Friday, December 15, 2006

This is Precisely the Time You Should be Buying Gold at 612 and Silver at 1280 Down.

Take a deep breath, calm yourself, and let's think about markets. Whooo, that's better. Today held enough excitement to suit anybody.

SILVER & GOLD PRICES slipped today, just in time to make good my forecast from last week when I wrote, "I suspect the correction will be very sharp & short, probably by next week and over by Christmas, or, at the latest, mid-January." Silver plunged nearly a dollar today (96.2 cents) and gold fell 11.60. Both metals are now lodged near my first targets for the correction. Next week should see a couple of follow through days which will set all the Gurus (remember, the inflation geniuses above?) to talking about the end of silver and gold. Ignore these nincompoops. This is precisely the time you should be buying gold and silver. Watch this market like a hawk, and jump on gold around 612 (roughly today's price) and silver from 1280 down. The market has handed you an opportunity. Seize it!

STOCKS (measured by the Dow) closed at an all time high today of 12,445.52. For some time I have been warning that new highs were probably, and once the Dow broke 12,350 resistance, it set a target for 12,640. This falls within my long term range of 12,500 to 13,000. I still expect to see stocks begin to drop sharply in January. No new high can seduce me into stocks, because they remain in a long term bear market. Silver and gold will continue to outperform stocks for another 10 years or so, and therefore I would seize this opportunity to swap stocks for silver & gold. Here's the joke for the day: Guru-dom is attributing stocks' rise today to "cooling inflation." My word! How do these people land & keep jobs? Next week it will be "increasing trade with the Planet ZarKon" that they cite as the reason for stocks to rise. Is anybody left on planet Earth with a functioning brain? Beam me up, Scotty!

The DOW IN GOLD DOLLARS turned sharply up today and closed just above the G$417 (20.17 oz) resistance which had so often turned it back in the past. This changes the coloration of the previous trading since the bottom, and opens the possibility that the DiG$ will not stop at its previous high of G$435.90, but still make that fabled halfway mark of its fall from the August 1999 peak, namely, G$475 (22.98 oz). Regardless how high it reaches, it has turned up by (1) trading through the uptrend line it had earlier fallen thru, and (2) closing above its 50 day moving average (DMA).

The flabby US dollar got tired of the Euro kicking sand in its face this week and has been bounding upward 33 basis points a day. I underestimated the buck. Expect this rally to carry to 85 or 85.50, floating on a sea of good feeling as Christmas draws close. Remember, however, that in January the bills will have to be paid, and the buck will tumble again. It's a stinker. Get shut of it.

- 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.