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Friday, January 29, 2010

Silver and Gold Prices May Have Exhausted Their Downside Inertia

Gold Price Close Today :1,083.00
Gold Price Close 22-Jan : 1,089.20
Change: -6.20 or -0.6%

Silver Price Close Today : 16.183
Silver Price Close 22-Jan : 16.918
Change: -73.50 cents or -4.3%

Platinum Price Close Today: 1,501.30
Platinum Price Close 22-Jan : 1,547.50
Change: -46.20 or -3.0%

Palladium Price Close Today: 418.25
Palladium Price Close 22-Jan : 430.90
Change: 6.80 or -2.9%

Gold Silver Ratio Today: 66.92
Gold Silver Ratio 22-Jan : 64.38
Change: 2.54 or 3.9%

Dow Industrial: 10,067.33
Dow Industrial 22-Jan : 10,172.98
Change: -105.65 or -1.0%

US Dollar Index: 79.482
US Dollar Index 22-Jan : 78.252
Change: 1.23 or 1.6%

The SILVER PRICE took a heavy wound this seek, the GOLD PRICE seems to be bottoming, stocks have broken down through important resistance, and the US Dollar Index finally pierced 78.8 resistance. Expect more dollar upside (to 81.50), more stock downside (to Dow 9450), and perhaps the end of metals' decline.

The GOLD PRICE has formed a double bottom with its 22 December low. Yes, it has closed a couple of bucks lower than 22 December, but not significantly. Yesterday and today closed at 60 cents difference, close enough to qualify as a double close. Those often mark a change of trend. On the daily chart the MACD and RSI look pretty well worn out on the downside, that is, ready to turn up for a change. But on the weekly chart they're enough to give you gray hair, because they could drop much further, which means price could drop much further. Today on Comex gold closed down 60c at $1,083.00.

SILVER'S momentum indicators paint much the same figure. Today the SILVER PRICE closed on Comex at $16.183, down 1.9c. Made double bottom with yesterday's low. Range was flat from $16.00 to $16.30, not much action.

Silver and gold prices may have exhausted their downside inertia. Now, whether that works for a bounce only or a genuine upside rally remains to be seen. That A-B-C correction I have been looking for since the December 2 peak has now been traced out. Question is, how low is low enough for that C-down-leg? Gold has made an A-B-C with the bottom of the A leg and bottom of the C leg equal. In silver's case, the C-leg is lower than A. Technically, that's enough, but can't say yet whether they will stop there. A handy indication they have stopped would be gold closing above $1,100 and silver above $16.80 - $17.00. In the other direction, if they break today's closes, the correction will last longer and prices will sink further.

Takes guts to buy here, but if you believe silver and gold are in a primary uptrend, which can't be gainsaid, then this point offers an opportunity to buy on a low. And that always wrenches your courage.

US DOLLAR INDEX, having at long last pierced 78.80 resistance, jumped another 50+ basis points today to close at 79.482. If that's a flag formation decorating the chart, then the upside target is 81.50. This tilts the playing field uphill for silver and gold prices, but 'twill eventually tilt back, in a month or two.

Regarding how directly other markets respond to the dollar ponder these numbers for performance from the first day of 2010:
US Dollar index, up 1.957 points or 2.5%
Dow, down 516.63 or 4.9%
Gold, down $53.40 or 4.7%
Silver, down $235.50 or 12.7%

As usual, silver is much more volatile than all else, but note that stocks and gold have fallen nearly twice as much as the Dollar Index has risen. Clearly, half of that price change has been influenced by other factors, mostly change in psychology and expectations. In other words, investments like other markets are the prisoners of fad and fashion. Be patient, it will turn our way.

Stocks have more to fear than silver or gold. Tradition holds that when stocks close January lower than they open, the ensuing year trends down. Today stocks barely held above the psychologically pivotal 10,000 mark today. Dow has already broken higher support levels, dooming itself to visiting 9,450 at minimum. I strongly suspect the Dow will drop below 6450 before 2010 ends. Look for the Nice Government Men to goose stocks on Monday, their usual practice.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, January 28, 2010

It's Hard to See How Silver and Gold Prices Won't Move Lower

Gold Price Close Today :1083.60
Change: -0.90 or -0.1%

Silver Price Close Today : 16.202
Change: -22.8 cents or -1.4%

Platinum Price Close Today: 1506.50
Change: 3.50 or 0.2%

Palladium Price Close Today: 420.80
Change: 6.80 or 1.6%

Gold Silver Ratio Today: 66.88
Change: 0.873 or 1.3%

Dow Industrial: 10,120.46
Change: -115.70 or -1.1%

US Dollar Index: 76.69
Change: 0.26 or 0.3%

I don't know what the Great Leader said last night but stocks and metals didn't like it very much.

