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Thursday, May 31, 2007

Have Gold and Silver Finished Their Correction and Turned Back Up?

The situation remains dicey, but SILVER & GOLD performed perfectly today. Silver now has two 20 plus cent days out of the last three, & is positioned to smash through 1350 resistance tomorrow.

For Gold the 660-662 area was a bottleneck on the way down, so should be one still, but the real resistance awaits at 667. Silver closed today barely above its 50 DMA (1340.9 vs. 1340.04 for 50 DMA). The GOLD/SILVER RATIO sank again sharply today, also a helpful move.

It is still too early to call it certain because yet another drop is possible, but I believe metals have finished their correction and turned back up. I would buy here.

Alone among the stock indices the Dow Jones Industrial Average dropped today. A small drop, to be sure, but on volume that has been declining slowly since 21 May. The first owl hoot of winter? The first crow caw of fall? Who knows? It looks like a broadening top to me, but experience hath shown that such formations may take a long, frustrating time unfolding. My idea? Swap stocks for silver & gold -- you'll be glad you did.

By the way, stocks are outrageously overbought, according to the RSI & MACD. Look at this: the Dow in Gold Dollars fell back today to G$426.90 (20.65 oz), support, from its charge yesterday on the G$436 high. If it were going to fail at that old high, this would be perfect behaviour. (Yesterday's DiG$ was G$431.51.) If the DiG$ fails here, it would signal that gold is about to enter a time of outperforming stocks.

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, 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"
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, May 29, 2007

This is the Sort of Hint Silver and Gold Give When Turning Around

I'm sure SILVER & GOLD PRICES could have performed better today, but I don't know how. This is the sort of hint they give when turning around. Silver blasted up strongly (22.3 cents) to close above 1305 resistance that before had stymied it. The GOLD/SILVER ratio dropped abruptly (50.665 to 49.863). Yes, gold might not have closed above resistance at 661, but precious few days bring everything good. Silver is warning that a rally lies ahead. Whether it be strong enough to breach 1500 and 720 for gold, we'll see, but in any event here's the strength I was expecting. Tomorrow should bring higher prices as silver leads gold forward.

The US DOLLAR INDEX today fought off an early morning attack, fell back to 82.05, then rallied back to 82.35-ish. Dollar's pattern is now higher lows and higher highs, but it is stuck at 82.35 resistance. Must be an awful lot of people who distrust the dollar out there, all waiting to short it again at 82.35. At some point the dollar will win, at least for its little rally for the next few months.

STOCKS remain as overvalued as ever, & climbed a meager 14 points today (Dow 13,521.34). Tomorrow the Dow will try to reach its last high at 13,564. See what happens then -- if it fails, then it places a double top over the market. Whatever happens, 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, May 25, 2007

More Downside, and the Last of it, Next Week. Get Ready to Buy.

SILVER & GOLD broke down this week, but without breaking down. They have been correcting since the last week in April, so I believe that correction must be somewhere near its end. Where will metals bottom? I don't know, but if they don't hold the current levels (650 & 1280) look for a gold low around 640 or 635 (my lowest number) and silver around 1245 or 1220.

I stress that these are POSSIBILITIES not predictions. If silver lounged around 1280 next week and gold around 645-650 & that was the bottom, I wouldn't be surprised, but I do expect some more downside, and the last of it, next week. Get ready to buy.

I keep on getting questions like, "Is this the end of the bull market?" This is typical of long corrections: people begin to lose heart. But the silver & gold bull market isn't more than six years old, and has at least another six years to run. Bulls always try to shake off everybody possible. This is NOT the end of the silver & gold bull market, and it is NOT the beginning of a new bull market in stocks. Rest assured.

Step back a moment and remember the significance of daily closes and of weekly closes. For all the talk, the huffing & puffing, the highs & lows, the question remains, What's the score at the end of the game?

For the first week in a long time, stocks were down. This week's Dow obviously topped on Wednesday, & has turned down. Y'all will see lower stock prices next week. Stocks are blowing off to the upside, & have much lower prices in their future this year. Have we seen the top? I don't know, but a correction is coming next week, I'm pretty sure. Make sure you are not long stocks, or, if you must be, make sure you have close stops beneath them. But say -- what are you doing owning stocks anyway? Swap stocks for silver & gold.

