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Wednesday, February 28, 2007

This is Not Any Time to be Putting Off Buying Silver & Gold

If SILVER & GOLD PRICES can hold onto their reaction lows of yesterday (662 & 1414.5), we may have seen the the worst of the correction already. In any event, I don't expect to see them drop below 1380 & 650. This correction could last several weeks, or, if panic sets in, it might be completed instantly. This is not any time to be putting off buying silver & gold.

The Nice Government Men (NGM) on the Plunge Protection Team must have gotten busy today protecting capitalism. I mean, that's what capitalism is all about, isn't it -- protecting the capitalists?

Helicopter Ben Bernanke was certainly busy, exercising one of the only TWO weapons in his entire bogus Central Bank arsenal: blarney. (The other is inflation.) When the sheep grow tired of being fleeced and threaten to run out of the pasture, the shepherd soothes them with blarney. The blarney always assures the sheep that everything is all right & things will be just fine, and the sheep find the shepherd's voice most comforting (they don't know he is a carnivore).

Anyway, y'all aren't sheep, so y'all know better to believe anything any government official says. Somebody once told me a fool proof method to tell how a US Attorney is lying -- his lips are moving. Same holds true for all government & central bank officials.

What you have actually seen in stocks is the end of the rally that began at the bottom in October 2002. Now, it will take a while for a market as huge as that for stocks to roll over, but roll it will. Before it resumes its downtrend, it will probably make another peak, perhaps as high as the last one. Then it will drop like a stainless-steel anvil out of a 747 jumbo jet. If ever y'all listened to me, listen now: swap stocks for silver & gold.

Let me paint this picture for y'all with the DOW IN GOLD DOLLARS. Today the DiG$ stands at G$379.72 (18.37 oz), below its 17 day moving average at G$391.08, below its 50 DMA at G$403.98, & below its 200 DMA at G4390.62. All the MA-s except the 200 are headed down. Know what that means? In all gigantic likelihood, the Dow is gonna drop like a lightning-struck buzzard against gold. (I'm feeling particularly metaphor rich today.) Stocks aren't doing too too well against silver, either.

The US Dollar index turned up slightly today, but nothing meaningful. Direction still firmly down. Silver and gold show big drops according to their closes today, but as I pointed out to y'all yestere'en, they fell off in the aftermarket. If we compare yesterday's 662 and 14.145 later aftermarket prices to today's aftermarket, silver and gold actually rose today. (As my friend Barry P. says, Closes mean nothing because the market never stops. I disagree, but here's a case where he's right.)


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://the-moneychanger.com/

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.



Tuesday, February 27, 2007

As Long as the Gold Price Remains Above 650 and the Silver Price Above 1380, the Rally Remains in Force

Today's terrible fall in stocks gives me no pleasure; it brings too much pain to too many people. The three major US stock indices -- Dow, S&P500, & NASDAQ - fell about 3.5%, losing all they had gained so far this year. This was the worst fall since September 20, 2001, after the 9/11 attacks, and the biggest volume ever for the NYSE & NASDAQ. At once point the Dow was down 546 points. From 2:45 to 3:00 it lost 200 points. Yes, this is what a panic looks like. Wonder how much it would have fallen without the Nice Government Men in the Plunge Protection Team?

The DOW IN GOLD DOLLARS plunged nearly half an ounce to G$369.25 (17.86 oz) but, as I'll explain below, silver & gold dropped after the closes. Based on the current price, the DiG$ stands at G$381.47 By the way, the DiG$ behaviour has been pointing to a big drop in stocks. I hate to say it today, because it sounds like "I told you so," but y'all still ought to sell stocks for silver and gold.

Technically the Dow has support at 12,000, and then at 11,000. Not much in between. Expect the NGM to be busy supporting stocks tomorrow.

The US Dollar plunged 47 basis points today to close at 83.46.

When one market experiences a strong crash, the panic inevitably bleeds over into other markets. The margin-called throw everything they have onto the fire, trying to raise money. Silver and gold had not done badly by closing time (1:30 Eastern) with silver down 14.5 cents to 1454.50 cents & gold down 2.70 at 683.90. In the aftermarket, however, they were whupped. Gold ended the day at 662, down 24.60, and silver wound up at 14.155, down 54.5 cents.

