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Friday, September 29, 2006

Gold and Silver to Rally then Test Recent Lows

Both GOLD & SILVER PRICES backed off their highs this week, but remain well above their 200 day moving averages. I am still expecting this rally to reach 618-620 and 1185 - 1220, then fall back to test the lows already made. Then the lows will be confirmed, or new lows (by a small amount) put into place. At that point you ought to buy everything you can, sell your dog, and buy some more.

If you have not that patience, or fear that silver & gold will not do that but break out upside, then go ahead and buy. In view of the upside targets, it won't make much difference.

Ears up! The US Dollar closed today at 86, where it has failed over and over. Perhaps a breakout this way comes? Monday will tell. Monday will probably bring higher prices for silver & gold, too.


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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



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"
http://The-Moneychanger.com

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.



Gold and Silver Prices Expected To Rally From Here

As it had threatened so long, today the SILVER PRICE broke out and ran 17.8 cents to close at 1139.50. The high was 1146. The 50 Day Moving Average stands about 1175, and there's also tough resistance at 1185, so this rally is likely to slow down there. A 62% correction of the fall from the last high to the last low would be 1220. If silver closed over 1306 it would mean that it is taking off, the correction is over, and the next upleg has begun.

The GOLD PRICE can't work up as much enthusiasm as silver, and remains below its 200 DMA (now 593.97). That's all right. It will probably climb over that tomorrow and race toward 620 where it's likely to hit the wall and stop. I've been expecting that both metals would rally from here, then fall back to test the previous lows. I still expect to see that, but we've got the whole rally in front of us still.

Oh, how glad I am I don't trade STOCKS. I looked at that chart today and low & behold! There appeared unto me a shape like a rocket's nose cone, verily, a bearish rising wedge that resolveth to the downside. There's about a 1000 point fall in the cards, judging from the height of that bearish wedge. Whooo! Look out below. Time to swap stocks for silver & gold. (One of these days you'll tell your grandchildren, Yes, kids, back then there was this nut who kept telling us to swap stocks for silver and gold, but we just laughed at him, and, well, that's why we're living here in the poor house today.)

I'm just tired of watching the US DOLLAR, trading up and down like a yoyo between 85 and 86. Y'all wake me up when something
happens.

By the way, did I forget to mention that the DOW IN GOLD DOLLARS hasn't been able to reach G$415 again, and that it falleth back toward the 200 DMA from whence it came? Bad juju for stocks, that in the midst of such gold weakness they can't make tracks against gold.

THE GOLD SILVER RATIO fell a little. I hope we will see one more spike up so we can make a few last swaps out of gold into silver, but that should be around 55:1.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Saturday, September 16, 2006

Silver & Gold Prices Rallied Sharply Off New Lows

What a week! Silver dropped almost as many cents as the Dow rose points. Was it enough to make me abandon metals & fly to stocks? When pigs fly. The markets are handing metals buyers a gift. Take it.

STOCKS have rallied almost back to the point where they failed in May, but appear to be tiring out. Why are the Dow Transports so far behind? It offers clarity to the soul to view stocks through the lens of gold, and the DOW IN GOLD DOLLARS. After falling to G$331 (16.01 oz) in May of this year, the DiG$ has laboured to stay off that low. It has failed to pierce G$400 (19.35 oz) until this week. 200 Day Moving Average (DMA) stands around G$390.50 (18.89 oz), so all things considered, I have to consider this merely re-visiting the 200 DMA in the midst of a long term bear market. It should stop around G$425 (20.56 oz). This is simply a better opportunity for you to swap stocks for gold. The end of this stock market rally can't be more than 4 weeks away, and when it starts to fall, 'twill fall fast.

The US DOLLAR shows nearly unchanged from last week, unable to break through 86 although it has broken out of its tight August trading range. Time's a-wasting - dollar can't straddle the fence forever. I lean toward thinking it will clear 86 next week and make its final fling in the next few months, before revisiting 80. By the way, sneer when you hear anyone say the present silver & gold troubles were precipitated by a strong dollar. That's just silly. Mayhap the Nice Government Men who manage the dollar have been monkeying with silver & gold, kicking them while they're down, but not the dollar. That piece of junk couldn't hurt a fly.