The US DOLLAR INDEX is the next big story. The buck is fighting like a wildcat, trying to get thrugh 82.35 resistance, but without much success. Should make it through next week & begin rallying in earnest. Dollar should rally 3 - 6 months. Will that kill gold & silver? I don't think so. Over the long term silver & gold move opposite to the dollar, but in the short term they can run in the same direction for months.

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, May 24, 2007

This is the Time to Buy Silver & Gold, Not to Sell

Careful! Something wicked this way comes ---- it is the Spirit of Low Profit Trades, come to suck the money out of your pockets while you watch. No market rose today, except the much despised dollar. Stocks fell, gold fell, silver fell. It was a fell day.

Out of the last four trading days, the Dow has hit a new all time high, but also dropped 3 out of 4 days. All stocks indices were down today. The S&P 500 which only a few days ago made a new high at 1525.10 (barely approaching its 2000 high at 1552), today languisheth again near 1,500. Stocks are incredibly overbought, but in a blow-off top which can go anywhere. Stay out of the way. Swap stocks for silver & gold.

The US DOLLAR INDEX closed today at 82.411. Slowly but surely it has conquered the old low at 82.35. Dollar's course is now upward for a time -- but only for a time. Its long term course is lower toward oblivion.

SILVER & GOLD today broke ---- gold to a new low for the move, silver only to its lowest point of the move so far. Gold faces a lot of support between here & 635, but that's where it seems headed. I doubt Silver will drop lower than 1245. You are now witnessing the worst of this correction, and it will likely last a week or two.

A curse? No, a blessing. The correction shakes silver & gold out of weak hands and into strong, paving the way for another rally. Rest easy. The long term bull market in silver & gold remains fully intact, and has at least another 3 -5 years to run. This is the time to buy silver & gold, not to sell.

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, May 21, 2007

Gold and Silver Prices May Have Bottomed

SILVER fought off early in the day attempts to break it and shot from 1280 through 1300 to 1305.7. Last Thursday silver touched below its 200 DMA (1288). For the first time lately I feel comfortable saying silver may have bottomed. If so, it will climb tomorrow & the rest of the week. Buy some now.

GOLD could have bottomed, too, last Thursday at 654.10 (intraday, not closing). I can say the same for gold that I said for silver: if it has bottomed, it will climb the rest of the week. If not, it will close below 660 and silver will close below 1300.

The US DOLLAR INDEX closed today at 82.356, right at the December 2006 low, & is challenging the 50 DMA (82.47). Above stands resistance at 82.65 - 83.36, then nothing much until 84.38. Tomorrow the dollar should close above its 50 DMA and begin to run in the rally I've been expecting.

STOCKS had a confused day. The Dow dropped 13.35, the S&P500 rose 2.35, Nasdaq Comp rose, and the Nasdaq 100 rose. A big correction is coming, whether it ends this rally or not. While it is still possible, 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, May 18, 2007

Silver and Gold Fighting to Hold On.

Gold Price Close Last Week : 670.60
Gold Price Close This Week: 661.00
Change: -9.60 or -1.4%

Silver Price Close Last Week : 1321
Silver Price Close This Week: 1298
Change: -23.00 cents or -1.7%

SILVER & GOLD PRICES have teetered in a make it or break it situation for a long time without doing either. Alas, time & markets wait for no one & no thing. I somewhat mistrust today's rise, since silver didn't close over 1300 -- bad for morale. First two or three days next week silver & gold will be fighting to hold on. If we haven't already seen a bottom, we should then. I expect to see a pattern this summer contrary to the regular seasonal pattern, with prices rising thru the summer.

Time to stop & look under the walnut shells for the pea. (The Fed & the US government are cheating you in the shell game of inflation.)

Look at that stock market! The Dow Jones Industrial Average has risen from 11,722 in January 2000 to a new high today at 13,556.53. Nay, O unanalytic one! Thou art deceiving thyself. Ponder:from the 1/2000 high the Dow has gained 15.7% -- great, huh? You'd like some of that, huh? But in order to keep pace with inflation, the Dow today would need to be 13,988.80, up 19.3% from 2000.

