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Monday, November 27, 2006

Gold and Silver Prices Break Out

I'm going to start out this commentary with a lecture: in a bull market, get long, and then get longer. Sure, it's fun to scope out markets and forecast them with technical analysis, but in a primary uptrend the proper course is to buy, then buy more, and then buy more again. Don't let the phantasm of price dips become the enemy of real profits. Application: silver and gold are in a primary uptrend that will last another 10 years or so, a bull market. Get long, and then get longer.

The breakouts in SILVER AND GOLD PRICES, confirmed by both rising above their September highs (1306 & 638.50) and holding those levels two days, looks real. Nor can it be written off to "dollar weakness" as light-weight minds are wont to do. Silver & gold were already rising against other currencies before the dollar broke. This appears to be the breakout I have been looking for since the correction began last May. Further confirmation is needed tomorrow by silver and gold rising still further. At some point, probably from much higher levels, the breakout will play "touchback" toward the point at which it broke out, most likely around these very prices we see today.

STOCKS were beaten today with an iron bar and left for dead. The Dow fell 158.46 points, but the S&P fell harder, roughly the equivalent of 198 points on the Dow. Now the lines are drawn and we can see that Mr. Bear didn't want the rally to get over 12,330. This may not be, indeed, probably is not, the last we'll see of prices at these nosebleed levels. That may continue into 1st quarter of next year, but maybe not. Stocks usually rise into the end of the year -- 'twould be a perfect turnaround to fool the greatest number if Mr. Bear just pulled the bottom out as a Christmas present
for his victims.

The Dow in Gold Dollars (DiG$) today extended its down- trend and confirmed it with a lower low at G$391.10 (18.92 oz), a decisive break through the longer term uptrend line, and a close below the 50 day moving average (DMA) (G$412.39), the 17 DMA (G$402.65), and nearing the 200 DMA (G$388.11). Closing through the 200 DMA will sink the DiG .

The US Dollar Index dropped 105 points from Wednesday to Monday (that's what I've show below), to close at the very bottom of its range and below. It closed below the May 2006 low, and below the point where this rally began in May 2005. It the Nice Government Men can't catch it here, twill drop back to the Dec. 2005 low at 80.50. The dollar's long term trajectory points to 60 (yes, sixty) but since 80 forms the bottom of a 35 year trading range, you can expect bounces from there. The NGM will be engineering the fall below 80 in stepwise fashion.


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, November 18, 2006

Gold and Silver Will Come Roaring Back Off The Dips

Today the metal's reversed roles and gold seemed a tiny bit stronger than silver, closing up a magnificent 90 cents versus dropping 14.3 cents. On the chart gold shows support resistance at 622 and at 622 and 614. A close below 614 would take it lower, probably to 602. Gold needs to close over 626, and then 632 in short order to turn up. Silver has fought off every attempt to break it to 1250, but is tied in below 1280. I felt bleak until I looked at the past 5 days' charts. Both gold and silver might have bottomed this week. If not, the bottom should occur by the end of next week.

Y'all should buy on ANY dips, because silver & gold will come roaring up off these prices and never look back. Watch closely & alertly next week.

GOLD/SILVER RATIO is preparing to drop heavily. I anticipate our next silver to gold swaps will occur below 35:1. We can afford to be patient.

Give the devil his due: stocks are strong. The S&P500, though far from its all-time closing high of 1527 (March, 2000), managed to close above 1,400 today, a psychological milestone. Stocks can keep rolling into the first or second quarter of next year. So why do I continuously advise y'all to swap stocks for silver & gold? Because metals even now are about to pull out of their six month correction and knock on and exceed their last highs at 1500 and 719. Meanwhile you are seeing the last of the last rose of summer on stocks, which remain in a primary bear (down) trend.

Which had you rather hold over the long run? Since 1999 and 2001 stocks have lost 55% against gold and 63% against silver. Which do you want to hold, stocks or silver & gold? Stocks are making a blowoff top that's liable to go anywhere, but 12,500 and 12,750 are nice numbers.

The Dow in Gold Dollars (DiG$), which measures stocks' performance in terms of gold dollars (0.048375 troy ounce), rose today. It appears to have double bottomed below G$400.00 (19.35 oz.) last week. Can it pierce resistance at G$415-17, G$425, & G$433? I don't know. If it does, it will stop around G$475 (22.98), the half way mark of the previous (1980 - 2000) rise to G$922.45 (44.62 oz.)

The US DOLLAR INDEX isn't telling us anything. It is hovering between 85.3 - 85.5, moving point-lets every day & marking out no path. A close below 85 would send it dropping like your car keys out of a bass boat. It must close above 87.3 to break out to the upside.

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.



Friday, November 17, 2006

Probably About To See The Last Dip Down In Gold and Silver

SILVER AND GOLD PRICES closed lower today, at 620.6 & 1292.2. That isn't bad, but they have fallen off in the aftermarket to 617.9 and 1278, below critical support at 618 and 1280. Probably we are about to see that last (last) dip down. Likely stopping points are 610, 602, 600 and 1250, 1225, and 1200. If metals are going to break, break, y'all will probably see that begin tomorrow. On the other hand, a strong performance tomorrow would probably mark the beginning of the long-awaited rally.

The Dow in gold dollars rose to G$411.69 (19.92 oz), close to the G$415 - G$417 resistance area. A break through that carries it to G$425 (20.56 oz) or even G$433 (20.95 oz.). Lo, what meaneth this tumult? Not much. Long term primary bull (up) trend for silver and gold is firmly intact & long term primary bear (down) trend for stocks. This is your chance to buy silver and gold on the cheap. If y'all miss it, don't say I didn't warn y'all.