SILVER & GOLD PRICES spiked down today to new lows (1042 & 570) but they rallied sharply off those lows. True, they didn't close higher, but that recovery argues there are lots of buyers willing to put their money where their mouth is when silver drops below 1050 and gold below 575. The line has been drawn in the sand.

What's the worst possible outcome? Grab your wastebaskets & start puking: 475 gold price and 700 silver price. Now, do I believe that will happen? No. Is that possible, and the metals remain in a bull market? Yes, quite. More likely is a silver low from 1000 - 945 & a gold low around 542. However, today's performance was strong & encouraging, and we may have seen the bottom. What I am looking for is a rally and failure. Once we see where that failure stops, a double bottom (or not) will be obvious, and a low risk buy.

But all that is just chin-boogie and wool-gathering. When any long term bull market returns to its 200 DMA, you just have to buy it, or stop investing in the market. Buy.
How much longer can this go on? If we haven't already seen the bottom, the worst should be over in two weeks, but it will be November before metals begin to climb again. After the bottom they'll move frustratingly sideways.

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

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Tuesday, September 12, 2006

Gold Price Shows Strong Support at 575 -580

Last Thursday, September 7, I noted that there were two possible interpretations of the silver & gold markets: "Well, we have lurched from one twofold possibility to another.

First, here's what I believe is happening: silver and gold tried to break out and have failed. That will send gold down below 600 & silver to 1075 or so, from whence they will come roaring back." Today saw those breaks. GOLD traded as low as 582.40 & SILVER 11.02. They closed at US$590 & 1110.8

Ponder -- think, O think ye -- about what hath taken place.

The GOLD PRICE shows strong support on the chart at 575 - 580, and the 200 day moving average (DMA) stands at 589.36. Lesser support holds around 590. Last time gold revisited its 200 DMA it only touched it during the day's trading, then took off. I have been targeting the 200 DMA to buy for some time. Scary as it is to buy after four days' dropping prices, if you don't stick to targets you'll never buy anything. Rather, you'll weasel and find an excuse to wait for lower prices every single time. And if a reversion to a 200 day moving average in a BULL market is not a place to buy, well, let's just fold up the tents and steal off into the night, 'cause there's nothing left for us to do here.

Same holds true for the SILVER PRICE. From several different angles a drop below 1100 must be a buying target, among them the 200 DMA at 1089. 'Twas from the 1080 platform the last silver advance was launched. I would buy at 1080, a break you will probably see this week, if you ever see it. Tomorrow both metals may bounce against today's long fall, and then fall again. Obviously huge support undergirds gold at 585. Silver, on the other hand, found all its new friends turn traitor and run. Ahh, hedge funds are so fickle. To drop more than 105 in one day asks for a little more downside. However, if you choose to wait silver out another day or two, better keep a sharp eye, Matey (as Long John Silver would say) because the bottoms in the last 6 months have been sharp and viciously short.

If you pass this one up, you'll have a story to tell your grandchildren about the "big one" you missed.

The DOW IN GOLD DOLLARS today reached G$400 (19.35 oz). You know, it's hard for me not to suspect that somebody big, some Nice Government Men, for an example, in a position to influence the market watch the DiG$. Y'all remember I mentioned in the last few days that it should shoot up to touch off its 200 DMA before it resumes free-falling. 200 DMA is now at G$391, so this touch fulfils my expectation.

Are you ready for this? Stocks gained (drum roll, please) a whole 4.73 points on the Dow, and 0.62 point on the S&P 500. Man, you have to stand back in admiration at that sort of power unleashed. This is the perfect time for you to swap stocks for silver & gold -- delay not!

The US DOLLAR index fell back two basis points trying to claw through 86. Lethargic, but seems to be resolving its coma by
awakening to the upside. Folks, this is it. This is the final leg down in the silver & gold correction that we've been waiting for. Sure, it might drop more, but if it does, I will only buy more. These are your targets -- now pull the trigger.

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

- Franklin Sanders, The Moneychanger
http://The-Moneychanger.com

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.



