowardly euro quickly forked over all of yesterday’s gains and then some. Dropped 0.86% to $1.0646. Hope that nasty thing has a parachute. Yen dropped back only 0.06% to 81.35, but it don’t look none too pert, either.

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West Texas Intermediate Crude is trying to throw a leg over that lower range boundary it fell through 7 days ago, but can’t quite make it. Hard to envision copper not losing more ground, even from its perch at $2.04. Phony inflation-addicted boom of the early 2000s puffed commodity prices all out of shape, & they’re paying now.

Gold scraped off $1.60 to close Comex at $1,076.40. Silver lost 13.6 cents to 1410.6c.

Either silver wrecked today hopes raised yesterday, or its retreat today posted a double bottom with Wednesday. So far it’s not an inspiring performance. Silver must rise above 1440c first, then blast past the top of the former trading range and the 20 DMA, about 1480c, and keep right on moving. Otherwise it is doomed to fall further. Yesterday’s upward twitch did nothing to change the picture.

Gold’s five day/15 minute chart shows that it fell back today to Wednesday night/Thursday morning’s high, about $1,076. So it gave up all of yesterdays gains. $1,086 was the level that stopped it, so becomes the level to watch. Gold trading below $1,075 cancels out any expectation of higher prices. Next week then, a short holiday week and rarely good for metals, is setting up for more flatlining.

Gold & silver markets have gone dead. Rate of descent has slowed, but no momentum exists for a rise. Monthly chart shows gold still skidding down the downtrend line from 2012, with the 20 week moving average, first tripwire of a rise, above at $1,198. Silver’s monthly chart is bumping along the 200 week moving average (1415c) and beneath the post 2011 downtrend line. Falling wedge has been forming since 2013. Nothing to do but wait patiently and calmly. I expect THE bottom in November.

I have lately had cause to re-read G.K. Chesterton’s 1911 “Ballad of the White Horse” about the Saxon King Alfred the Great. I have a hardcover copy published by Ignatius with delightful illustrations & decorations. Face it, I’m sensual. I like to feed my eyes as I feed my mind.

As a Christian living in an age of re-paganization and nihilism, I drank encouragement from Chesterton’s poem in great gulps and mouthfuls. It’s not so long that you couldn’t read it out loud — must be read aloud — to your spouse in a couple of evenings.

There’s no shortage of discouragement and disappointment in the world, I find. I need only turn on National Proletarian Radio or look at internet news thirty or forty seconds before I begin thinking about smothering myself with a pillow. So when I find encouragement, especially from someone brilliant in a like situation, I grab hold and wear it out.

Y’all enjoy your weekend.

Argentum et aurum comparanda sunt —
Silver and gold must be bought.

— Franklin Sanders, The Moneychanger

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