Consider the whole picture in real money: gold. On 14 January 2000 the Dow in Gold Dollars stood at G$853.59 (41.29 oz); today the Dow costs only G$423.96 (20.51 oz). In other words, the Dow has fallen 50.3% against gold.

On 14 January 2000 the Dow cost 2,293.23 ounces of silver; today it costs 1,044.42. Stocks have dropped 54.5% against silver. Stocks haven't gone up -- the dollar has gone down.

All the gains in stocks since 2000 are an illusion. A will of the wisp. All those who continue to allow themselves to be hypnotized by numbers instead of realities are fated to lose their capital. "In a bear market, money returns to its rightful owner." Swap stocks for silver & gold.

The US DOLLAR INDEX dropped this week below 82, but speedily climbed back to test 82.35 again. This try bounced off and it closed today at 82.175, but it will try again soon, and probably break thru to higher prices. A dollar rally is coming, I believe, but do not assume that means silver & gold will drop. They can quite easily run along with silver & gold for a while, up or down, as we've seen in the past.

Y'all enjoy your weekend.

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, May 17, 2007

Gold and Silver Seem Headed For Their 200 Day Moving Average at 635 and 1279

In a perverse way, the IMF's sales-sabre rattling in fact bodes well for the gold market. Think. The IMF never sells any gold, they only make announcements well-timed to knock down the gold price. In other words, the IMF is the stalking horse for central banks, employed to talk gold down. But wait a minute -- if gold is so weak, why does the IMF need to jawbone down the price (using Samson's weapon, of course)? That's where things go upside down. If gold is falling and the IMF still makes selling gurgles & gulps, what can it mean but central banks are afraid gold is about to run away?

GOLD today sank to 656.20, down four bucks, while SILVER dropped four cents to close at 1280 cents. Both metals seem headed for their 200 day moving averages at 1279 and 635.14. For several days now silver has repeatedly touched that 200 DMA & bounced off. A spike through it down to 1250 might mark the end of this.

A friend called today to ask if I thought gold & silver were in trouble. He said my commentary yesterday sounded as if I thought they were. If it did sound that way, it sounded wrong, because nothing has happened to convince me that silver & gold are not in long term bull markets that will last at least another five, and probably another 10 years. I mentioned those lowest correction possibilities, gold at 500 & silver at 950 cents not because I expect to see those. Rather, I was trying to point out that they could drop that low & lower without damaging their uptrends.

No, the metals bull market is not over by any means. Watchful investors will use this as an occasion to buy silver and gold.

STOCKS today dropped, both the Dow & S&P500, but without much meaning. The closing Dow in Gold Dollars (DiG$) rose to G$424.55 (20.54 oz). As I said yesterday, if the DiG$ doesn't turn around quickly, it will run for the Half-Way Mark at G$475 (22.98 oz). I would still swap stocks for silver & gold. If stocks rise even higher against silver & gold, that will make the swap even more attractive.

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, May 16, 2007

Unless SILVER & GOLD Turn Around Tomorrow, They are in Danger of Slipping a Long Way

Unless SILVER & GOLD turn around tomorrow, they are in danger of slipping a long way. The Nice Government Men, too, have greased the floor & pushed, as usual. The IMF, which for nearly two decades has threatened to sell gold but never sold any, on Monday threatened again to sell 400 tonnes. Am I just suspicious, or do y'all, too, find it odd that the IMF never makes these announcements except when the central banks need gold to be waylaid & whupped?

Today somebody sent me an article by a technical analyst who remarked that if gold & silver broke here it would be "the end of the bull market." I don't get this. Apparently this fairly sophisticated analyst doesn’t know that bull markets last more than 5 or 6 years. And that from time to time they have very scary corrections. As I have already told y'all, it is possible that gold might fall to US$500 & silver to 950 from here. I don't expect that to happen, but it's possible. More likely is a drop to 635 & 1250. The next couple of days are critical, & will tell us much. I can tell you this: substantial physical demand has appeared at these prices. Buyers are hanging over the market like vultures ready to buy every price dip.

