Tuesday, December 22, 2009

When a Market Hits Your Targets, Reason & Courage Allow Only One Course: Close Your Eyes and Buy

Gold Price Close Today : 1095.40
Change: -15.40 or -1.4%

Silver Price Close Today : 17.020
Change: -28.50 cents or -1.6%

Platinum Price Close Today: 1414.00
Change: -24.00 or -1.7%

Palladium Price Close Today: 362.00
Change: 2.50 or 0.7%

Gold Silver Ratio Today: 64.36
Change: 0.170 or 0.3%

Dow Industrial: 10,197.47
Change: -93.79 or -0.9%

US Dollar Index: 78.01
Change: 0.35 or 0.5%

I apologize for missing y'all yesterday evening, but it was St. Thomas' Day & I ran out of day before I got to write a commentary. Today I have to take my wife up to Nashville Christmas shopping, so I may miss y'all this evening as well. But this is written at 8:15 a.m., and yesterday's events give us a pretty good handle on markets since my targets have been reached.

US DOLLAR INDEX rose 35 basis points to 78.01. The dollar is trying to break through a double top Friday and Monday at 78. Overnight it tried to trade higher, but now is below 78 and wallowing in the waves. That would follow the typical dollar pattern, a burst to strength then failure to follow through. Soon should come 79.5 and the 200 DMA (79.49). Don't be scared: it's only the bogeyman.

STOCKS remain range-bound. Yesterday Dow closed up 85.25 at 10,414.14 and S&P 500 up 11.58 at 1,114.05. Range-bound is range-bound, & there's nothing to say about it until it breaks out of that range. Seems the Nice Government Men are in there buying, trying to drive it higher. Lots of luck. Bias is down, but even as I say that remember that stocks could make another push up that might take the Dow as high as 11,000 amid cries that a new day has dawned. It hasn't, some NGM just turned on a flashlight, & the batteries WILL run down.

SILVER & GOLD have touched my targets in overnight trading. Gold made a low at $1,085.75, which smites my targets, namely, a 38.2% correction of the Nov. 08 - Dec. 08 rise, & 25% of April 09- Dec 09.

Earlier this morning gold was pitty-patting with the $1,085 level, but the London fix was $1,094 and gold now sits at $1,092. Options here are (1) a further drop to $1,070, or (2) this is the bottom limit of the drop, an early Christmas present for you.

SILVER traded down to 16.80 overnight, fulfilling my targeted 25% correction of the 7/09 - 12/09 rise and 38.2% of the 11/08-12/09 rise. Silver stands at the moment of truth. Either she holds 16.80 or falls to 16.50-16.00.

O Fear! O Greed! What strait places you bring us to! When a market hits your targets, reason & courage allow only one course: close your eyes and buy. Swallow fear, swat greed, and buy.

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

- Franklin Sanders, The Moneychanger

© 2009, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

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.