Monday, October 23, 2006

The Gold Price May Put in One More Low

It's a fact of life about corrections that people begin to lose hope and begin wondering whether they were right in the first place. Poor old GOLD PRICE is getting kicked in the teeth hard every time it approaches US$600. The SILVER PRICE and the GOLD PRICE are somewhat out of synch right now. The way I read the charts, the SILVER PRICE has already made its bottom, and is building one of those long, narrow correction triangles that are its trademark.

The GOLD PRICE, on the other hand, may put in one more low. These are the times when your guts roil & you want to puke in the wastebasket just thinking about buying silver or gold. On the other hand, if you are right and you buy, these are the times you will tell your grandchildren (not to mention your brother-in-law) about the rest of your life. I'd buy more silver than gold. The GOLD/SILVER RATIO is fixing to make a huge slide.

The US Dollar jumped well today, to challenge once again 87.30 & its 200 DMA (87.07). It's hard making friends when you are as undependable as the dollar. What I believe the buck has done is trade out a long, narrow equilateral triangle based on last May's low at 83.66, up through 84.39. At the top it is bounded by 87.33 & 87.30. This should break out upside to challenge 91, but who would want to play it? Hurts too bad to be the dollar's friend.

Stocks today, y'all needn't remind me, rose through my 12,075 upper target. All I can say is, I warned y'all that the Dow could keep on rising into January. Nevertheless -- Nonetheless -- Notwithstanding, nothing has changed my mind about stocks. The rest of the bear market will be worse because of this divergence of 6 years between the Dow's final top and the other indices' tops. Therefore, SSFSAG (Swap stocks for silver & gold).

It deserves more than a passing notice that the Dow In Gold Dollars did NOT reach a new high along with the Dow, reflecting stocks' lack of strength against gold. The previous high at G$435.90 occurred on gold's last low, not on stock strength. Today it reached only G$432.08 (20.90 oz). Still to be seen is whether the DiG$ can reach the G$475 half way point. The longer it goes without reaching that point, the weaker the case for stocks.

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.