Y'all calm down. As long as the GOLD PRICE remains above 650 and the SILVER PRICE above 1380, the rally remains in force. In fact, I seem to remember mentioning those numbers and warning that a correction loomed shortly ahead.

Thinking back on the April 2004 high and the May 2006 high, and the breaks that followed them, you would have done well to buy after the first few days of the break, when things looked absolutely the most devastated. Market proverb says, Buy when there's blood in the streets. Watch closely now. First target to buy if it drops gain tomorrow for silver is 1380 and for gold is 650, if they go that low. Of course, this might have been a one day phenomenon, but that will be evidenced by much higher prices tomorrow, if that is the case.

That the break came from China adds to the poignancy. Bear always in mind that no economy makes the gains claimed by the Chinese without lots of buried corpses in the form of malinvestment. Because it is state run & state-run enterprises are state-financed, there are huge bad debt/investment problems that have so far been covered up. The Chinese miracle has never been all it's been cracked up to be. Stink isn't over there yet.

News stories today mentioned US buyers were running into bonds for "Safety"? Disinformation planted by the NGM? With the US $ down 50 basis points & panic rampant, I wouldn't be surprised. Anyway, running to US Bonds for "safety" is like running to Vlad the Impaler for "mercy." Won't find it there.

Will buyers run into gold for safety? Possible, but I'm not sure we are deep enough into this bull market, or that enough of the public recognizes that bull, for them to run into gold for safety now. It they do, it will be a mess, and gold will run to $1,000 even faster than I expect.

Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



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"
http://The-Moneychanger.com

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.



Friday, February 23, 2007

Is There Still Time to Buy Silver & Gold?

The SILVER & GOLD PRICE performed superbly this week, up 4.5% and 2.1%. Silver outperformed gold this week, a sign the rally is picking up steam.

Is there still time to buy silver & gold? Yes. Both have confirmed breakouts above 667 and 1406. Gold will run for 720 - 760 and silver for 1500, very, very quickly. At those levels they will probably back off for a short correction, then rush ahead for $1,000 & $24.00. Sounds crazy, right? Not nearly as crazy as it sounded when gold was $252 and silver $4.01.

GOLD/SILVER RATIO fell this week, to a new low for the move. This is all in order, but we are waiting for a price below 35 to swap again.

It was a very instructive week.

In STOCKS, the Dow made a new closing high at 12,785.52, but closed the week lower than it began. A break into new high territory with a lower close is called a key reversal, or more accurately, the first half of a key reversal. The other half will be fulfilled if the Dow closes lower again next week. The dow has already broken through its last high, so now it's looking at support arund 12,600 - 12,580.

Breaking that will take it down to 12,360 - 12,2340. The Dow is in the process of topping, I suspect, but with no confirmation of a down trend yet and a recent Dow Theory signal of an uptrend. My advice? Swap stocks for silver & gold just as fast as you can do it.

The true situation, the one behind the veil of nominal dollar prices,can be seen by looking at the DOW IN GOLD DOLLARS. This week it dropped through its 200 day moving average (about G$390 or 18.87 oz) for the first time since last September. I say it marks and confirms the end of the DiG$ rally and beginning of a new fall. The DOW IN SILVER OUNCES dropped 5.1% this week.

Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Thursday, February 22, 2007

The Gold Price Will Now Run for 720 and Probably Overshoot. Ditto Silver for 1500

How do the closes we saw today in silver at gold prices -- nearly even with yesterday's prices -- differ from the "double close" I noted a few days ago I take as sign of a turnaround? Context, mostly. When a market is fighting its way up or down, with days that show big bursts of movement, and then the market clears some barrier (as gold did 667 and silver 1406) to run hard for a new high, it's normal that it will give up a little the next day and catch its breath. Or even drop back almost to the breakout point, and then resume its move.But when a market is ambling and shambling, moving mostly sideways without much strong action, a double close often marks a turnaround.

SILVER and GOLD PRICES
remain in good shape. The rally has unfolded much as I expected. Gold will now run for 720, and probably overshoot. Ditto silver for 1500.

Somebody asked me today if it wasn't too high to buy? As Jesse Livermore observed, quoting an old market proverb, "Prices are never so high they can't go higher, or so low they can't go lower." This is exactly the time -- an upside breakout -- that you do want to buy a market.

