Friday, May 14, 2010

Silver and Gold Prices are Breaking Out Into the Wild, Furry, and Unpredictable Phase

Gold Price Close Today : 1,227.40
Gold Price Close 7th May : 1,210.00
Change: 17.40 or 1.4%

Silver Price Close Today : 19.202
Silver Price Close 7th May : 18.429
Change 77.30 cents or 4.2%

Platinum Price Close Today: 1,714.40
Platinum Price Close 7th May: 1,661.90
Change: 52.50 or 3.2%

Palladium Price Close Today: 524.80
Palladium Price Close 7th May: 512.70
Change: 12.10 or 2.4%

Gold Silver Ratio Today: 63.92
Gold Silver Ratio 7th May: 65.66
Change: -1.74 or -2.6%

Dow Industrial: 10,620.16
Dow Industrial 7th May: 10,380.43
Change: 239.73 or 2.3%

US Dollar Index: 86.269
US Dollar Index 7th May: 84.542
Change: 1.73 or 2.0%

GOLD and SILVER PRICES gave you an opportunity to buy a on-sale prices today while they chastened my optimism from yesterday. The GOLD PRICE climbed as high at 1,294.15 today, a hair higher than Wednesday's top. However, that looks like a B-wave in a correction, topping a little higher than the end of a fifth wave. If that is correct, then today's
seen-only-by-eyewitnesses-on-Comex-floor low at $1,217.72 marked the correction low. Allegedly that occurred at 11:00, then gold levitated to 1238 and levelled off, spending most of the rest of the day between 1230 and 1235. Comex close was $1,228.80, down $13.90. This damages the technical picture not one little iota. As long as gold remains above $1,210 the rally is red-cheeked and healthy.

SILVER gave up 16.4 cents to close at 19.476 on Comex. Yet ponder the week: silver gained 4.2% to gold's 1.4% and the gold/silver ratio fell 2.6%. Silver's must hold level is 1880c.

Now is come the time that silver must prove itself, breaking through 19.80 and then clearing the Spring 2008 high at 20.68. One could hardly have asked for better trading than this week, an it appears the short correction has ended and the rally will resume on Monday. Of course, enthusiastic optimism is easy here, so it's worth reminding ourselves that these moves have been very fast, and therefore spongy. Fast moves can be paid back on the downside as fast as they gained upside, so at these heights we have to temper our joy. Silver and gold both remain in a 15-20 year bull market that began in 2001 and are only now breaking out into the wild, furry, and unpredictable phase. Grab yourself a handhold, 'cause you're going to need it!

The US DOLLAR INDEX finished the day near the 86.29 high, resting at 86.269, up a long-legged 106.2 basis points. Is there no bottom to the world's thirst for dollars? The RSI is an outrage, the MACD phenomenally overbought, yet it climbeth still. I have to guess that at 86.87 (the April 2009 intraday high, a rebound high coming off the previous 89.62 peak) that the dollar will falter & stop to catch its breath. However, when irrational factors -- financial panic in Europe over sovereign
defaults & the Euro's future -- drive markets, markets become, well, irrational. So you are watching either the top of this long move from 74.23 in November 2009, or, you've seen two legs in this rally with a correction about to bite before the last leg
carries the dollar to 89.50-ish.

STOCKS dropped early & stayed there all day. The Dow lost 1.51% or 162.79 points, closing at 10,620.16. (S&P stopped at 1,135.68, down 21.76 or 1.88%.) Lows today around 10,540 now become the trigger for more leapfrogging downward. Once the Dow crosses that line, not much support lies between there and the psychologically weighty 10,000 line.

The stock market crash is not limited to the USA. Dr. Robert McHugh noted today that China's SSEC index has fallen 25% since August 2009 highs & 20% since January. European, Canadian, and Australian stock markets are all falling. See, expensive but well worth the price.

The Dow's weekly chart shows a bear market that plunged in 2008/2009, rallied to its 200 week moving average in a typical bear market rally, and has now resumed its downward plunge. If you still have stocks, better shuck them in a hurry.

The DOW IN GOLD DOLLARS has collapsed, sinking past the Dec 2009 low and working on March 2009 lows now.

From its present G$178.86 (8.653 oz) the DiGS will head for G$140 (6.773 oz).

What is it about the internet and email that makes people petulant, rude, and insolent? Is it the anonymity? I don't get many, but from time to time an email arrives so rude and insulting that if the person were present I would slap his jaws, old as I am. I reckon they know I can't reach through the computer screen & slap their jaws, but to a man they are still too cowardly to use their entire name and address. I certainly don't mind people disagreeing with me, indeed, I welcome it because it makes me re-examine my own position. I don't even object to people ribbing me and making fun of my bad calls on the market. That goes with the turf. My children beat you to it.

However, just because I do someone the service of sending a free daily commentary that contains the fruit of my 30 years in gold and silver, shrivelled and wrinkled though that fruit may be, I have given no one the privilege of insulting me or speaking rudely. Since the presence of such persons is virtual and therefore renders it impossible to slap their jaws in person, henceforth I will do the email equivalent,
namely, hit the delete button at the first hint of rudeness. I won't tolerate bad manners. I loathe to mention this because 99.99% of y'all are kind, helpful, and generous, but I won't tolerate bad manners, not even in 1/100 of one percent.