October 2011 market

[68Camaro]

Part (but only part) of the recent gold/silver rally was a relative weakening of the dollar.

Overnight last night the currency plays on the dollar reversed again, and gold/silver is down as a result. Gold nearly 1:1 proportional, while silver is down 2:1 (as it tends to overreact, unfortunately).

In USD, Gold remains over 1710, silver over 34.

The rest of the world seems to be simmering, waiting for something to happen.

[68Camaro]

With market down 180 just before 1pm, as I'm coming back from lunch, I hear the CNBC talking heads do their "call the close" consensus. Every one of the 3 or 4 "experts" insist that "we've seen the low for the day" - will continue to move up toward the end of the day. Only one hedges slightly, despite agreeing. Actual close? Down 276. Just another example that the talking heads don't know crap. Do your own due diligence (DYODD).

Equities end the month up, but on a two-day down note, and below 12,000.

The yen sell-off by the Japanese moved the yen/dollar ratio by more than 5% (valley to peak), which was a part of the USD index change which affected PM prices. The nominal yen/dollar price change was actually more like 3%.

Silver and gold spent the day waffling. Gold tried to go up earlier in the day, but the continuing rise in the dollar (in the afternoon, driven by a decline in the Euro, vs what happened overnight on the yen) dragged it down, and that continued for both gold and silver after equities close. To recap the USD index, the USD index is composed of the following ratios, and clearly the top three dominate with over 80% of the influence:

Euro (EUR), 58.6% weight
Japanese Yen (JPY) 12.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight

From Friday, the Euro is down 2% and the yen down 3% (with the pound little changed), causing the index itself to be down about 2.2%. 2.2% on 1742 is a change of 38, so gold (at 1716 as I write this) has actually more than held its own against the change in the dollar. 2.2% on silver's 35.3 Friday close is .77, would would suggest a price of silver at 34.5, so with silver actually at 34.3, silver has dropped just a bit more than the change in the dollar, which for silver isn't too bad, since it tends to overcompensate on news like this.

I will continue my talking to myself tomorrow, in a new thread on November 2011, which I will cross-link to this one.

[NHsorter]

I hope you don't really feel like you are talking to yourself. I enjoy reading your posts and market insight. Thanks!

[68Camaro]

I hope you don't really feel like you are talking to yourself. I enjoy reading your posts and market insight. Thanks!

Thanks. I don't put myself up on any pedestal, and I don't claim to offer major revelations, ever, much less regularly, but it helps me sometimes - in organizing my thoughts - to put them briefly in writing.

If others get some benefit from it, that's all the better. And any discussion that starts from it, if informative, is excellent also.

[rsk1963]

I enjoy reading your posts and market insight. Thanks!

Agreed.

+1