The DOW IN GOLD DOLLARS broke yesterday below its 200 DMA (today G$390.01 or 18.87 oz) and closed yet lower today at G$385.99 (18.67 oz). What signifieth that? It confirmeth that the DiG$ has reached the extent of its long upward correction, and headed back down in a new downtrend that will take it below the last low of roughly G$330 (15.96 oz).

STOCKS continue to grind back and forth, relentlessly higher with relentless disappointment. Another 30 days or so to the top, at most. Still time for y'all to swap stocks for silver & gold.


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Tuesday, February 20, 2007

Gold's Must Hold Point is $650 and Silver's is 1350

Bet y'all's stomachs did some flip-flops today, huh?

Remember on Friday I wrote that SILVER and GOLD PRICES might have a shallow correction this week. Well, "shallow", I reckon, is relative. Both gold & silver prices fell back today toward strong resistance.

Gold's must hold point is $650 and silver's is 1350. Gold's low today was 655.40 and silver's was 1364.

Remember that bull markets always climb a wall of worry, so the bull will try his best to terrorize you with this correction. Remind yourself also that it is normal for a market to make two or three tries at big resistance. After last May's highs, silver and gold stand before the next highest highs. It's clear they would have to challenge 1406 and 667 more than once.

On Wall Street joy reigned with another new all time high for the Dow. What can I say? Stay out of the way.

The DOW IN GOLD DOLLARS also rose today, above G$400 (19.35 oz) to close at G$402.22 (19.46 oz). To put this into perspective for y'all, think about this. First resistance begins around G$417 (20.17 oz), or nearly G$15 (about 3/4 oz) higher. Next serious resistance comes in around G$425, then G$436 (21.09 oz). So far, we're a long way from there. As it stands, I have to conclude that stocks may stay up quite a while longer, a month or more, but they aren't likely to gain much on gold.

Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Friday, February 16, 2007

Gold and Silver Could Correct Next Week

Let the world be silent, and let the week speak! Silver & gold made only tiny gains this week, which I will rationalize -- whoops, make that "explain" -- below.

SILVER & GOLD PRICES have both broken out to the upside in Euros and Yen and dollars. What signifieth that? That gold's strength swelleth not merely against one currency or in response to one currency's move, but against all fiat currencies. Confidence in government money is falling.

The GOLD PRICE next week could correct shallowly, or it could bull its way right on through 670 and stretch its legs toward 720, the old high. Correction will hurt nothing -- scare the tourists but not the natives -- as long as it holds above 650.

Bear in mind that although 720 was the last high, it's true import doesn't lie there. That price was the highest reached in 1980 except for seven trading days. In other words, it was the real peak, while the 850 high was the overshoot. Therefore once gold pierces 720, 850 will be no more than a wet cardboard barrier against a .44 magnum.

The SILVER PRICE kept on chugging away last week. The whole area between 1380 and 1406 has proven stiff resistance, but above 1406 - 1420, silver will run. It might surprise all of us and race clean through 1500 without even slowing down. Like gold, silver could suffer a correction next week, but all that's needful is holding 1350.

The Dow went to another new all-time high -- ho-hum, while the US Dollar index plunged the depths of despair & contempt. Gainer of the week -- O, it paineth me to speak it -- was the Dow Industrials. Yet it pays to look behind the screen of events to ask whether things are really as they seem.

The US DOLLAR INDEX made a new low this week at 83.94 -- below the bottom channel line, below the 50 day moving average (84.29), below the bottom of the Bollinger bands. It was just "Look out below!" all week long. My guess is 'twill look the same next week, too, since this week broke 84.50 support. All indicators indicate (did y'all notice that little bit of bureaucratese?) the buck has much further to fall -- to the January low at 83.17 or, quite likely, the December low at 82.35. Chart has an evil, bilious look to it. It ought to leave any dollar holder "apprehensious."

STOCKS (taking the Dow Industrials for their proxy) posted a new all-time high this week. Of course, all those other indices for which the Dow kindly proxies are nowhere near such levels. Far's I can see the Dow has not topped yet, but is long overdue for a correction. Top could come anytime, but it will be hard to recognize because it will take a long time -- couple of months -- for the Dow to roll over. Meanwhile other indicators keep whispering to "take the money and run" from stocks.

