Tuesday, November 23, 2010

The Gold Price Cleared the $1,365 Barrier, Next Stop $1,424

Gold Price Close Today : 1377.60
Change : 19.80 or 1.5%

Silver Price Close Today : 27.461
Change : - cents or 0.0%

Gold Silver Ratio Today : 50.17
Change : 0.721 or 1.5%

Silver Gold Ratio Today : 0.01993
Change : -0.000291 or -1.4%

Platinum Price Close Today : 1652.90
Change : -8.10 or -0.5%

Palladium Price Close Today : 684.95
Change : -8.05 or -1.2%

S&P 500 : 1,180.73
Change : -17.11 or -1.4%

Dow In GOLD$ : $165.61
Change : $ (4.56) or -2.7%

Dow in GOLD oz : 8.011
Change : -0.221 or -2.7%

Dow in SILVER oz : 401.89
Change : -5.18 or -1.3%

Dow Industrial : 11,036.37
Change : -142.21 or -1.3%

US Dollar Index : 79.63
Change : 0.945 or 1.2%

My daughter Liberty rolled into the office today and asked with disbelief, "What's this? The GOLD PRICE up and the SILVER PRICE down? What's that supposed to be?"

Once upon a time (but no more) analysts and gurus used to make much of gold's "flight to safety" function: anytime war or unrest political or economic threatened, the fearful would flee to gold. They don't talk so much about it now, but surely that happens, or if it doesn't happen, traders make it happen because they take up positions to exploit it. Thus today the excitement in Korea -- not to mention questions about missiles fired off the coast of California and a US and a Canadian fighter jet being shot down over Alaska -- sent more folks into gold, running up the price by $19.80 to a Comex close at $1,377.60. Whether that was already brewing in the market or caused by cannon fire, mattereth not since gold cleared the $1,365 barrier and moved one giant step closer to $1,385 resistance and a clear lane to the last intraday high at $1,424.

Day by day it requireth more and more wit to imagine new reasons why the GOLD PRICE will not keep on rising. I, for one, have stepped out of it steamrolling path and bought all my boat could carry. Today would have been a splendid chance to buy silver as well.

The SILVER PRICE appears to have completed its latest correction and to be readying itself to climb again.

Today it crashed from 2770c at 4:00 a.m. EST to 2704c before New York every opened, about 7:30. Well, that was the last of that. Silver cut loose like your hubcap flying off at a steep curve on the highway, flying, leaping, and jumping clean back to 2770c. Whoa! Change of mind, and by 11:15 it had sunk back to 2715c. Not satisfied with those tergiversations. silver reversed again and shot once more to 2770, yea, 2775c, the relaxed the rest of the day between 2740c and 2750c.

After all that sound and fury, Sturm und Drang, silver finished the day unchanged at 2746.1c.

If I were one of those folks who has never heard about the Primary Trend and investing with it, this single day in silver would have shot my nerves for a couple of weeks.

But I DO know about the Primary Trend, and I don't give much of a hoot about one day's trading.

About the only worry I have left comes from staring at the silver and gold charts and wondering whether that A-B-C correction really finished at $1,330 or not. When gold clears $1,386 that worry will wither, and when gold o'ertops $1,424.40 it vanishes clean away.

Today's events in the currency markets raise the question, "Which came first, the chicken or the egg?" As I said lately, we talk about events "causing" this or that move in markets, but did that really cause it? Or was it merely a catalyst or coincident event in a market break that was already brewing?

Case in point, today's dollar index. It rose a colossal 94.5 basis points, 1.22%, to 79.627. What caused that meaty gain? The shell-lobbing in Korea, or was it already there in the market, ready to break forth?

The US DOLLAR INDEX blew clean thru the last 4/10 of the 78s and the first 6/10s of the 79s. In a single bound it o'erleapt 78.60 resistance and the last intraday high at 79.46.

All because the North and South Koreans mutual admiration broke out today in artillery fire? Well, certainly that sent some folks running into dollars -- and into gold, too, as we'll see below. But was it the cause? Beats me, I'm just a natural born durned fool.

Bolstering somebody's theory, the euro looked earthward today, gapping down and speeding like a falling dart towards it 200 DMA at 1.3154. It's trading 1.3380 right now, down 2c or 1.45%. Looks like it ain't gonna stop at its 50 DMA (137.17). Wait! What's that? Yep, the Euro's 20 DMA is turning down and about to cross under its 50 DMA, not the crossover of champions.

Long and the short of this disquisition is, dollar's going higher.

Allow me to shove stocks aside before we entertain more alluring topics. My summary of this market is, "I wouldn't own stocks with your money." Downtrend has been firmly established, with this recent half-hearted rally beaten back at the Dow's 20 DMA (11,209). Today the Dow closed at 11,036.37, down 142.21 -- yes, another weighty drop -- plumb on its 50 DMA (11,032.13).

Yet there remaineth -- I must always remind myself with stocks lest my arrogance and distaste get the best of me -- that stocks turn slowly, so might yet show off with one last lunge for the top (11,450), like a cabaret singer long past her prime embarrassing herself with too much powder, off-target lipstick, and a cracking voice. Just go silent into that good night, and leave bad enough alone.

S&P500 looketh neither better nor different. Closed today at 1,180.73, down 17.11 and resting on its 50 DMA (1173.30). O, mercy, mercy, how many tears, how many heartbreaks, how many broken dreams and portfolios lay yet ahead in the stock market? Lots, Bubba, lots.

Dow in Gold Dollars today closed at G$165.61 (8.011 oz) at the very bottom of support. Dow in silver ounces is a mere 10 oz. above its lows. Breaks here will look like Niagara Falls.

LOOK AT THIS: On this day in 1954 [sic] the Dow Jones Industrial Average finally surpassed it pre-1929-crash high when it closed at 382.74, twenty-five long years after Black Tuesday. My, think on it. Twenty-five years is a right long spell to hold on to stocks waiting for 'em to "come back." That, friends, is the footprint of a primary trend. Let's see, 2007 + 25 is . . . .

On this day in 1765 the people of Frederick County, Maryland refused to pay England's Stamp Tax. Hip, hip, HOOO-ray!

Right here is where I am so utterly bumfuzzled by folks today. They even let government agents perform lewd maneuvers on their own and their wive's private persons, rather than say, "NO!" Is everybody so cowed and timid that they won't even stand up for what even a fool can see is right and wrong?

My wife and I have stopped flying on airplanes. They can keep their rotten planes and fly 'em empty, because I know good and well that the first time one of those Hessians male or female puts his hands on my wife, old, feeble, and soft as I look, they're going to have to kill me, or I'm going to hit 'em in the head with a lead pipe, if I have to tear out the handrail.

Have Americans completely forgotten the power of saying "NO"? Mercy, you don't even have to fight 'em, you can just refuse to co-operate. No way 15,000, or even 15,000,000 government agents can force 285,000,000 Americans to do what they don't want to do -- unless those 285 million go along willingly.

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.