Tuesday, August 17, 2010

The Gold Price is Clearly Pushing Its Way Through $1,230 Resistance

Gold Price Close Today : 1226.40
Change : 1.90 or 0.2%

Silver Price Close Today : 18.586
Change : 0.168 cents or 0.9%

Platinum Price Close Today : 1546.00
Change : 22.00 or 1.4%

Palladium Price Close Today : 499.00
Change : 19.00 or 4.0%

Gold Silver Ratio Today : 65.99
Change : -0.499 or -0.8%

Dow Industrial : 10,406.85
Change : 103.84 or 1.0%

US Dollar Index : 82.23
Change : -0.22 or -0.3%

GOLD and SILVER PRICES spake today with forked tongues. The GOLD PRICE stalled and gained only $1.90, closing Comex at $1,226.40. The SILVER PRICE, on the other hand, bumped slap up against the $18.60 ceiling and wound up on Comex at $18.586, up a healthy 16.8c.

They sang out of tune in the sense that silver gained more than gold. However, they sang in tune in that both have now climbed right smack up to strong resistance. Observe closely that gold's closes yesterday and today led to a higher high than the last high, plus took the gold price above its 50 DMA ($1,210.62). The gold price is clearly pushing its way through $1,230 resistance. (Today's high came at $1,228.25.) All this is constructive, but needs to break out through $1,230.

The SILVER PRICE yesterday also climbed over its 50 DMA (1823c) and extended its rally today. High was 1859.1c. Now only two outcomes are possible, and that does not include moving sideways: either silver will back off before it makes another rush at 1860c, or it will break through 1860c tomorrow. Once silver does o'erleap that wall, it will shoot for 1900c and higher.

After six down days in a row and a 500 point fall, STOCKS rallied today, not much to anybody's surprise, I hope. The Dow gained 103.84 to 10,405.85 and the S&P500 added 13.16 to 1,092.54. This rally carries the Dow up to its 200 day moving average (10,445.27), a common target for bear market rallies. Observe that this rally came after the Dow had pierced its 50 DMA at 10,285, also predictable. This rally might carry as high as as 10,500, maybe 10,600, before it dwindles and succumbs yet again to gravity. Stay out of Stocks.

THE US DOLLAR INDEX remains in a correction from its gigantic 165 basis point jump off the bottom. Low today was 82.012, which ought to mark the bottom of it. Awww, it might kiss off the 20 DMA at 81.82, but can't drop lower than that safely.

For nine years on Labour Day my family hosted a big party we called the Most Bodacious Hoedown, here on the farm, complete with War Between the States band and period dances. Idea was to give people a chance to look over farm life and enjoy a great time with their families. Then in 2008 Susan had heart surgery on Labour Day weekend and my children didn't think it would be such a tasteful idea to party when their mother was passing through surgery. Then in 2009 they were just too lazy to do it, because it's so much work, but this year they want to hold a Hoedown on a much reduced basis. So, I promised them that I would e-mail all y'all the announcement, which begins below: MOST BODACIOUS HOEDOWN 4 September 2010, 1:00 p.m. till 10:00 p.m. Watercress Farm (Top of the World Farm) 842 Waterloo Road, Westpoint, Tennessee 38486 (between Lawrenceburg and Waynesboro, Tennessee) Direct inquiries to Justin Sanders, (888) 218-9226 ADMISSION: $4 per person, children 4 and under free. If you are carrying a stringed instrument or harmonica or spoons and can prove to the satisfaction of the man at the gate that you really can play it, however well, you will gain free admission. Yes, there will be groups of musicians in impromptu jams. FOOD: Barbecue meal (our own pastured pork) with all trimmings served at 6:30 for $9.00/plate, drink, and dessert. DANCE: Old timey Dance at 8:00 p.m. with caller. Don't worry if you
can't dance, we'll show you how. GAMES and ACTIVITIES for the whole family:
Dunking booth. Yes, you can dunk The Moneychanger, Franklin Sanders.
Rock Toss
Egg Toss (not mixed with Rock Toss)
Pony Rides
Tug-O-War Across the Creek
Toilet Paper Mommies
Mini-Bike for adults FREE FOR ALL:
Trading Card
Corn Bag Toss
Horse Shoes
Scavenger Hunt [END}

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.