SILVER is volatile. It moves fast, up & down. If you can't stand that heat, stay out of silver's kitchen. The GOLD/SILVER RATIO rose today to a new high for the move. If it moved to the top of the trading channel at 52.5, and gold dropped to 635 (its 200 DMA), silver would be at 1210 cents. On the other hand, silver's 200 DMA today is at 1278, and ought to stop near there.

Today's drop in gold -- helped by a 103 point Dow rise -- drove the Dow In Gold Dollars (DiG$) up to through the G$415-417 (20.08 oz - 20.17 oz) to close at G$422.31 (20.43 oz). I would say this is where the DiG$ ought to turn around. Otherwise it will head higher in a major correction targeting G$475.00 (22.98 oz), the half-way mark of the long dive from the all time high at G$925.42 (44.77 oz).

The Dow rose 103.69 points today to close at 13,487.53, another -- ho-hum -- new all time high. It's spooky, because I lived thru the same thing with gold & silver in 1980. All the juices greed can muster are running in the bulls, convincing them that it will go up forever. All the news is bullish, & no contrary event can bring it down. When it breaks & sinks like a Holstein cow out of a clear sky, they will stand speechless & unbelieving as the cow hurtles toward them on the ground. I could look each of them in the eyes, shake them, slap them, shout at them what's going to happen, & still they wouldn't believe. Swap stocks for silver & gold.

Sweetly symbolic of the whole stock scene -- and the modern world -- on Monday Daimler-Benz announced that it was selling Chrysler, which it bought in the 1990s for $39 billion and which last year lost $1.5 billion, for $7 billion to the Cerberus Group. Cerberus? Cerberus? That rang a note of memory. Cerberus was the three-headed hound that guarded the gates of Hades in Greek mythology, allowing the dead to enterbut blocking forever their exit. Clever, huh? Cerberus now swallows the dead Chrysler.

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, May 15, 2007

This is the Sort of Price Action That Transfers Metals From Weak to Strong Hands

Good. SILVER & GOLD rose today. Silver is staying above 1310 and gold above 667, but until they move either sharply higher or sharply lower, there's not must else to do but wait. A lot of people are piling in, buying silver & gold. This is the sort of price action that transfers metals from weak to strong hands. Personally, I'm a buyer here, but I'm aware of the downside risk, too.

The US DOLLAR INDEX fell below 82 today & all the bears piled on. However, too quickly, I suspect. A reaction back from the 82.35 resistance toward the point where the buck bottomed earlier is usual. Unless it breaks 81.40, it will be a successful test, and the dollar will resume its upside course.

For the second day now the Dow has risen slightly while the S&P has fallen slightly. That's just the sort of straw in the wind that might mean a tornado is on the way.

What makes me think stocks are not about to run off and leave gold in the dust? the Dow in
Gold Dollars. The DiG$ keeps fiddling, trapped below G$415 - G$417 resistance. Considering the run stocks are having, and the slams gold has taken, that's a strong performance for gold against stocks.

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, May 14, 2007

The Next Big Move Will Be Up, Unless Silver Closes Below 1250 and Gold Below 630

SILVER & GOLD PRICES eased off today, but didn't really tell us anything. I believe this correction is nearly complete, and next big move will be up, unless silver closes below 1250 and gold below 630.

STOCKS rose again today. What are they forecasting? Better economy? Maybe not. In Weimar Germany under the 1920 - 1923 hyperinflation the stock market rose 28 quadrillion times, yet still failed to keep up with the inflation. Maybe the Dow is forecasting not good times but hyperinflation. Y'all be smart -- keep your eye on the pea, not the shells. Stocks will clean your pockes. Swap stocks for silver & gold.

US Dollar Index went sidewise today, but stayed above 82, the important mark. Higher prices 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.



Friday, May 11, 2007

Silver and Gold Prices Stand on a Razor's Edge. If They Don't Hold Here & Turn Around, They Will Drop in a Grand Correction.

