Thursday, March 01, 2007

We might have seen the Bottom in Silver's Correction Today.

The GOLD PRICE came under attack from the opening bell, held out until noon, then faded, closing down 7.10. The SILVER PRICE held out until noon-thirty, broke below 1400, then fell almost at once to a 1340 low. Not beaten it clawed and scratched its way to a close above 1350 at 1353, down 57 cents.

First, I was wrong about the silver support. Clearly it stood at 1350, not 1380. Call it a guess, but we might have seen the bottom of silver's correction today. The Gold/Silver ratio shot up to 48.75, past the 50 Day Moving Average at 48.67. Target could be the 200 DMA at 51, but if so the silver correction will be long and cruel.

Silver broke its 17 DMA today & the 50 DMA stands at 1323. The 200 DMA (1227) is way, way below the bottom channel line, today about 1290. Looking at it now, I see that the three corrections beginning in June 2006 all fell all the way to the 200 DMA, but at that time the DMA also was paralleling the bottom line of the trading channel, so we could see lower silver prices. That would probably inveigle gold into dropping as low as 645 or even 638. Mmmmm . . . Looking at that chart, I wonder why my gut is so friendly toward silver. Maybe the correction will last 6 weeks & take it much lower.

When times get tough, lift up your eyes and ask, "Where is that primary trend?" Remind yourself of that longer term, wider perspective. When you remember that silver and gold are in a bull market, you can keep your eyes open to acquire more.

STOCKS today put in a kind of double bottom with Tuesday's low at 12,100 & today's 12,059. Look for a rally from here. Use it as your chance to bail out of stocks and buy silver and gold with the proceeds.

US DOLLAR INDEX rallied today, but made no move of substance or meaning. Illusion, all illusion.

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.