Monday, February 26, 2007

Silver & Gold Prices Are Nearing the Top Line of the Trading Channel

Both SILVER & GOLD PRICES are nearing the top line of the trading channel. Likely when they hit that a correction will start. However, they might just trade clean thru the top line & keep climbing. This week I expect to see the silver price at 1500 and gold price at 700, perhaps at 720.

The GOLD/SILVER ratio continues to fall, acting as it should to confirm uptrends in silver & gold.

After breaking below its 50 day moving average (DMA) two days ago, the US DOLLAR INDEX today closed below 84. As Earnest P. Worrel might say, "Ooooooooo." The stench of death clings to the dollar. Yet like a rattle-snake in the middle of the road, never forget it might still be alive. Since the dollar has no value in itself, & since its exchange rate is manipulated by central banks for political ends, it might just turn around and run to 87 tomorrow. However, don't count on it. Appears headed at least for 82.35, the last low, or even lower. 80 is not impossible.

The DOW dropped again today. Hey, y'all explain to me. How do you make money with stocks when the index shoots up 100 points in one day, then spend the next 5 days giving back 125 points? Anyway, Dow might stop in the next few days at 12,600, or, more likely, drop to 12,550 and pick up a little back-up support from the 50 DMA (today 12,545). Owch! Look at that. Volume is building slightly as the Dow drops. That implies the move is speeding up, & that it will continue.

But I am no witness against stocks, now am I? I've been advising everyone to swap stocks for silver & gold for over five years now. But I am trying to be objective.

On the big question -- Has the stock market topped yet? -- the answer is, no proof yet. Therefore, after this correction is over (assuming that it doesn't crash), we ought to expect the upward trend to continue. However, bear in mind that stocks will make a top soon, although they take a long time to roll over.

Dow in Gold Dollars (DiG$) broke down last week thru the 200 DMA and has fallen ever since. Now at G$380.38 (18.4 oz) & falling.

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.