Either SILVER and GOLD PRICES are about to stage a strong comeback from here, or fall much further. The GOLD PRICE fell only $0.90 to $1,083.60, edging to a new low for the move. The SILVER PRICE, on the other hand, broke 22.8c to $16.202, more than 3% lower than the last low.

It's hard to see how silver and gold prices won't move lower. Silver's target now becomes $16.00 - $15.72, the 200 DMA or nearby. The gold price keeps looking at $1,065, even $1,025 or $1,000.

What are the tripwires along the way? Closes above the 20 day moving averages might help, but OUCH! The gold price just closed beneath its 20 dma (1,089.41) today. Wrong direction. With silver's 20 dma at $17.75, silver already stands below it. But silver's MACD is nearing bottom, although not yet turned up. Gold's momentum indicators are also nearing oversold. From here, we can only wait for the market to speak. Hold tight.

The US DOLLAR INDEX crossed 78.80 at last and ran for 79.066. Now it has backed off slightly to up 24.3 basis points at 78.91. It has formed a flag on the chart. Flags always fly at half staff, so that measures a target at 81.50. Clearly, that's going to last more than a month.

The Dow has also formed a flag, which points to a target at 9,450 soon. Today the Dow closed at 10,120.46, down 115.70. S&P500 closed 1,084.53, down 12.97. Much more downside to come.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, January 27, 2010

I Wish I Could Tell You That Silver and Gold Prices Spoke Unmistakably and Unequivocally Today But They Didn't

Gold Price Close Today : 1084.50 Change: 13.80 or -1.3%

Silver Price Close Today : 16.428
Change: -41.8 cents or -2.5%

Platinum Price Close Today: 1503.00
Change: -32.50 or -2.1%

Palladium Price Close Today: 414.00
Change: -16.05 or -3.7%

Gold Silver Ratio Today: 66.02
Change: 0.819 or 1.3%

Dow Industrial: 10,236.16
Change: 41.87 or 0.4%

US Dollar Index: 76.69
Change: 0.26 or 0.3%

Markets are holding their collective breath waiting to hear what the Great Leader has to say tonight. Whatever 'tis, 'twill most likely pick thy pockets. And whatever he says, he will keep on doing pretty much the same thing. As the French say, "The more things change, the more they stay the same." Or words to that effect-- in French, of course.

Market expects Obamaramalama to speak good medicine to the US Dollar Index, but although it rose 26 basis points today, yet it could not clear 76.80 resistance. Trading at 76.69 right now. The exegetical rule of technical analysis is that a trend in force remains in force until broken. Dollar's trend right now is up, and hath not yet been broken.

STOCKS said little today. A 41.87 point rise in the Dow to 10,236.16 doesn't exactly pull it back from the Mouth of Destruction to the Vale of Safety. Market's holding its breath. S&P rose 5.33 to 1,097.50. Stocks may now rally briefly, but have begun establishing a down trend.

I wish I could tell you that SILVER and GOLD PRICES spoke unmistakably and unequivocally today, but they didn't. Silver broke to a lower low, down 41.8c to close at $16.428 on Comex, Gold dropped $13.80 to $1,084.50. Previous low close was $1,086.00 on 22 December. While today's close was $1.50 lower, that might mean nothing. Silver closed at a marginal new low, $16.428 . December 22 low was $16.77, so that's not 3% lower.

But all that may be just my picking nits. After the Great Leader drops his inspired Cluster Bombs Of Wisdom and Do-gooding, we will see how the markets react. Isn't this a strange world, where all the productive people in the country are holding up what they are doing, waiting to hear from a man who never met a payroll? What a great country!