Gold Price Close Last Week : 687.20
Gold Price Close This Week: 670.60
Change: -16.60 or -2.4%

Silver Price Close Last Week : 1341.5
Silver Price Close This Week: 1321
Change: -20.50 cents or -1.5%

Silver & gold ended last week's confusion by dropping this week.

SILVER & GOLD PRICES stand on a razor's edge. If they don't hold here & turn around, they will drop in a grand correction down to 550 and 1100 or lower. On the other hand, my vote is that both will turn around dramatically. They have spent nearly a year working through a correction from last year's high. I believe they have broken out of that formation, and begun their rally. Right now you are seeing the first correction of that rally.

How will we know I am dead wrong? Next week silver will close below 1250 and gold below 635. How will we know I am right? Both metals will roar back next week, quickly passing the marks they have spent so many weeks labouring over, then pass 692 & 1405 and kept right on marching.

If I am right about metals turning around, then yesterday saw the high in the GOLD/SILVER RATIO and it should move down next week.
There it is. Y'all now know as much as I know, which fundamentally is, "Get right and sit tight: the trend is your friend."

The US DOLLAR INDEX ground steadily higher thru the week, then jumped over 82 yesterday (82.28). Today, after hitting 82.36, it closed at 82.107. No big surprise that, and not weakness either -- it's natural that traders with big gains for the week would close out positions on Friday. Big breaking point in the Dollar Index is 82.35. Once it passes that resistance it will boogie (as in, rise much higher).

Expect the dollar rally to last for several months, but expect not that it will sap morale in silver or gold. They can rise right along with the buck for months on end, although in the long term they move opposite each other. But as that great economic mind John Keynes said, discounting all thought of the morrow, "In the long term we're all dead." Sounds like the spirit of modernism, don't he?

STOCKS took a lick yesterday, but climbed back today to 13,326, not as high as this week's high at 13,365 (basis Dow). Stocks are long overdue for a break and correction. What you are watching now is the greatest bull trap in the history of stocks. Later this year, having drawn in all the unwary & optimistic, the bear will dine on them at his leisure. Before it is too late, swap stocks for silver & gold.

Having said that, might want to put the brakes on looking at the DOW IN GOLD DOLLARS (measuring stocks against gold). The DiG$ has rallied thru the down trend line (about 405) to the resistance area G$415 (20.07 oz) to G$417 (20.17 oz). This advance would suffice as a revisit to the 200 day moving average, and a little above. Overhead there's more resistance at G$425 (20.46 oz) and the very peak of the last upward correction, G$436 (21.09 oz.)

What's at stake here? If the DiG$ doesn't turn down soon, then it could enter a very long correction (where stocks would outperform gold) that could carry as high as G$475 (the 1/2 point of the long fall from the G$922.45 high [44.62 oz]) or even G$500 (24.19 oz). Since the DiG$ has been in a long term downtrend ("bear market") since August 1999, the greatest likelihood rests with resuming the downtrend. In other words, gold has been outperforming stocks for a long, long time & most likely will continue to do so.

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, May 10, 2007

Gold Came to Rest at 665.10, Dead on the Uptrend Line From the 2006 Low

After a low today of 664, gold came to rest at 665.10, dead on the uptrend line from the 2006 low. Remember all the fun we had on the way up, working through 667? Well, here we are again. With the 200 day moving average at 634.09 and the 300 DMA at 626.89, gold shouldn't fall much further.

Silver -- whoo! -- hit a low of 1243 [sic] but off that 1250 support bounced back to close barely over 1300.(Whenever anybody uses the expression "bounced back", it's a sad day.) DMA stands at 1274, so that's a possible target, although somebody with big bucks and determination keeps buying at 1300.

The GOLD/SILVER RATIO may be headed for 52.50 and its upper trend line. It has already climbed over the bodies of its 50 DMA (49.88) and 200 DMA (49.87) but the 200 is crossing headed down while the 50 is headed up.

Now I will astonish & amaze you by saying that I think metals will not go much lower than they did today. On the chart both have broken out of triangles and headed up, and I have to interpret this move as the correction of that breakout and touchback to support/resistance. Whether I am right or not, the market will tell us tomorrow. Anyway, I am long and getting longer, so I would suggest that y'all, too buy silver and gold.

