Wednesday, June 16, 2010

Gold and Silver Must Confirm this Breakout With Closes Above Earlier Resistance, Namely, $1,250 and 18.50

Gold Price Close Today : 1233.20
Change: 9.90 or 0.8%

Silver Price Close Today : 18.569
Change 16.7 cents or 0.9%

Platinum Price Close Today: 1560.80
Change: 26.50 or 1.7%

Palladium Price Close Today: 459.30
Change: 12.85 or 2.9%

Gold Silver Ratio Today: 66.41
Change: -0.065 or -0.1%

Dow Industrial: 10,404.77
Change: 213.88 or 2.1%

US Dollar Index: 86.04
Change: -0.47 or -0.5%

As if to laugh in my face after yesterday's comments, the Dow rallied today 213.88 to 10,404.77. S&P500 rose 25.6 to 1,115.23. Well, it mattereth not. You can't miss if you ain't shooting and I am not aiming at the Dow. If don't care if the Dow glows cherry red and throws off white hot sparks, I know every rally is a bear market trap for bulls, luring them into the den to devour their money and crack their bones. Leave me out!

The US DOLLAR INDEX fainted today as expected. It fell 46.8 basis points to 86.043, portentously close to 86 and a big plunge. Support lurks somewhere in the depths between 85.40 and 85. Look out below!

GOLD & SILVER made the first steps of an upside breakout today. Confirmation awaits closes above $1,250 and 1850c.

Gold began the day stretching its legs at $1,220, then strapped on its climbing shoes and headed straight up a rock wall. It never stopped till it reached $1,236.60. On Comex it closed at the high end of the range, up 9.90 at $1,233.20. In the after market it is bobbing around $1,235. What signifieth this close? First, it breaches
resistance from $1,228 to $1,230. Second, it clearly breaks the existing downtrend.
Next target? $1,250.

Don't miss the main point of silver's performance today: it closed on Comex above 1850c, up in fact 16.7c at 1856.9, and trading at 1857c in the aftermarket. Silver now has a breakout confirmed by three days trading. What more can you ask?

My friend Bob the Technical Genius called today & opened my eyes to the three year silver chart. The chart implies that silver has finished a 3 year head in shoulders or V-pattern with an implied run of $10 from the breakout point about 1980c. Yes, that means "add 1000c to 1980c -- and what do you get? Assuming gold reaches the targeted $1,375, that gives a ratio target at 45.83:1. Mercy.

But cautious, cautious. First metals must confirm this breakout with closes above earlier resistance, namely, $1,250 & 1850c. This is no time to be sitting idly on the sidelines: you buy the breakouts.

Once again, my satellite Internet is down, so my comments will be short. I only hope they can go out to you this evening.

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

- Franklin Sanders, The Moneychanger

© 2010, 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.