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, January 26, 2010

Silver and Gold Prices Stand at the Moment of Crisis

Gold Price Close Today : 1098.30
Change: 2.60 or 0.2%

Silver Price Close Today : 16.846
Change: 28.5 cents or -1.7%

Platinum Price Close Today: 1535.50
Change: -14.00 or -0.9%

Palladium Price Close Today: 430.05
Change: -13.20 or -3.0%

Gold Silver Ratio Today: 65.20
Change: 1.236 or 1.9%

Dow Industrial: 10,194.29
Change: -2.25 or -0.0%

US Dollar Index: 78.49
Change: 0.30 or 0.4%

Well, today ended in high confusion: stocks down, dollar up, the GOLD PRICE up, the SILVER PRICE down.

Metals were bewildered. Last time I wrote that bewilderment reflected uncertainty in markets, silver and gold prices both took off skyward next day. Still, they were bewildered, gold rising $2.60 to $1,098.30 on Comex while silver fell 28.5c and
closed at $16.846.

The GOLD PRICE put in a double bottom at $1085.9 with Friday's $1082, but was blocked at $1,102. Clearly, that's the level gold has to clear to resume advancing.

The SILVER PRICE dropped 28.5 cents to $16.846, with a $16.33 low along the way. Day's chart looks like a successful spike bottom. How will we know that is correct? Tomorrow the silver price will close above $17.00 at least, and probably $17.20.

Silver and gold prices stand at the moment of crisis. If they hold on at these lows, people who buy here will look like geniuses. If metals fail here, they will fall further, to $1,065 and $16.00. It's a bull market, so the bias is for all mysteries to be resolved to the upside. I expect higher silver and gold prices tomorrow, as long as those lows hold.

US DOLLAR INDEX rose 30 basis points to 78.49 after hitting a high of 78.64. There is a pair of 78.35 lows on the daily chart, so maybe it will rise again tomorrow, but the dollar has been having an awful lot of trouble hurtling 78.80. Some of that difficulty may arise from it's nearness to the 200 DMA, now at 78.62.

STOCKS confirmed their dead cat bounce yesterday by declining again today. Dow dropped 2.5 to 10,194.29 and S&P500 dropped 4.61 to a close of 1,092.17.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, January 25, 2010

I am Looking for Higher Silver and Gold prices Soon - If I am Wrong, There is Quite a Bit of Air Beneath Recent Lows, So Be Warned

Gold Price Close Today : 1095.20
Change: 6.00 or 0.6%

Silver Price Close Today : 17.131
Change: 21.3 cents or 1.3%

Platinum Price Close Today: 1549.50
Change: 2.00 or 0.1%

Palladium Price Close Today: 443.25
Change: 12.35 or 2.9%

Gold Silver Ratio Today: 63.93
Change: -0.450 or -0.7%

Dow Industrial: 10,196.86
Change: 23.88 or 0.2%

US Dollar Index: 78.18
Change: -0.04 or -0.0%

The GOLD PRICE on a five day chart (ino.com, use symbol XAUUSDO) broke out above the since-last-Wednesday downtrend line on Friday, but only slightly improved today. Well, it rose $6.00 to a Comex close at $1,095.20. All of this trading could show nothing more than a dead cat bounce, so gold must prove itself by conquering the psychological round number barrier at $1,100, then technical resistance at $1,105, then $1,125 and $1,130. In other words, it has to reverse what happened as it fell. (Wondering what a "dead cat bounce" is? Well, try to dribble one sometime and you'll understand.)

The SILVER PRICE has bounced off its $16.80 December low (last Friday) but improved only 21.3 cents over Friday to close on Comex at $17.131. Smiling face of that is a higher low today at $16.95 and that 21.3 cent advance. Next resistance hovers at $17.40 and $17.80.

My overview: If the dollar fails here then silver and gold prices will resume their rally. My present interpretation reads that December high and following correction as a short term setback in an ongoing rally, not an important top. Thus I am looking for higher silver and gold prices soon. If I am wrong, there is quite a bit of air beneath recent lows, so be warned.

The US DOLLAR INDEX has declined since last Thursday's 78.80 high, and today traded right up under the downtrend line but failed to break through. Trading now down 3.5 bps at 78.175. If the dollar breaks below 77.80 again then this rally has ended for a while.

STOCKS sure enough performed a dead coat bounce today. Dow rose a gigantical 23.88 points to close at 10,196.86. S&P500 rose 5.02 (be still, my beating heart!) to 1,096.78. The Dow breaking 10,120 would break loose a waterfall.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, January 22, 2010

Have Silver and Gold Prices Found Their Bottom?