DOW IN GOLD DOLLARS rose nearly G$5.00 (0.234 oz) this week, but sluggishly. That could collapse at any time, perhaps next week, screaming to those with ears, "Swap stocks for silver & gold!"


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



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"
http://The-Moneychanger.com

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.



Wednesday, February 14, 2007

End of February Could See the Gold Price Knocking at $720 and the Silver Price at $15

The Moneychanger is ill today, but comments from his bed of pain:

GOLD and SILVER PRICES are determined to go higher, possibly tomorrow. End of February could see the Gold Price knocking at $720 and the Silver Price at $15.

The US Dollar Index broke down. If it doesn't stop at 84, it may return to the last low. The Dow made a new high today. We are not impressed. The Dow in Gold Dollars barely moved.


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Tuesday, February 13, 2007

The Rally in Gold and Silver is On!

The GOLD PRICE knocked at the 667 gate again today, but couldn't quite break through. Remember that the more times it hits that level, the greater the likelihood it will break through.

The SILVER PRICE left gold in the dust today, jumping up 20.2 cents. Tomorrow it will probably hit 1406, but may not pass the barrier on the first try.

Friends, I want y'all to think about this. You have been watching silver and gold push relentlessly higher, climbing that bull market "wall of worry."

Forget the worries -- the rally is on!

The US DOLLAR INDEX ran up to its 200 day moving average today and then collapsed, ending down 42 basis points & back at the bottom of the range. The range, by the way, is tightening, so expect some resolution up or down soon. I'm guessing it will rise, but that's only a guess.

STOCKS today put in a sad performance, rising 102 points on early news that BHP Billiton & Rio Tinto are thinking about buying Dow component stock Alcoa. Why do I call that sad? Well, think about it. A person who would buy Alcoa on that news is a hopeless victim, chasing a market. A deeper look shows that the Dow only rose to last Wednesday's highs and put a nice triple top on the chart. Tomorrow the Dow must advance again, through 12,700, or the triple top becomes the only explanation.

The DOW IN GOLD DOLLARS rose slightly today, to G$394.03 (19.06 oz), yet remains in its broken-downness, having fallen through G$400 and nearly touching its 200 DMA. To confirm the downtrend the DiG$ needs to close below 388-390. Anticipating that, I would swap stocks for silver & gold. (Only exceptions would be precious metals stocks, or special situations, like a company with a cure for cancer.)


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Monday, February 12, 2007

If the Gold Price Remains Above 650 and the Silver Price Above 1350 - No Big Downside is Coming

Friday I was too prideful about SILVER and GOLD PRICES. After such a big move, they were entitled to back up a few steps, & I should have thought more about that happening on Monday.

However, let us put this in perspective. The GOLD PRICE backed up, but remained above 660. The SILVER PRICE backed up, but closed at 1367.90 just above last week's low.

Get the picture in your mind's eye? It's a series of higher highs and higher lows -- in other words, an uptrend. As long as the gold price remains above 650 and the silver price above 1350, no big downside is coming. Upside I'm watching 666 & 1406. Once those are breached, the fireworks will really go up.

Owwch. The GOLD/SILVER RATIO took a licking today. It rose even higher in the aftermarket (silver at 13.62, down 5.9 cents, and gold at 661.60, down a buck). Metals may fall a bit more tomorrow.

In a primary bull market (such as silver & gold are now in), the best strategy is to get long and stay long, buying more whenever you can. In a primary bear market (such as the dollar's & stocks' currency markets) the best strategy is to get short and stay short, selling more whenever you can.

The US DOLLAR INDEX smacked in the head my last Thursday's suspicions that the buck was about to drop further. Today it ran up to the top of the range (84.5 - 85.2). This back-&-forth can drive you crazy, so you just have to steel yourself to remember that none of it means a hill of beans until it closes above or below that range. My guess is, 'twill break out finally to the upside, but I'm not willing to put money on that.

STOCKS are making up for all those days they worked relentlessly higher by working relentlessly lower now. They will surely make a stand at Dow 11,200. Whether they will get that far this go-round remains to be seen. What y'all shouldn't miss is that the DOW IN GOLD DOLLARS sank last week nearly G$10 (1/2 an ounce) & stopped only gold pennies away from the 200 day moving average. A bounce off that is predictable, but it didn't bounce much today. That DiG$ drop makes another witness for my advice: swap stocks for silver & gold.


