Wednesday, April 14, 2010

If Silver and Gold Prices Stage a Strong Rally Into May, Then We May See the Opportunity to Swap Silver for Gold at 47.5

Gold Price Close Today : 1159.00
Change: 6.20 or 0.5%

Silver Price Close Today : 18.404
Change 16.6 cents or 0.9%

Platinum Price Close Today: 1727.50
Change: 14.70 or 0.9%

Palladium Price Close Today: 548.00
Change: 22.50 or 4.3%

Gold Silver Ratio Today: 62.98
Change: -0.233 or -0.4%

Dow Industrial: 11,123.11
Change: 103.69 or 0.9%

US Dollar Index: 80.21
Change: -0.30 or -0.4%

Making up losses today by rising $6.20 to $1,159, the GOLD PRICE still left me a bit undecided. I have been expecting a short correction, but is it over yet? Tomorrow might drop again toward $1,145 - $1,140, or just as easily rise to $1,170. First seems a hair more like to my shallow mind. If the gold price does drop, buy silver and gold like mad.

Now the SILVER PRICE either made its correction low yesterday at $17.92 or will push down once more tomorrow to, say, $18.20. $18.40 has become the barrier for the silver price to overcome. Above that point, silver takes off.

If SILVER and GOLD PRICES stage a strong rally into May, then we may see the opportunity to swap silver for gold at 47.5. Better get ready. When it happens, it happens fast. You can still enter open orders with us.

STOCKS reached my longstanding 11,100 high target today by closing at 11,123.11, up 103.69. This advance, like the larger advance from March 2009, takes the form of a stretched-out narrow rising wedge, a figure that usually collapses to the downside. I still think that the encompassing pattern from January is a broadening top. A new high today doesn't gainsay that but agrees with it. S&P 500 closed 1,210.64, up 13.35.

Today's Dow intraday high at 11,125.22 almost touched the 200 day moving average at 11,133.87. That typically happens in bear (primary downtrend) markets. Bear markets trade most of the time below their 200 DMA, occasionally staging a bear market rally that reaches for and at times even touches the 200 DMA before collapsing.

Did I make my point? Stay out of stocks. As I write, y'all are watching it top.

Now if I were charged with manipulating the stock market, what would I have done today? Bought heavily on the open to drive it above 11,000 and pull in all those vultures watching from the power lines along the road. What did happen? Market opened gap up at 11,020.70 and the rest is [official] history. Whether the move was caused by man made or natural forces, the top is still as near. Stay out, stay out.

The US DOLLAR INDEX obliged stocks today by sinking 29.6 basis points to 80.211. Between Monday and today it has bounced off 80+, made a low trajectory curve, and fallen back to 80+ again today. Three strikes and you're out. Next time the dollar hits 80, 'twill fall through.

Dollar index remains in a correction within an intermediate term uptrend unless it closes below 78. Lower close today below both 20 and 50 DMAs loudly insists the correction will reach for the 200 DMA, now at 78.14.

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.