Gold Price Close Today : 1089.2
Gold Price Close 15th January : 1,130.10
Change: -40.90 or -3.6%

Silver Price Close Today : 16.918
Silver Price Close 15th January : 18.411
Change: -$1.4930 or -8.1%

Platinum Price Close Today: 1,547.50
Platinum Price Close 15th January : 1,601.50
Change: -54.00 or -3.4%

Palladium Price Close Today: 430.90
Palladium Price Close 15th January : 453.50
Change: -22.60 or -5.0%

Gold Silver Ratio Today: 64.38
Gold Silver Ratio 15th January : 61.38
Change: 3.00 or 4.9%

Dow Industrial: 10,172.98
Dow Industrial 15th January : 10,609.55
Change: -436.57 or -4.1%

US Dollar Index: 78.252
US Dollar Index 15th January : 77.171
Change: 1.08 or 1.4%

Nothing lost quite as much as the SILVER PRICE this week, although everything but the US Dollar index was trying their best.

The GOLD PRICE put in another dreary Comex close, down $13.50 to $1,089.20, but then climbed briskly in the aftermarket to $1,094. This area might be the one that blocks any further gold fall. Likely also are $1,065, $1,025, and $970. I may be wrong, but I bought today. It if drops more, I'll buy more. Oh, also my "Swallow of Capistrano" customer flew by today. I don't know how he does it, but for 8 years he's been buying near the bottoms. Anyhow, he came out today, for whatever that's worth.

The SILVER PRICE dropped 57.8 cents to close at $16.918 on Comex, but keeping it there was like holding a basketball under water. In the aftermarket it was trading up to $17.06.

Would these levels suffice for an A-B-C correction. Yes, they might, but we will have to see confirmation first. Worse, that stock market is creating a terrible whirlpool swirling and sucking everything down. Expect much more volatility in every market this year, much more, as the depression (yes, Virginia, there is a depression) worsens. Wonder not, neither vex thy mind what the government and fed will do -- they will do the only thing they can do, inflate. Bad for the United States and its economy, good for silver and gold prices.

"Don't try to catch a falling knife!" I repeat that to myself over
and over as I try to calculate where silver and gold prices will find their bottom.

The US DOLLAR INDEX rose from below 77 on Monday to a high of 78.80 yesterday, but had few new friends loyal enough to stay with it over the weekend. Closed today at 78.252, down 7 basis points. Resistance was 78.5 and the 200 DMA (78.69), but the dollar couldn't stand that heat and fell back today. Still, dollar's rally remains unbroken and should continue higher, with everything that means for other markets. Target 82 highest.

Biggest news of the weak was the crack in stocks. Loss from last Friday shows only 436.57 points, but this week's first day closing (Tuesday) was in fact 10,725, so the Dow actually lost 552.45 points in three days. In three days, it wiped out nearly three months' gains. Today it crashed through all support to stop just below 10,200. If the 10,110 support does hold, look for 9900 then 9700. Dow is now below its 20 day moving average ang 50 day moving average (10,452) -- waaaay below. More sharp falls are coming. Get out and stay out.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, January 21, 2010

For Silver and Gold Prices, Today or Tomorrow is the Must Hold Day

Gold Price Close Today : 1102.70
Change: -9.60 or -0.9%

Silver Price Close Today : 17.496
Change: -37.0 cents or -2.1%

Platinum Price Close Today: 1592.50
Change: -32.40 or -2.0%

Palladium Price Close Today: 451.00
Change: -18.00 or -3.8%

Gold Silver Ratio Today: 63.03
Change: 0.768 or 1.2%

Dow Industrial: 10,389.88
Change: -213.27 or -2.0%

US Dollar Index: 78.42
Change: 0.08 or 0.1%

The GOLD PRICE lost $9.60 to close on Comex at $1,102.70, but in the aftermarket has shed another $9.50 to trade at $1,093.20. Today's trading brings the gold price back to its uptrend line stretching back to the Nov. 2008 lows. You have to buy it here, even if you think it may drop further. Below this lies support at old low of $1,085/1,075 then at lateral support of $1,065, then at the apex of gold's last triangle, $970. I reckon that uptrend line will hold, but I wouldn't swing over hell using that for a rope.

