Friday, April 20, 2007

Gold Closed at a New High for the Move - Likely it will Close Higher on Monday

I'll say GOLD surprised me today. I expected it to fall a bit further. Today's close makes me want to say that gold's correction has ended, since it closed at a new high for the move. There's a 30% chance it will move down once more, say on Monday, & scare everyone again just before it takes off, but the greater likelihood is a higher close Monday.

I'm getting more excited about this. SILVER rose sharply today, but not (as gold) to a new high. Silver below 1400 keeps worrying me, but still I believe next week will see prices move up strongly.

The GOLD/SILVER RATIO remains in an area that offers no profitable swap.

The US DOLLAR INDEX kept on falling this week, but instead of falling on to the March 2005 low at 81.28, it has caught hold here at 81.60. But a trend in force remains in force until it changes, so the buck's trend remains down, with logical targest at last lows, namely, 81.28 and 80.39. Recall that 80 has been the bottom of the range for nearly 40 years, with a few short spikes to 78, so if the dollar definitively falls through 78-80, kiss it good-bye. That's not as likely (in my opinion) on this trip as a turnaround and rally for 6 months or so. Rallying or falling, I don't want to be stuck with dollars since their long term trend is down.

The DOW JONES INDUSTRIAL AVERAGE made three new highs this week, today's being the latest. However, other indices stand far distant from their spring 2000 highs. Only the S&P 500 is nearing its 24 March 2000 high of 1,527.46. (I take that back. The Wilshire 5000 has exceeded its old high by about 30 points, closing today at 15,009.91). I can dimly remember hedging my bets several months ago by telling y'all it was possible the Dow would touch 13,000. That could happen, but stocks are still headed down. Proof is that on a surge nearly to 13,000, the Dow in Gold Dollars remains in the middle of its recent trading range, down about 60% from the August 1999 high. Against silver stocks have fallen even further from their high, and that trend isn't half way over. Swap stocks now for silver & gold.

Monday may hand me my head, but there's a good chance in my eyes that we may have seen the stock high today, or will see it in the next two days. The whole move from the March lows may have been a correction of that fall from 12,795 to 11,939. If so, trouble for stocks starts soon.

The DOW IN GOLD DOLLARS is whispering that stocks will gain against gold, but not much. Maybe the DiG$ will climb to the top of the recent range at G$394, but that's about it. G$400 (19.35 oz) will surely stop it.

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.