• If Gold Price can Work Through $1,308, it Would be Scary – Markets Would be Saying Something REALLY Terrible Lies Just Ahead


    14-Jun-16 Price Change % Change
    Gold Price, $/oz 1,285.60 1.20 0.09%
    Silver Price, $/oz 17.41 -0.02 -0.10%
    Gold/Silver Ratio 73.843 0.145 0.20%
    Silver/Gold Ratio 0.0135 -0.0000 -0.20%
    Platinum 971.50 -23.40 -2.35%
    Palladium 536.55 -10.10 -1.85%
    S&P 500 2,075.32 -3.74 -0.18%
    Dow 17,674.82 -57.66 -0.33%
    Dow in GOLD $s 284.20 -1.19 -0.42%
    Dow in GOLD oz 13.75 -0.06 -0.42%
    Dow in SILVER oz 1,015.21 -2.26 -0.22%
    US Dollar Index 95.07 -0.21 -0.22%

    My friend WR pointed my attention today to the Volatility Index (VIX). Ponder the chart here, http://schrts.co/7EH0kS 
    Volatility index measures investor confidence in stockd on a scale from smug (low) to demoralized terror (high). Like flocks of birds or schools of fish turning on a dime, the investor herd occasionally panics & runs for the cliffs. Note the red arrow on the chart, pointing to where the VIX gapped up last August, right before the VIX launched to the moon & the stock market tanked. It rose so sharply & fast that it punctured the top boundary of the 32 high/11.50 low range that had ruled since 2012. 
    Then the pendulum swung back to complacency last November and December, but began creeping up as stocks fell off the cliff in January & February. VIX settled back into a low range of smugness. Whoops. Two days ago it shot higher, blowing past the 200 day moving average and not slowing down. 
    The VIX’s trajectory is warning that a stock plunge looms right ahead. Argue with a chart at your own peril. 
    Here’s the same chart with the S&P500 superimposed. Notice how the S&P500 falls into a manhole when the VIX shoots up. http://schrts.co/Prmbxo 
    But y’all don’t pay me no mind. I’m jes’ a nat’ral born durn fool from Tennessee. How could I possibly notice anything them New York smarties missed? 
    Stocks continued to submerge today, but aided by NGM friends right at 3:00 p.m. recovered a bit toward day’s end. Dow lost 57.66 (0.33%) to 17,674.82. S&P500 backed down 0.18% (3.75) to 2,075.32. 
    US dollar index finally found some spine and rose 65 basis points (0.69%) to 95.07. Wonder how that dollar will hold up when Brexit is passed & the S&P500 is tunneling toward the earth’s core like some gigantic mutant mole? 
    Technically that does put the dollar index up above its 50 & 20 day moving averages, that is, momentum is up. Yet the dollar is approaching the 95.50 area where it fainted & fell last time. 
    Euro took the hit today, losing 0.75% to $1.1208. If the UK leaves the EU, the union will fly apart, sending whole countries flinging through the sky. 
    Comex gold gained only $1.20 to $1,285.60 while the silver price backed off 1.8¢ to 1741. 
    Gold traded from $1,278.60 to $1,293 today. It rose to a peak about 10:30, then sellers drove it back to $1,280 by 1:30. At least, that’s what a daily chart shows, but it didn’t feel that way. Every time gold dropped today, it bounded right back. Still, its rise slowed today, and it has reached the area of maximum resistance so it is slogging, maybe stopped. Frankly, if gold can work through this & clear $1,308, it would be scary. Markets would be saying something REALLY terrible lies just ahead. 

    Silver has reached the sticky resistance, too. Up above the big hurdle is 1806¢.

    Aurum et argentum comparenda sunt — — Gold and silver must be bought.

    – Franklin Sanders, The Moneychanger

    © 2016, 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.  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 and 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 and silver on margin or with debt.

    What DO I recommend? Physical gold and silver coins and bars in your own hands.

    One final warning: NEVER insert a 747 Jumbo Jet up your nose.

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