HIGHPOINT, Tenn., Jan. 21, 2022 — What a grueling, thrilling week! Stocks were battered and shattered. Dow Industrials skidded 4.6% while the SP500 slid 5.7%. US dollar index did little, ending up 0.5%. Metals went plumb crazy.
By Franklin Sanders / Moneychanger newsletter
Gold rose a modest but respectable 0.8% while silver — get this – jumped 6.1% or 140.3¢! Platinum and palladium romped and stomped and went crazy, up 7.3% and 12.15 respectively.
[ Here’s how the week began — with an amazing uproar last week in the markets. Reposted with permission from the Moneychanger daily commentary, free at this link, on the “subscribe” button right-hand side of the page. Always comes with detailed buy/sell chart from Volunteer Precious Metals in middle Tennessee. Volunteer is my recommended, default and preferred dealer in gold and silver. Always take delivery when you buy gold or silver. VPM ships only of state. The Moneychanger is my recommended newsletter for the world as it is, in the alternative. — DJT]
Y’all ought to realize that multiple bubbles, all caused by the Federal Reserve’s money creation (inflation), are bursting, not only stocks but also cryptocurrencies. Bitcoin lost 15.7% this week or $6,780.77, falling from $43,124.77 to $36,344. Don’t believe me? Check out this chart for the week or the Bitcoin futures chart While you’re at it, read this article on Zerohedge, “Investing Legend Turns Apocalyptic, Expects Stocks to Crater 50% in Largest Wealth destruction in US History.” This ain’t no natural born durn fool form Tennessee foretelling this but the legendary Jeremy Grantham.
Lollygagging still, the US dollar index peeled off 9.5 basis points to end at 95.642, still somewhat ambiguous about its intentions. To continue the rally begun in June it must overcome its 50 day moving average, now at 95.92. Indicators are also blowing hot and cold out of both sides of their mouths.
Lo, how are the mighty fallen! Think a few moments about stocks, take a walk with me through the charts. Nasdaq Comp, down 2.72% today and sunk way below its 200 DMA, having now paid back most of 2021’s gains; Nasdaq 100 down 2.75% today and sunk beneath its 200 DMA and having given back more than half this year’s gains; Russell 2000 small caps off 1.87% today, way below the 200 DMA, and now at zero gain for the year; Wilshire 5000 minus 2.04% today and has lost 12.5% of the last year’s gains. Even the Dow Transportation Average is below its 200 DMA. Y’all recall that 200 days is roughly a year’s trading and when a market falls below its 200 DMA its momentum turns down. The path of least resistance is lower.
The Dow Industrials tumbled 450.07 (1.30%) to 34,265.37, well beneath the 200 DMA and nearly to the December low. Today the S&P500 plunged 84.799 (1.89%) to 4,397.94, shattering its 200 day line and crashing through the December low. The S&P500 lies 8.7% lower than its December peak, the Dow 6.9%. With all these stock indices now below their 200 DMAs, this collapse is not a fluke, and not finished by a long shot.
Y’all ever get hung up on numbers? The Dow in Gold dollars is how I used to express the Dow in gold because it gave me one unchanging measure — a dollar of gold equal to 0.048375 troy ounce — from the 1896 Dow until today, but I stopped doing that because nobody knew what it was, like quoting speed in furlongs per fortnight, so I went to quoting the Dow in gold in ounces.
But still that number G$400 — 19.35 oz — sticks in my mind because I’ve been seeing it so often this year . In 2021 the Dow in gold peaked a little above G$400 at 20.5 oz, so it’s been a benchmark in my mind. Probably I remember it because the 1921 Dow high was G$381.17 or 18.44 oz. Today the Dow in Gold closed at 18.71 or G$386.77, lower than the 1929 peak.
Case y’all are wondering, the 1965 high was G$584.18 or 28.26 oz and the 1999 all-time high was G$925.42 or 44.77 oz. In 1934 the Dow bottomed about two ounces, and in 1980 about one ounce. Does that give y’all an idea how far stocks have to fall against silver and gold?
Rubbing it in, the broken down S&P500 in gold is wallowing below its 200 DMA, too, as is the Dow in gold. Ditto the Dow in silver. Are y’all beginning to get the idea that when I say, “Swap stocks for gold or silver,” I have pretty sound reasons?
Palladium rose another $30.67 or 1.5% today, and is inching toward overbought on the RSI.. Platinum backed off $15.40 (1.5%) to $1,034.50. It bounced off the 200 DMA and the downtrend line, but don’t worry about that yet.
After a week of rich trading when a market gains big, Friday is liable to see a sell-off as short term traders close out positions and take profits before the weekend. I think that’s what silver and gold suffered today. Gold crept back $10.70 (0.6%) to $1,831.00 while silver misplaced 39.7¢ (1.6%) to 2431.4¢. That spooked the gold/silver ratio and it jumped up 1.04%. Remains within easy range of the 200 DMA.
Gold and silver this week celebrated their second up month and second up week running — solid. The daily chart reveal gold touching the downtrend line yesterday and backing off again today. At such an obvious breakout juncture, that shouldn’t surprise anyone. It will take two tries to crack the resistance as buyers and sellers wrestle, but the buyers will win because gold is still rallying. This is just a normal market pendulum swing on the way up. Mark that gold remained above $1,830 support/resistance.
Silver is ping-ponging between its 200 DMA and the downtrend line, but today remained well above 2400¢. There remains yet to come the most powerful part of this upleg which will take silver well beyond that last peak at 2549¢. Next week silver should confirm this week with higher prices still.
Argentum et aurum comparanda sunt.
Silver and gold must be bought.