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Friday, February 09, 2007

Gold and Silver Broke Out - Gold May Challenge $700 Next Week

Lo, & behold! SILVER and GOLD PRICES have broken out! Note how dramatically things have changed in just one week. Last Friday silver & gold appeared to collapse -- the day after the Dow hit another all time high. But what happened in a week?

On 14 July 2006 the GOLD PRICE made its highest high during this post-May correction: 666.60. Today, it beat that high, closing at 667.50. Not by much, but higher. This final confirmation blows back in the croakers' & doubters' faces all question whether the gold price really is rallying. Wait, wait -- obviously gold cannot stop here. It must make good its gains by continuing to rise. That we ought to see next week.

However, if the gold price falls back next week, it would only signify that it needs breathing space for one more try and final breach of 666. That's not what I expect to see. I expect to see the gold price gaining next week, perhaps even challenging 700.

In December 1381 - 1386 stopped the SILVER PRICE cold, & again last week. Therefore 1380 became the number the silver price had to beat, and today it did, closing at 1387.9. Next week, probably early, silver ought to challenge 1406 (the post-May high) & plunge through. Recall, if y'all will, that for a long time I have been repeating that very little resistance lies between 1500 and 2400. Y'all ponder, yea, weigh what that means. Right, that once the silver price clears 1500, it will run like a scalded dog for 2400.

STOCKS made a double close this week, always a fishy manoeuvre that smells of "turnaround." Turnaround they did. Whether this signifies the end of stocks' rally I don't know, but they are certainly ripe for a huge correction. 11,200 will be the key line to hold for stocks, because beneath that lieth only -- air.
Today the DOW IN GOLD DOLLARS dropped to G$389.62 (18.85 oz), only gold-cents from its 200 day moving average at G$388.71. Dropping through that 200 DMA will strongly confirm that the DiG$ is locked in a downtrend, and that it will not revisit G$475. That drop the DiG$ ought to see next week early.

The US DOLLAR INDEX continues to fiddle back & forth between 84.50 & 85.20. Nothing happens until it breaks out of that range -- upside bringing higher prices, downside lower.

The GOLD/SILVER RATIO has been dropping all week, in harmony with the metals' upmove. About the only worry on the horizon is the mushiness of premiums on physical silver & gold. On the wholesale buy side US 90% silver coin has sunk to a 65 cent an ounce discount, while American Eagle gold coins have dropped to 1-3/4%over gold. These mushy prices don't settle the question, but they do raise one. Where is the physical demand that ought to be raising the bids wholesalers are willing to offer to cover rising investor demand? Maybe it means nothing, but it is one of the signs I watch. By the way, no immutable law of nature decrees that those premiums must rise as metals rise. However, they seem awfully low for the start of a big rally, & so flash a caution light.


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Thursday, February 08, 2007

Tomorrow Bids Fair to be the Day Gold Closes Over US$666

New high closes for the move today for SILVER and GOLD PRICES. Tomorrow bids fair to be the day gold closes over US$666. In the aftermarket it is trading up 2.30 at US$660.30. GOLD/SILVER RATIO is moving down, confirming silver & gold's move up.

Oooooo. The US DOLLAR INDEX rose to 85.03 today, then closed lower. Y'all know what that means, huh? First half of a key reversal, 'tho I don't know if you could rightly call it a key reversal when it occurs in the progress of a downtrend. Anyhow, whenever anything breaks to a new high for the move, then fails, it's bad juju. You can hear the war tom-toms beating in the background.

STOCKS, you will remember, left me suspicious yesterday with a double close. Turns out my doubts may have been justified, as the Dow sank slightly today. Look for more fun on the downside in the next couple of days. Whoops! Wear your rubber boots, as there's likely to be quite a bit of blood flowing. May return for one last gasp, but maybe not.

I have two charts I'd like for y'all to see. One is the Gold-Silver Glory Box that compares gold & silver to 5 different stock indices since 1999. The other is the Dow in Gold Dollars since 1996. They say a picture is worth a thousand words, but the only words these two pictures speak are, "Swap stocks for silver & gold."DOW IN GOLD DOLLARS closed today at a new low for the move, G$397.13 (19.21 oz), headed for the 200 DMA around G$388.

