Wednesday, September 27, 2006

Swap Stocks for Silver and Gold

Whoo-eeee! I love this! Today the Dow hit a high of 11,720.77 only 2.21 points below the all- time high of Friday, 14 January 2000 at 11,722.98. Ahh, wax proud, wax lusty, O Wall Street touts! But you won't wax for long.

Yas-sir, yas-sir, w'at a coincidence! Here we are at election time & stocks reach the old high. In a democracy like ours where the people rule (wink, wink) I'm sure the Nice Government Men wouldn't have anything to do with that, would they? Doesn't matter, because the Dow is tracing out a broadening top similar to the one that capped it in 2000. The bottom of that megaphone-shaped formation is about 11,460 today, so keep that number in mind. The megaphone is formed by a series of higher highs and lower lows, and is often flattish on top. When the bottom of the megaphone gives way, look out below!

Now y'all just bear all that in mind, recalling all the while the nice bearish rising wedge on the Dow chart, as you read USA Today Newsweek, Time, and other repositories of wisdom where the gurus will be spouting and touting stocks. Recall, and remember that you heard me say, Swap stocks for silver and gold.

Here, let me put the very last, perfect brush stroke on this picture: In 2000, when the Dow hit 11,722.98, the DOW IN GOLD DOLLARS stood at G$853.59 -- you needed 41.29 ounces of gold to buy the Dow. Then Gold cost US$283.90 an ounce. Today, the DiGS stands at G$404.55 (19.57 ounces), down 52.6%! On 14 January 2000 silver closed at 511.2 cents, so you needed 2,293.23 ounces of silver to buy the Dow. Today, with silver at 1160, it costs 1,010.6 ounces, down 55.9%. Res ipse loquitur.

Today the SILVER PRICE continued its rally, rising 20.5 cents to close at 1160. Silver is now within a whole band of resistance, and could rise up to 1220. I expect this rally to fizzle and give us a chance on the reaction to buy again, but I could well be wrong. A close over 1306 would prove me wrong.

The GOLD PRICE high today was 603.30, but it couldn't cling over $600. However, gold did burst through the 200 DMA (594.36) and close up 6.10. This rally will reach at least 618 - 600.

US DOLLAR? US dollar? What's a US Dollar? Is that reported somewhere?

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"

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 $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.