Probably the catalyst, but not necessarily the cause, for today's drops in silver, gold, & stocks was the US Dollar -- the Dollar index rose 28 basis points to 82.28. That's enough to make it look to the veriest fool like a dollar rally. (Odd, isn't it, that the weakness of a nation's currency would be viewed as its strength, and vice versa. That's what the stock market has been telling us, that it expects to do better with a weak dollar.)

STOCKS took a whack. Dow fell 1.1%, the S&P fell harder, about 1.4%. When a market overextends as much as stocks have, there's not much point talking about where they might go. Let's leave it at this: a break is overdue.

The DOW IN GOLD DOLLARS today spiked up to G$411.61 (19.91 oz) & peeked through the downtrend line. Above lies old resistance at G$415-417. If the DiG$ does not turn around here, it threatens a rally that could carry to G$500 (24.19 oz).

Yet another proof the Stock market is overvalued was a headline on MSN Money (which, I hasten to add, I visit only for the quotations & not the commentary).

Headline read: "Dow 21,000 in 2012," on same page with "Retailers Post Weakest April On Record." Argument for Dow 21,000 was that it's "only" a gain of 60% or 10% a year. Yeah, and if frogs had wings . . . Anyway, it made me think. At 10% gain yearly, that puts silver at 2094 cents and gold at $1,073 by 2012. And you'll more likely see that than Dow 21,000, unless of course the losers running the Federal Reserve & US Government occasion a hyperinflation, in which case you might see Dow 21,000,000, but it won't buy a book of matches.

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, May 09, 2007

Silver and Gold Prices Fell Today, Still Holding on to Lows at 1315 and 675

SILVER & GOLD PRICES fell today, still holding on to lows at 1315 and 675. This is a nail biter, but you have to stick with a bull market. My friend the Supertech-nician BL called me today and said to watch the high of a few days ago (692 of 20 April & 1403.3 of 23 April), because both will either fail here, or turn and break through that resistance for a spectacular rally.

Big story today is the US Dollar Index, which barely crept over 82, & closed just below that mark. It is also significant for market morale. Tomorrow the dollar might cross it, but soon, no doubt. A close above 82.35 will send the shorts scurrying for cover.

STOCKS told us nothing new today, with slightly higher closes. This rally has been a massive bull trap, & those who fell into it will regret it. Swap stocks for silver & gold. (I'm completely unrepentant.)

The DOW IN GOLD DOLLARS scooted up to G$406.17 (19.65 oz), right at the downtrend line. If it doesn't turn back here, it signals a time of stocks outperforming 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, May 08, 2007

A Rally is Building, but Gold Must Close Above 692 & Silver Over 1406

SILVER and GOLD closed down slightly, but higher than the previous lows, so the trend is still in force. Silver remains above the 50 day moving average. Metals remain in good shape. I still think a rally is building, but gold must close above 692 & silver over 1406.

Stocks dropped a bit today, but they have more upside to come. We are still watching, waiting for the market to speak.

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, May 07, 2007

Silver and Gold will be Moving Up For Another 4 or More Weeks, Unless Metals Tank in the Next Day Or So

SILVER and GOLD are finally moving together, just not very fast. Silver today worked past its 50 day moving average (1348) & that troublesome 1345 resistance. Now it's ready to bound to 1380 & 1400. Gold gained a piddlin' 80 cents today, but held on near the top of its range. I like this. Silver was worrying me, hanging back. Unless metals tank in the next day or so, it looks like silver and gold will be moving up another 4 or more weeks, maybe even longer.

The GOLD/SILVER RATIO today at 50.86 stands above its 200 DMA (49.972). That means one of two things. A bigger move might be beginning to a higher ratio (silver losing against gold), targeting the top of the trading channel at 52.50. More likely, the ratio is marking the furthest reach of a long series of corrections and sideways movement from silver & gold, and is preparing to drop like your car keys out of your shirt pocket when you lean over the side of a bass boat.

The US DOLLAR INDEX fell less than 5 basis points today, and is holding ground. No proof of a bottom yet, but strengthening. Could still move lower, but still looks like a longer term rally is coming up soon.