(Charts coming soon.)


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Tuesday, February 06, 2007

Silver Price Should Challenge 1380 & Gold Price 666 Again This Week - The Last Barriers to a Runaway Rally

Today the SILVER PRICE performed as requested, and closed well above 1350 at 1363. The GOLD PRICE followed suit with a close above 650 at 653.60. This is a nailbiter, but markets usually try two or three times to break through strong resistance (or support, when they're falling). But the more times it tries, the greater the likelihood the resistance will crack. The silver price should challenge 1380 & the gold price 666 again this week -- the last barriers to a runaway rally. I would still buy this breakout, unless you want to pay more later.

The US DOLLAR INDEX hit 85.18 early today, then fell the rest of the day. I can't figure it out. There's some BIG seller at 85 - 85.20. Or maybe the Nice Government Men don't want the dollar to climb? But why? I thought it looked ready to challenge 86.50 again, but today's flop calls that into question.

Here we go again. The Dow nearly makes a new high but the Dow in Gold Dollars fell again today. It stands below its 50 & 17 day moving averages, and only about G$12.00 (about half an ounce) above its 200 DMA. The chart shows a series of 3 loser highs. Any close below G$390 (18.86 oz) or the 200 DMA will make a breakdown. Get out of stocks before they get you.

Swap stocks for silver & gold. I get peppered continually for panning stocks, so I looked at the charts harder today for encouragement, but couldn't find it. Yes, an uptrend is in force that keeps edging up pennies a day, but how aged it looks. I think holding 11,200 is the key. A big break is due here soon, even if it does not mark the top.


Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.



Monday, February 05, 2007

The Trend is Up. Keep On Buying Gold and Silver

Last Thursday SILVER & GOLD PRICES rushed to new highs, then crashed on Friday. The GOLD PRICE ran up to a 667.20 high on Thursday, which was the July high. Resistance there ganged up on gold and on Friday drove it down to 646.00. Today gold rose back to critical resistance at 650.90. That's good, but it needs to close over 652. Gold's chart appears to be in an uptrending channel, but the RSI and MACD indicators are ambiguous or pointing down. Tomorrow will be a tug of war over this 652 close. If gold climbs through that, the rest of the week will show higher prices. If not, then a week of lower prices will come. Think about this: It could drop all the way to 620 tomorrow without breaking down out of the channel!

The SILVER PRICE is lagging on this advance, & silver's chart doesn't look as bullish as gold's right now. It hit 1380 resistance on Thursday, with a high at 1383.5, but dropped to a 1320 low on Friday. Today it recovered 18.8 cents, to 1351.5, but it has been here before. It must pierce this level and move higher. Above 1380 the next resistance is 1406. On Thursday silver was also bouncing off a falling trendline from last spring's high. A move to 1400 would crash through that resistance. Like gold, silver is sitting on top of its support/resistance, and must move higher tomorrow or fall back. Interesting that on Friday the silver price just kissed off its 50 day moving average (13.22) and then today bounced up.

Yes, indicators for both metals are talking out of both sides of their mouths, but the trend is up. Keep on buying gold and silver.

STOCKS made another new high last week, at 12,673.68, but this came as no surprise. My 12,650 target for this move has now been exceeded, and the Dow could worm its way up as high as 13,000. "Could", I say, to leave the way open for possibilities. I don't expect that. Sometime this quarter, or this half at the most, stocks will turn back down and begin breaking more hearts.

At the Dow's new "high" last week the DOW IN GOLD DOLLARS wasn't even above G$400 (19.35 oz). At its closing G$398.81 (19.29 oz) it was 57% [sic] below its all time G$925.42 (44.77 oz). high posted in August 1999. This suggests, no, screams that y'all should swap stocks for silver & gold, before you forever miss your chance.

The US Dollar index made a low last Thursday at 84.40, then on Friday made roughly the same low, plainly pasting a double bottom onto the chart. No surprise, it rose today, and this week should head for the last high at 85.25 right smartly. Notice once again that what all the gurus know is so, ain't. Dollar & silver & gold are all rising at the same time. Silver & gold are now acting as completely independent alternative currencies.

Argentum et aurum comparenda sunt --
-- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

"Buy Silver and Gold Coins at the Best Prices"
http://The-Moneychanger.com

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.