Oh, poor silver! Dropped 37 cents today to close on Comex at $17.496, then dropped another 11 c to $17.385 now. The SILVER PRICE has also reached the uptrend line from the Nov. 2008 low. For both silver and gold prices, today or tomorrow is the must hold day, the crisis. Otherwise they will go considerably lower, say, $16.00 for silver, although that last low at $16.80 will have some say, too.

Time to buy will come soon -- maybe today. Watch closely, gird up your loins, be brave.

How exactly do all those folks who believe that the dollar determines the course of metals and stocks explain today? The US Dollar Index rose a gigantic 8 basis point (0.1%) while the Dow fell a huge 213.27 points or 2.01%. Maybe the dollar's rise contributed the 0.01%, but where did the 2% come from? No, stocks peaked on 19 January and unless they best that high at 10,725 they will fall much, much lower, headed for the last low near 6450. It's a big market, so slow to turn, but in two days the Dow has crashed through 10,600 and 10,500 support and approaching 10,250 below which lieth only atmosphere. Today Dow closed down 213.27 at 10,389.88 and the S&P500 at 1,116.48, down 21.56.

US DOLLAR INDEX has reached its 200 day moving average (78.72) and turned back. Apparently didn't like what it saw. High today at 78.814, but closed at 78.418 (that was tricky to type), so it closed about 40 bps off its high. Yet the dollar is still rallying, even if it takes a day or two to digest these gains. 200 DMA could have been the target, but too early to say and not very likely.

Y'all! The entire world is degenerating! I simply cannot comprehend that grown people cannot give directions to the place they work everyday. How do they get there in the morning? And hardly anybody will give you a decided YES or NO, about anything. They all waffle and shuffle and call you back later and check with somebody. And people waiting on you in offices or anywhere act as if either they or you are barely human, and barely escaping a coma.

So let's start a conspiracy of competence & joy! Yes, tomorrow, let's every one of us throw a monkey wrench into the works by doing our jobs competently and intelligently! Wake up out of your coma, dig in and decide that today of all days, you are going to delight in the work before you. More than that, you are going to gaze at that person across the counter and say to yourself, "God has created this unique person and sent him to me to serve today! Even if it were Nancy Pelosi or Glenn Beck, I'm going to find something to like and respect about him."


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, January 15, 2010

If the Gold Price is Tracing Out an A-B-C Correction, then B Peaked This Week and Gold Will Fall Next Week

Gold Price Close Today : 1,130.10
Gold Price Close 8th Jan: 1,138.20
Change: -8.10 or -0.7%

Silver Price Close Today : 18.411
Silver Price Close 8th Jan: 18.458
Change: -4.70 cents or -0.3%

Platinum Price Close Today: 1,601.50
Platinum Price Close 8th Jan: 1,576.50
Change: 25.00 or 1.6%

Palladium Price Close Today: 453.50
Palladium Price Close 8th Jan: 428.65
Change: 24.85 or 5.8%

Gold Silver Ratio Today: 61.38
Gold Silver Ratio Close 8th Jan: 61.66
Change: -0.28 or -0.5%

Dow Industrial: 10,609.55
Dow Close 8th Jan: 10,617.29
Change: -7.74 or -0.1%

US Dollar Index: 77.171
US Dollar Index Close 8th Jan: 77.461
Change: -0.29 or -0.4%

Everything went down this week? Yep, everything but platinum and palladium, but it's hard to trade anything as quirky as those two.

Not surprising anyone, the scrofulous US dollar index burst through 77 and raced ahead today to a high of 77,30. Right now it is trading at 77.171, up 43.9 basis points.

Certes, a rising dollar greases the rungs on any ladder silver and gold prices are climbing, but 'tis not an unbreachable difficulty. Last year silver and gold rocketed ahead from mid-January lows to mid-February highs while the dollar raged and raced upwards. No, it seems metals are steadily decoupling from the dollar as their most powerful price determiner. Not wholly, not yet, but steadily. You'll know that transition is complete when gold is no longer quoted in dollars, but dollars in gold.

The GOLD PRICE traded down today $12.50 to close on Comex at $1,130.10. That lands it back in support at $1125 - 1,130. This week saw a spike bottom to $1,118, so that now becomes the "must hold price." If the gold price falls through that trap door, then 'twill be doomed to revisit $1,100, maybe $1,085.

