Friday, May 23, 2008

The Big Move is Coming in the Silver Price

Gold Price Close Today : 925.60
Gold Price Close Last Friday: 899
Change: 26.60 or 3%

Silver Price Close Today : 18.241
Silver Price Close Last Friday: 16.904
Change: $1.33 or 7.9%

US Dollar Index Today: 73.047
US Dollar Index Close Last Friday: 72.15
Change: 0.226 or 0.3%

Ahhh, here's a little fact that will make your meditative juices flow. In August 1979 the silver price began its parabolic rise from $9.20 on the road to $50. Along the way it made a single correction, dropping to a low of $16.165. Then recovering it hit resistance at $18.20, backed off slightly, and took off for the moon. Odd, the 1 May 2008 low was $16.115, and today the silver price broke through $18.20.

Just ponder that. The Big Move is coming in the silver price. I hope y'all have bought a truckload. Stop worrying about corrections and load up. The gold price might have done better today, and closed higher than Wednesday, but I'll take what I can get. As long as gold remains above $904 it will remain in an uptrend, but it needs to close above the last (double high) at $950 to remove all doubt of a rally. The silver price shouldn't close below $18 again, and probably next week will better the last high at $18.50 close.

This move will be very big, and won't peak until around end-October. If so, we'll execute our Gold/Silver Ratio swap then. I am now very confident that we saw the lows in silver and gold prices on 1 May 2008. Buy now, before the Big Move in silver and gold prices gains too much steam.

It always amazes me how long people will keep on denying the undeniable. They're sick, they don’t want to admit it, they avoid doctors, then bang! They become intimately acquainted with a funeral director.

So it is with stocks & the dollar. As I have pointed out until y'all want to groan, even adjusted for inflation the Dow at 14,000 (let alone 12,479) only equals its January 2000 high. This week stocks lost 507 points, yet the hord of sirens who make their living hawking stocks keep pondering and wondering & pontificating. Look -- dead is dead, let's face it, and once a bull market has peaked, it needs 15 - 20 years to recover. Look for stocks to perk up, then, around 2010 at the earliest, but more likely 2015, if then. Last warning: swap stocks for silver & gold.

The Dow in Silver Ounces made its low on 14 March at 580.85 oz. of silver to buy the Dow. It corrected upwar4d, and today stands at 684.15, about where it broke down into free fall on its way to 590. Eventually the Dow will sell for 32 (thirty-two) ounces of silver or less.

The brief rally in the Dow in Gold Dollars has ended, too. After a rally that carried only to G$315 (15.241 oz) the DiG$ is falling again, closing today at G$278.71 (13.483 oz) a few more gold dollars down and it will be banging on the old low at G$247.14 (11.955 oz). Before it's over, the Dow will sell for a mere two [sic] ounces of gold.

The US DOLLAR INDEX closed on the futures market at 82.05, but in the aftermarket traded as low as 71.94. A close below 71.89 will turn the dollar down for a long fall. Otherwise, this week's trading may have made a double bottom slightly higher than the last low, setting the stage for a rally to 75. Get out of all investments that promise to pay dollars in the future: bank deposits, annuities, insurance, certificates of deposit, pensions.

Stocks may make one more thrust upward, but 'tis only the last gasp of a dying market. If the Dow closes under 12,200 it crashes. S&P500 is about to close below crucial support at 1375. Lower prices coming, now or a couple of months from now.

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 $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.