Wednesday, September 06, 2006

Gold Price Challenged 635 & Couldn't Hold On

Personally, I am not impressed when a market breaks into new high territory, then closes at the low end of the day's range, or lower. Smells too much like a key reversal. Stinks of weakness. So today stocks sank from yesterday's lofty empyrean back to sultry reality. As Al Thomas sneered today in Over My Shoulder, "New highs on light volume. . . A mousetrap." I thought stocks might have a little more juice left in them, but apparently not. (That's two days running I've worked "empyrean" into my commentary. Not bad for an old metaphor-mixer, huh?) Truth to tell, silver and gold performed the same way as stocks today.

Silver Price looks like it has posted a double top around 1325. Yes, silver did close 6 cents higher today, but has dropped in the after market. And yes, it msut follow-through to the downside tomorrow to begin confirming that double top suspicion.

Gold Price challenged 635, and couldn't hold on, closing today at 633.50 Slippery performance, not strong. I'm climbing out on a limb, but that appears weak to me.

Y'all ought always remember that these daily comments have a very short time horizon -- 24 hours. Over the longer term I have no doubt that silver and gold will flourish. If gold does not top $1000 and silver $25 in the next 12 months, I will be much surprised.

Gold/Silver ratio leaves us nothing to say today. US Dollar crept out of its hole at 85 into another at 85.15. What a mouse. Dow in Gold Dollars continues to prove stocks have neither strength nor credibility against gold or silver.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
http://The-Moneychanger.com

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.



Tuesday, September 05, 2006

Gold Close Over 655 Argues Higher Prices

Welcome back! Surprising even myself, I survived my "vacation." On Friday I was musing about the gold and silver conundrum. Well, today they pulled back the veil. But first, the more plebian markets, and then we shall climb to the empyrean. The US DOLLAR lies range-bound, trapped since last may between 83.60 and 87.33. Lately the range has narrowed markedly, to 84.39 - 85.75. In August's latter half the dollar has virtually gone catatonic. The range can't narrow forever. The narrower it gets, the more it assures a breakout, up or down, so expect some explosion -- or at least some movement -- soon.

STOCKS are entering what is historically a rough time of year. They've been reluctantly trending up sinc ethe fall of 2004, but oh! How reluctantly. The likes of last May's Dow high at 11,670 haven't been seen all summer. Range now is 10,685 & 11,670. I expect to see stocks trend higher for another two weeks or so, but will be surprised if they greatly pierce 11,670. They could drop off sooner than two weeks. Watch that 10,685, because when it breaks big losses will follow. The Dow is tracing out a deadly rising wedge on the chart, a sure bearish sign.

Stock strength has not show in the DOW IN GOLD DOLLARS. Even with recent stock "strength" the DiG$ remains below G$400 (19.35 oz) & keeps on piddling in the G$370 (17.90 oz) - $380 (18.38 oz) range. I am still looking for the DiG$ to drop below G$40 (roughly 2 oz). Therefore, swap stocks for silver and gold, as fast as you can.

GOLD PRICE broke out today -- sort of. It climbed above 635 resistance, but not quite over 640. From here to 676 the way is strewn with roadblocks and resistance, but if this is a breakout it targets 720. How can we tell what's happening? A gold close over 655 argues for the higher target, and a close above 675 clinches it. It appears that I was wrong expecting lower prices yet in this correction, but that's still possible. Growing less likely, but possible.

SILVER PRICE in recent weeks has wrenched leadership from gold's path and moved upwards. The first problem here is the long non-confirmation with metals moving opposite directions so long. The taste of that lingers, casting doubt. Silver meets big, big resistance at 1340 cents. We'll see that fight this week, perhaps tomorrow. Should silver clear 1340, it can run. If not, it clinches another leg down.
The GOLD/SILVER RATIO leaves us now with no swaps to make. It stands in mid channel. If it reached 55 we would swap gold for silver, or if it turned and fell to 40 we would swap silver for gold. But alas! At a mid-channel 49, there's nothing to do but wait.

I'm glad to be back. I missed y'all.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
http://The-Moneychanger.com

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.