However, golds uptrend from the $1,075 intraday low on 21 December remains unbroken. A close below $1,125 would wreck that.

The jury is still out on the nature of gold's correction begun on 3 December, and the ultimate low. If gold is tracing out an A-B-C correction, then B peaked this week and gold will fall next week. But will it fall lower than $1,075. Or have we already seen the bottom. Watch the market next week to find out. I only remind y'all, at the risk of being scorned as a permabull, that gold remains in a primary uptrend that has another 5 - 10 years to run. Therefore we have to assume every question will resolve to the upside. They won't always, but that's generally safe. And if you're wrong, then the bull market will bail you out.

Folks often assume silver and gold walk in lock step, but that's not at all true. They work together like waves chasing each other with a little lag or lead, and sometimes even mover opposite each other (Fall 2008).

Since New Years silver has shown itself stronger than gold. Silver must hold 17.00 cents to maintain its lower trend line, and should hold 17.66 to remain above its 20 day moving average, the first warning of a downturn. Really, if silver closes below 18.00, it will be a mess for a while.

On the upside gold must climb above $1,160 and silver above 18.90 even to begin to claim another rally has been loosed.

On the weekly chart silver's uptrend line hits today about 16.70, nested with lateral support, and that argues against any fall to a new low.

I am tempted to read today's stock behavior as the decisive breakdown out of the long bearish upward wedge that both the Dow and the S&P500 have long been forming. that means this week's new Dow high above the wedge's upper boundary was the spike that proves the top. And today stocks dropped noticeably. Dow fell 100.90 to 10,609.55 and the S&P500 fell 12.43 to 1136.03. Whether tomorrow or next month, a big break loometh in stocks.

Monday all the banks and markets are closed so I won't publish a commentary.

Y'all enjoy your weekend!



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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, January 14, 2010

Both Silver and Gold Prices Keep Hopping Over Resistance

Gold Price Close Today : 1142.60
Change: 6.20 or 0.5%

Silver Price Close Today : 18.643
Change: 10.5 cents or 0.6%

Platinum Price Close Today: 1611.50
Change: 82.20 or 5.4%

Palladium Price Close Today: 444.70
Change: 24.15 or 5.7%

Gold Silver Ratio Today: 61.29
Change: -0.013 or -0.0%

Dow Industrial: 10,710.55
Change: 29.78 or 0.3%

US Dollar Index: 76.88
Change: -0.07 or -0.1%

Today makes me wonder if I shouldn't stop my foot-dragging and suspicion of SILVER and GOLD PRICES and admit that both are strong as a garlic milkshake. Why? Because both keep hopping over resistance. Today the GOLD PRICE rose above $1,140 again, up $6.20 to close on Comex at $1,142.60. The SILVER PRICE climbed 10.5 cents and ended on Comex at $18.6430.

The GOLD PRICE has formed an uptrend over the past three days. Now that support at $1,130 has become very important, and gold is aiming at resistance $1,155 - $1,160. Needed are good solid days of advancing, $ 5 - 10 a day, bulling through all resistance. A second failure at $1,160 would be bad news.

The SILVER PRICE pushed up another 10.5 cents today, and needs only another 30 cents to clear its last high. Do y'all remember last year? Silver and gold prices made lows in mid January, and 40 days later were at 1st Half 2009 highs. They can move very fast.

Results for last year now in, 31 Dec 2008 to 31 December 2009: S&P500 up 23.5%, Dow up 18.8%, Gold price up 20.8%, silver price up 35.6%, platinum price up 56.9%, palladium price up 118.4%, and US $ index down 5.2%.

Since gold's bull market began in 2001, the gold price has risen from $278.70 (31 Dec basis) to $1,095.20, up 293%. Silver has climbed from $4.579 to $16.822, up 267.4%. But cheating a bit and counting silver's big gains since 31 Dec 2009, it has risen 308%. Meanwhile, back in Stockville the Dow in Gold Dollars, which measures the performance of stocks by gold, has dropped 76% since stocks bear market began in 2000. At end 2000 you needed 39.657 troy ounces of gold to buy the whole Dow; today you need only 9.521. Res ipsa loquitur.

