Thursday, January 04, 2007

If gold breaks 618 look for a fall through the last low close (614) all the way to 600

Today the GOLD PRICE dropped, while the SILVER PRICE rose -- metals speak with forked tongue. Non-confirmations reveal confusion & indecision in markets, and that's what we have here.

Gold has support at 626/5 and 618/622, so today's attack forced the gold price down a single resistance level -- not bad. However, if it breaks 618, look for a fall through the last low close (614) all the way to 600. If so, 'twill happen fast, and rebound just as fast. Therefore, keep your eye peeled. You ought to be buying here.

The bottom of silver's trading channel lies around 1175 - 1150, so that's as far as I can see it falling. But first it must fall through strong support at 1240 - 1250. Another downside target is the 200 day moving average at 1218, close to 1225 support and the bottom Bollinger Band at 1202. Watch alertly for volatile silver to drop very fast in the next two - three days and recover just as fast. Buy silver.

A gold price close over 640 and silver price over 1315 means that no lower prices will be seen & the metals have turned.

If the GOLD/SILVER RATIO rises over 51.50 in the next few days, swap gold for silver. Most of y'all have already swapped silver for gold at much higher ratios, but if you haven't, or you have a little more gold you want to swap for silver, 51.50 or better would be the place to trade. We want to be in silver because we expect the ratio to drop below 35:1 this move. (Gold will fall from costing 50 ounces of silver to costing less than 35 oz. of silver.)

STOCKS double bottomed Wednesday and today just above 12,400 but stopped today way short of resistance (and last top) at 12,520, which now stands as the great challenge. We are seeing the same pointless meandering I warned y'all of. What can I say? Swap stocks for silver and gold. Before it's too late. Yes, yes, I know I keep repeating the same thing, it's because it still needs to be done. I feel like Cato the Elder in the Roman senate, ending every speech with "Carthago delenda est!" Carthage must be destroyed. In the end, he was right.

The US DOLLAR INDEX broke out today with a close at 84.32 -- probably. Needs to confirm yet with a higher close tomorrow. Target is 86.00 to 86.50, but with a market manipulated by Nice Government Men, who can ever say with certainty? Remember this: all currency markets are manipulated. They have to be, because otherwise they'd sink to their intrinsic value, namely, zero.

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.