Thursday, April 01, 2010

The Gold Price Rolled Up Off its Right Shoulder Low and Today Hammered its Way Through Resistance to Close at $1,125.10

Gold Price Close Today : 1,125.10
Gold Price Close 26th March : 1,104.30
Change: 20.80 or 1.9%

Silver Price Close Today : 17.876
Silver Price 26th March : 16.892
Change 98.40 cents or 5.8%

Platinum Price Close Today: 1,667.20
Platinum Price 26th March : 1,597.40
Change: 69.80 or 4.4%

Palladium Price Close Today: 488.85
Palladium Price 26th March : 455.35
Change: 33.50 or 7.4%

Gold Silver Ratio Today: 62.94
Gold Silver Ratio 26th March : 65.37
Change: -2.44 or -3.7%

Dow Industrial: 10,927.07
Dow Industrial 26th March : 10,850.89
Change: 76.18 or 0.7%

US Dollar Index: 80.888
US Dollar Index 26th March : 81.623
Change: -0.74 or -0.9%

What a week! Stocks smothered, dollar swooned, metals danced.

Gold's upside-down head and shoulders paid off this week. The GOLD PRICE rolled up off its right shoulder low and today hammered its way through yesterday's $1,113.30 close through $1,118 and $1,125 resistance to close at $1,125.10, up $11.80. H&S neckline is at $1,135, big resistance at $1,134, so once the gold price pierces that veil it will begin a long push up. Of course, it must confirm the uptrend along the way, but will have a target of $1,250. Any close below $1,118 gainsays that outlook. Otherwise, buy.

The SILVER PRICE gapped up on US opening, crushing $17.65 resistance on its leap for $18.00. Gaps show either great strength (in an uptrending market) or great weakness (in a downtrending market). As I've been warning, the silver price didn't have much resistance between $17.50 and $18.00. Comex closed today at a face saving $17.876, up 36.4c. Above us lies virtually no resistance between $18.00 and $18.90. Nearing $18.90 hordes of sellers will pour out of the woodwork like roaches in a New York City tenement. Why? In December silver failed at $19.45, not reaching a new high as gold did. Speculators will be betting silver will fail again.

But all that lieth in the future. For now the silver price is above all its moving averages, having bested its 20 day MA at $17.15 three days ago, first proof of an upmove. Also the RSI and MACD have plenty of room for more climbing. Silver's weekly chart is also smiling on us just as broadly. This past week silver rose 98c, up 5.8%.

Next week had better be an upweek for the silver . Oh, it might rest the first couple of days, but must not close lower than $17.50. A rise would fit the seasonal pattern that often peaks in April or May after a March low. Average seasonal silver gain from 31 December to May peak is 13.5%, which in 2010 produces a target of $19.09. Now that's just talking, because seasonal patterns are averages, and as useful and accurate as all averages. (Take a 9 foot man and a three foot man and average their heights and you get six feet.) Me, I'm buying silver.

With an 80.751 close today the US DOLLAR INDEX may not seem to have sunk much since yesterdays 80.888, down only 24.8 basis point, yet the chart telleth another tale. The dollar tried to climb over the fence, but was caught and thrown back by guards at 81.20. then it fell below 80.80, yesterday's low. Big drop is looming next. Target for this move remains 79.50, then the dollar ought to renew its uptrend. That is, unless it breaks 79 first, which would be equal to a tourist sticking his head in a guillotine and unthinkingly pulling the release rope.

Dollar is hanging onto its 20 day moving average at 80.72. Crossing that will be the first step of a larger tumble. Or is that "tumbrel"?

Stocks didn't lay an Easter egg today after all. After a lot of sawing up and down between 10,820 and 10,950 the Dow stopped at 10,927.07, up 70.44 (S&P500 closed 1,178.1, up 8.67). Presidential year cycle is calling for stocks to begin a stiff decline this month. RSI & MACD look ridiculously overbought, and have for a long time. There's an upward wedge begging to decline. Stay away.

In Washington President Barack Obama resigned today. The Democratic Party elected as his replacement the world-famous actor and renowned statesman, Daffy Duck. When reached at his home in Orlando, Mr. Duck says that he is looking forward to -- QUAWCK! -- leading the country out of its economic woes. A noted anti-gun activist, Mr. Duck said he would move rapidly to outlaw duck hunting and roast duck. At the same time he cited the burgeoning problem of illegal chickens in this country, and suggested he would introduce legislation mandating the switch from duck to chicken in menus across the country. Most of all Mr. Duck promised to repair the White House image by avoiding even the appearance of pandering to special interests.

Hey -- today is April first, isn't it?

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. Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.