Thursday, February 15, 2007

Ripe Time for a Shallow Correction - Before a Push Through Silver 1406 & Gold 667

The SILVER PRICE appears headed for its top channel line, and ought to hit 1550 by March 8 to April 8 -- roughly. Of course, plenty of things could intervene to change that, but for right now, as I read the chart, that's what I expect.

What bothers me, on the other hand, is that by the same logic the GOLD PRICE ought to hit its top channel line at only 690 or so. Still, when I look at the indicators, direction for both metals remains up. It would be a ripe time for a shallow correction, one more "catch your breath" before a push through 1406 & 667.

Thanks for your prayers & well wishes. A 24 hour bug gripped me with the worst chills I have ever had. I am thankful to report I'm still alive.

Yesterday the US DOLLAR INDEX closed below its 50 day moving average (DMA), and today fell further. Hard to believe it is not headed back toward its last low, viz., 83.17. More likely still is a drop clean to 82.35, the next to the last low.

The Dow took STOCKS to a new all-time high two days running now, yet the long rise has lost its rocket symmetry and has begun to roll over. By the way, I was out of town on the 31st and therefore unable to comment on President Bush' cheesy & superstitious trick of visiting Wall Street on the last day of January to make sure it closed January higher than it began. This is like "fixing" the boiler by wiring down the safety value so that it won't annoy you with an alarm.

The Dow now has a support level from 12,514 to roughly 12552. Below that is 12,360 to 12,340, then 11,200. Day moving average (DMA), and today fell further. Hard Be patient, but put no faith in it.

The DOW IN GOLD DOLLARS rose today all the way to G$395.45 (19.13 oz), not far above its 200 DMA at G$389.24 (18.83 oz). Dec 1 low was G$391, Feb 8 at G$389.62. One more test of that area ought to break down, proving the timeliness of my repeated encouragement to swap stocks for silver and gold.

On this day in 1970 Great Britain yielded to decimal tyranny and adopted a new currency system based on 100 pence to the pound. Their 1,200 year old system was based on 12 pence to the shilling & 20 shillings to the pound, or 240 pence to the pound. Ever try to divide a dollar by six? Or forty? See what I mean? Original "sterling" pence were minted of English silver & had a star on them (star-ling) & were 92.5% pure, hence sterling to describe that purity.

From about AD 650 they were minted at 20 grains each (0.0417 troy ounce or 1.3 grams) and 240 to the pound.

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.