Thursday, December 28, 2006

Silver and Gold Prices Appear to Have Posted Double Bottoms on December 18 and 21

Both SILVER and GOLD PRICES appear to have posted double bottoms on December 18 and 21. Sure, they could violate those bottoms (1235.8 for silver and 614 for gold) and go lower, but for now the upward trend rules and I am not looking for lower lows (except over my shoulder, as always). Yesterday silver rose 20 cents (1.6%) while gold rose 3.50 (0.6%), but today silver stood nearly still with a 1.50 cent rise against gold's 6.60 jump.

Where does this leave us? Silver refused to break at the 1250 level, has climbed to resistance/support at 1280, and must clear that hurdle and then 1300. Gold held where I expected (612/613) then touched back to 618. Yesterday it cleared 626, now today gold is nestled just under strong resistance/support at 634.10. I didn't appreciate silver's piddling today, and gold is entering stiff resistance all the way to 650; that's the bad news. The good news is that those double bottoms and smart moves up could mean that bottoms have been posted, but both silver & gold must keep on moving up to confirm the trend. Silver needs to close above 1406 and gold above 650 for solid confirmation. Ahh, then the fun will begin.

If you have been waiting to buy silver and gold, stop waiting and move.

STOCKS hit a new high at 12,510.67 yesterday, which loosed a cacophony of crowing amongst the Wall Street touts. Please bear in mind that I said a number of months ago that y'all should expect to see this before stocks' rally collapsed, and it has not taken silver & gold by surprise, nor rendered stocks a better investment that silver and gold, even though silver & gold have been undergoing a 6 month correction while stocks held a rally.

The truth becomes clear by glancing at the DOW IN GOLD DOLLARS or the DOW IN SILVER OUNCES. The new Dow paper dollar high didn't even reach significant resistance in terms of gold, and was MILES from making a new high. The high came in 8/1999 at G$922.45 (about 45 ounces) versus Wednesday's G$412.34 (19.95 ounces). Not even close. Nor were stocks close to a new high against silver. The all time high came in June 2001 at 2,566 oz. versus Wednesday's 981. Stocks have lost 62% against silver, and there's more to lose where that came from. Wherefore you ought to seek to look at the inward heart, and not the outward show.

The US DOLLAR, which had a chance to mount a rally, failed above 84 and now has locked itself again sideways below 84. Lo, how are the mighty fallen! Not a pretty sight, & despite possible rallies to come, it won't get prettier.

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.