Stocks. I have nothing to say, and defer today to Al Thomas, an old stock market hand & former floor trader who really understands markets. You can order his book, If It Doesn't Go Up, Don't Buy It, from www.mutualfundmagic.com & subscribe there to his newsletter. I quote the following from his weekly column for 7 May 2007:

"On August 1, 1927 the DOW ended a string of 19 new high closes of 21 sessions. On July 5, 1929, the same run of 19 new highs of 21 trading days occurred. The latter was only two months before the Great Crash of 1929 started. The first run was the bait thrown out to lure the suckers out of their nests, & the second extracted what money was left in their wallets. Margins then were only 10% so it can be seen why the little guy managed to lose everything. Mr. Investor (I usually call him Joe sixpack, but they didn't have six packs then) could buy 100 shares of $10 stock worth $1,000 for $100 deposited at his brokerage company. A 10% move either doubled his money or broke him.This is the same leverage you will find in commodity futures today.

"Because of the euphoria of the up, up, up 1928-1929 market, speculators were mortgaging their homes to gamble in the stock market. Today margins are 50% and folks seem to be smart enough not to play the market.As the market churns higher & higher it will draw more investor/speculators in. The other speculation -- real estate -- has turned sour & is not as attractive as it once was. They may choose a fund manager who does not understand bear markets (most don't) & they will lose a substantial portion of their funds. During the 2000 - 2003 debacle many lost 40 - 60% or more. All the investing lights are green at the moment, but do not ignore the yellow flag. It is not known when the market will turn down, but it will. The bear is only hibernating. Unless you have your exit strategy in place now, your money will be eaten when the bear again emerges from his cave."

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, May 04, 2007

Gold and Silver Precariously Positioned, & Next Week Will Make Or Break Them

Gold Price Close Last Week : 678.70
Gold Price Close This Week: 687.20
Change: 8.50 or 1.3%

Silver Price Close Last Week : 1344.3
Silver Price Close This Week: 1341.5
Change: -2.80 cents or -0.2%

Confusion still reigns in SILVER and GOLD, despite the V for victory spikes in their markets this week. Look above: silver closed down while gold closed up.

Both metals are precariously positioned, & next week will make or break them. The GOLD PRICE jumped over its 17 day moving average (DMA, US$683.14) today, the first sign of an uptrend. In the pro column also was gold defending 670 again this week. However, since the more times anything hits support or resistance, the more likely a breakthrough, that might portend trouble. On the other hand, gold is positioned to knock on 700 resistance again next week. Another failure at 692/695 would guarantee lower prices, perhaps as low as last year's lows at 550. More pros: this week it bounced off its 50 DMA and the trading channel's lower trendline.

SILVER, too, again successfully defended 1320, but I have to ask why it can't close above 1345. The silver price is either about to fall or rally -- spectacularly. It needs to close over 14 early next week. The uptrend on the weekly chart remains intact with no breakdown, so that says silver is going up.

Looking at the Dow, it's hard to imagine the Dow becoming any more overbought than it now is. Volume dropped sharply on this week's latest rise, even though the Dow closed at a new high again today. Buy stocks at your own peril, or burn $100 bills in your hand. End result will be the same: you'll get burnt. Swap stocks for silver & gold.

The DOW IN GOLD DOLLARS this week touched its downtrend's upper channel line, the downtrend line from the G$435.90 (21.09 oz) high on 4 October 2006. A Berakout over that trendline would mean the DiG$ is embarking on a strong correction to the last 7-1/2 years of downtrend. Remember that G$475 (22.98 oz) is the halfway mark of that decline, and the halfway point in bear markets acts like a fulcrum of direction. As long as it stay below that mark, the direction is firmly down. If it stays above that mark, it has a chance to turn around.

Hitting that downtrend line this week may mean the limit of the correction of the 4 Oct 2006 - 27 Feb 2007 (G$369.25) move. If so, it will turn down next week, which I expect (stocks will drop, gold will rise).

The US DOLLAR INDEX is probably forming a bottom, but until it clears 82.35 there's no reason to get worked up. Expect a fairly large rally in the next six months.

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.