Wild & Wooly Market This Week

An amazing week for the markets. The first graph showing what is happening to the dollar vs other paper currencies. It is now in totally unchartered territory. Since about 1973 when this index was initiated, the dollar has never been this low. From a technical charting perspective, there are no established support points below the present value. Therefore, it is unknown how low the dollar can go. Even educated guesses are suspect.

The second graph presents the long range perspective of gold. This graph is very bullish and reveals that gold is in a powerful bull market. It has established new highs this week and has experienced several sandy spots along the way. It is currently down to 976.30, but the last indication was positive. Last night was a mixture of up and down. It, once again, moved down as the US markets opened.

Silver has been very strong, as well, but has hit a few sandy spots on the way. It is currently at 20.19 and seems to be moving upward. Silver has really been sprinting to catch up with gold.

The general market has suffered tremendous selling with the Dow now at 12054.50 and now seems to be in an upward move. It has varied this morning between down and up and is currently up about 20. The drop in value of the general market has likely forced some investors to sell the precious metals and mining stocks to cover margin calls on the general market holdings.

Margin Calls: Many investors borrow funds to make investment purchases. The borrowing is against the value of the cash and stocks in their brokerage accounts. Thus, when the market prices drop, the value of their holdings can become insufficient to cover the borrowed funds. In these cases, the broker will issue a demand upon the investor for additional cash to cover the shortage. This is a margin call, which if not answered with a deposit of cash, will cause the broker to sell some of the investment securities in the investor's account. Most investors would not want the broker to sell, so they will select the investments for sale to cover the margin call.

The Dow has moved to 12.074.67. Gold to 977 and silver to 20.37. Perhaps, the market is beginning to turn around. Remember that both gold and silver are in firmly established long term bull markets. They will hit the sandy spots from time to time, but should continue to move upward. Thus, we should see the sandy spots as buying opportunities.

We should all rest firmly in the Sovereignty of the one true God of all. He is in control and doing a great job. Much better than we or any other meddling, intervening authority could ever hope to achieve. He is working all according to His plan laid before He established the foundations of the earth and created man. It is a great blessing for all of His people. Let us all serve King Jesus as Lord of all.

Best to each, Doug