Whoo-ey! The Dow Jones Industrial Average gapped up on Tuesday, strong as a garlic milkshake. This will continue until it ends, but 'twill continue without me. November & December are usually good months for stocks, so we can expect this to keep churning into next year and pile up 500 or more points. Great ride, but I'd rather swap stocks for silver & gold, because heartbreak doesn't await us there. Or maybe I should say "bankbreak."

Nice Government Men in the Treasury are helping out their buddies in the Federal Reserve (a private corporation) by pumping up the money supply with "repos" (repurchase agreements). One suspects (if one has a high enough IQ to open a box of cereal) that the Fed ceased publishing M3 data because they wanted to mask their planned inflation. Now the Treasury is pumping up the money supply in a sneaky way that doesn't show up in the published statistics. How does that make you feel?

Confident about the dollar's future? Sounds a bit Bolivian to me, or perhaps Paraguayan.

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.



Thursday, November 16, 2006

Silver Price Close over 1325 and Gold Price Close Over 640 Would Confirm a Breakout

SILVER AND GOLD PRICES won't get weak, and won't get strong. Reminds me of the man who had killed his parents and then threw himself on the mercy of the court because he was an orphan. From here a metals breakout would be confirmed by silver closing over 1325 & gold closing above 640 at the same time. Today gold fought off a decline to 615 and silver to 1246, and both shook off the attack and rose to close above the support areas. More times this happens, greater the likelihood they will break, make another low, then bound up. I'm torn between two minds, but lean a bit toward lower prices. Certainly, until metals have to reach those higher closes before I can say they've turned up. However, this stalemate shouldn't last long. Even if we get lower prices first, a rally lieth not far distant in the future.

US Dollar rose 2 basis points today, a meaningless fluctuation. Right now balance lies on the downside. Dollar needs a close above 87.30 to turn up.

Market speak with fork├ęd tongue -- or out of both sides of its mouth. The DOW made good today its breakout over 12,200 by adding another 33.7 points. Dow Industrials Average is going higher, solo, unaccompanied by the Dow Transports, a significant non-confirmation. Many will be the unsuspecting investor bereft of his funds before this ends. Use high stock prices as an opportunity to swap stocks for silver & gold.

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, November 14, 2006

Silver and Gold Remain Out of Synch

Did SILVER AND GOLD fool me last Friday into believing they had broken out upside? Highly possible. I should have followed my own rule and insisted on a new high gold close, & not just a close over 630. Silver & gold remain out of synch. It seems that weak gold is having its spine stiffened by stubborn silver, which refuses to break 1280. Today gold dropped as low as 618 and snapped back to close down only 40 cents at 623.80. Silver traded as low as 1270. In the aftermarket silver is trading at 1283 bit gold has dropped to 621.80, so we may see lower prices yet before their minds clear & silver & gold prices get back in step. Still, Thursday's performance warns us how fast metals can and will move, so I'd still be buying at these prices.

GOLD/SILVER RATIO traders are sitting tight, snug on big piles of silver that we bought with gold when the ratio was 53 - 56. We're waiting for a spectacular move, so wait patiently.

Today I'll tell y'all something that may sound contradictory, but is not, namely, I think stocks may have a wild parabolic rally yet not gain any ground against gold. Why? Because I'm staring at the DOW IN GOLD DOLLARS chart, which measures the Dow's performance in gold, and its rally that began last July appears to have spent itself. Huff, huff, huff, flat on its back out of breath. The DiG$ would have to climb to G$433 (20.95 oz) & above to change my mind, from today's G$406.17 (19.65 oz). Looks to have topped and begun to fall again.

However the Dow closed at a new high today, which raises the odds that it will blow off vertically. Crazy moves like this can do most anything, but as I said a month or more past, we might see a blow off top that carries to 12,750 or so. This will be the shorting opportunity of all shorting opportunities. If you haven't yet swapped stocks for silver & gold, it's time for that, 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.



Thursday, November 09, 2006

Gold and Silver reversed and broke out to the upside.

Dearest Readers,

The Moneychanger's on the road today, but called in this commentary:

"Today Gold and Silver reversed and broke out to the upside. This is the rally I've been waiting for. Buy now."

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, November 08, 2006

This is it, the last correction, the one we've been waiting on.

GOLD AND SILVER PRICES, could not break through resistance and fell back to support levels, the gold price through two levels (622 & 618) while silver fell only to the first support level, 1250. Beneath us 610 & 602 are waiting to catch the gold price. Tomorrow you'll get a chance to buy at least some around 610. Buy silver at 1225, 1200, and 1180.

In spite of closing at 616.40 & 1250.7, gold and silver have traded as low as 613 & 1241.5. Now they've turned back up, but it still points lower tomorrow.

This is it, the last correction, the one we've been waiting on. It's just beginning but will likely unroll very fast. You snooze, you lose.

I confess I am a stock bear, but even a blind hog finds an acorn sometimes. My friend RL says that to read a chart, you have to tear off the top, where it's labelled, to make sure you are reading the chart, and not your bias. So if I tear the top off the 5 day Dow chart, what do I see? A very plain double top just under 12,200, which leads to my concluding the next few days the Dow will fall.

Of course, a close through 12,200 would negate that. And now, a word from my bias: Folks, swap stocks for silver & gold. You'll be glad you did. (I bet y'all think I'm writing this every day to be funny, or to sell metals. Well, I'm not. I'm as serious as a cranky jet engine at 30,000 feet.)

Currency markets apparently didn't think anything of the election, one way or the other. The dollar index rose 9 basis points -- meaning- less. The situation remains unclear. A close below 85 takes the dollar down, a close above 87.3 takes it up. In between is lost hopes & found disappointments.

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.