Wednesday, May 30, 2007

GOLD has a Couple More Days of Humiliation Before it Pierces that 50 Day Moving Average at 674

GOLD has a couple more days of humiliation before it pierces that 50 day moving average at 674, I suspect. Right now I'm thinking it bottomed last Thursday, so as long as it doesn't close below 651, I'll stick with that. A close over 667 will make the shorts start sweating, a close over 674 will send them to cover. The big fight will come at 692, because if gold closes above that even the Nice Government Men will have a hard time stopping it.

Best part of today was SILVER'S refusal to give up the territory it won yesterday. It's to be expected that the shorts would counterattack after yesterays 23 cent rise, but they couldn't drive silver down. Couldn't even break 1300 -- low was 1301. Momentum now rests on silver's side -- above us only the sky & the 50 DMA at 1348 where also old resistance broods. Burst your bonds, silver! Rise! Rise!

The GOLD/SILVER RATIO co-operated by dropping again today, a good sign for strength in metals.

Look, O, look & ponder the Dow in Gold Dollars. Yesterday it crept thru G$425, and today leapt to G$431.51 (20.87 oz). That's only about five bucks (1/4 oz) away from the last high at G$435.90 (21.09 oz.). This much is clear: if the DiG$ closes above that old high, then it will run for the 1999 - 2007 half way mark, about G$475 (22.98 oz). That can happen by gold stagnating or dropping while the Dow rises. I haven't a clue how it will resolve. I'm waiting on the market just like y'all are. If the DiG$ stalls at G$436, then fails (by closing below G$425, then G$415), it will be Katy-bar-the-door for gold, & it will rally all summer.

The Dow today rose 111 points to close at a new all-time high of 13,633.08. The S&P500 also hit a new high for the move, 1,530.23, but still has not exceeded its 1,552 high of March 1980. I've seen this sort of move before, in gold & silver in December & January of 1980. Folks, this is not continuation action, but blow-off topping. Keep watching, keep swapping stocks for silver & gold. Do NOT try to short stocks. Timing is everything, & in this sort of move timing is too unpredictable.

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.