Wednesday, January 10, 2007

Ominously,The Silver Price Fell Below 1238 and the Gold Price Below 614

Today y'all learned the need for confirmation. In spite of yesterday's strong close just beneath resistance, the SILVER and GOLD PRICE fell back.

Ominously, the silver price fell below 1238 and the gold price below 614. Another leg down lies in their future. Remember the bottom targets I have been discussing are 1175 and 580, but don't get those fixed in your minds as my target, only as a possibility. Remember also that bottoms in silver and gold have been very quick, sharp, V-bottomed affairs. Don't fool around, and watch closely.

Silver's 200 day Moving Average stands at 1213.5. Looking back over the chart at previous corrections that reached the 200 DMA, silver usually trades through the 200 DMA and beneath it for a week to two weeks. We certainly haven't seen that yet, so keep your eyes peeled.

I stared at the GOLD/SILVER RATIO chart today until my eyes started to bleed. The 200 DMA stands at 51.26, a reasonable target, and the top of the trading channel today stands around 52.50. So far it might go, but no further. May not even see that high.

The Dow In Gold Dollars (DiG$) high for this move was G$423.69 (20.5 oz) on last Friday. After three tries the DiG$ has still failed to better that and today closed at G$420.64 (20.35 oz). Tis now come to very strong resistance all the way to G$435.90 (21.09 oz). If it fails here, 'twill begin its next leg down. If it pierces this resistance, 'twill climb to G$475 (22.98 oz).
But STOCKS are not particularly helping themselves. Today the Dow stopped slightly below this week's high (12,465). If it can break that it must climb to 12,515. Still a see-saw market, making as much progress around the playground as a jet-propelled teeter-totter.

Wow, that's odd. The US DOLLAR INDEX rose 34 basis points today. Same number of basis points it jumped twice at the year's beginning. Nice Government Men getting clumsy? Ought to cover their tracks better than that. Dollar over 85 means a rally to 86 or 86.5, maybe even 87.

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.