US DOLLAR INDEX, on the other hand, is now trading 9 basis points down at 76.755. In fact today's chart doesn't look as sick as yesterday's, and the dollar may have carved out a bottom for itself, provided it doesn't close below 76.60. Resistance stands above at 77, so the dollar must jump that hurdle before we can talk about any rally.

The DOW has now reached that place in a bearish rising wedge where it begins to spike out above the upper trend line. This lasteth not long. Dow closed at 10,710.55, up 29.78 and S&P500 closed at 1,148.46, up 2.78. New highs.

Thank you very, very much for your prompt responses to my request for ear ache cures. I thought I might have cured the ear ache last night with treatments on a Bio Frequency machine, but it came back this afternoon. Most of your responses called for garlic oil, olive oil, vinegar, or hydrogen peroxide. About half used garlic, one even advised to put a whole clove in your ear for 20 minutes. Don't laugh, I tried it, and it helped.

On 26 February I'll be speaking in Atlanta at the 10th Amendment summit, and on 6 March in Richmond, and on 20 Feb in Montgomery, Alabama. Tonight, as every 2nd Thursday, I'll be having supper with Catherine Austin Fitts and afterward join her on the Solari Report subscription phone call. Www.solari.com. The rest of the time I'll be sitting here in the office, trying to figure how to escape to the woods.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, January 13, 2010

The Gold Price Ought to Advance Above $1,140 Over the Next Couple of Days and Under no Circumstances Close Lower than $1,125

Gold Price Close Today : 1136.40
Change: 7.50 or 0.7%

Silver Price Close Today : 18.538
Change: 29.5 cents or 1.6%

Platinum Price Close Today: 1574.50
Change: 7.5 or 0.5%

Palladium Price Close Today: 424.25
Change: 2.05 or 0.5%

Gold Silver Ratio Today: 61.30
Change: -0.580 or -0.9%

Dow Industrial: 10,680.77
Change: 53.51 or 0.5%

US Dollar Index: 76.88
Change: -0.07 or -0.1%

Yesterday's closing prices in the table below were incorrect, & should have been 1824.3 cents (down 44 cents) for silver and down $21.80 to $1,128.90 for gold. Sorry.

Today the US DOLLAR INDEX made a new low again, for the third day running, repeating the same v-pattern that ought to mark a reversal but doesn't. It declines into a midday low, then "supporters" appear to raise the price. Sniff? Sniff? Any of y'all smell Nice Government men? Smell kind of like sulfur.

Dollar has not reached the breaking point at 76.80. Fall through that, and the dollar index kisses 76,25, maybe even 75.90. That big dollar rally everyone is expecting may perish before it is well born. Now trading down 7 basis points at 76.884.

At 9:00 a.m. Eastern time, about the time all the NGM come to work, somebody tried to break gold, selling down hard from $1,135 to $1,130 and on down to a low $1,118.35 by 10:30. Yet gold quickly scrambled back over $1,125, then moved sharply higher to close up $7.50 at $1,136.40 on Comex, above the $1,132 support/resistance. I call that "a successful test of $1,125 support, implying prices will not go lower. But so far we have only that one witness. Are there others? Momentum indicators are have ample room to rise further and today gold hit and bounced off its 20 DMA. If these witnesses are true, gold ought to advance above $1,140 over the next couple of days and under no circumstances close lower than $1,125.

Somebody tried to slam silver today, but that didn't work worth a hoot. It did hit 18.164, a little lower than yesterday's low, but then roe 29.5 c above yesterday's Comex close to end there at 18.538. This double bottom establishes 18.15/18.20 as support. Now silver, like gold, must advance to close above its last top at 18.90. Silver is not oversold and has plenty of room to rise.

If I traded stocks that enormous bearish upward wedge on both the Dow & S&P500 chart would have me checking my parachute. 'Tis usually deadly, that bearish wedge. Stocks, I reckon, are moving toward a big break fairly soon.

Whooo! Any of y'all know a cure for ear ache in 63 year olds? Don't keep it a secret if you do.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, January 12, 2010

I still Believe that Silver and Gold Prices have Already Posted Their Lowest Prices for this Correction

Gold Price Close Today : 1138.20
Change: 5.10 or 0.5%

Silver Price Close Today : 18.458
Change: 12.5 cents or 0.7%

Platinum Price Close Today: 1567.00
Change: -24.80 or -1.6%

Palladium Price Close Today: 422.20
Change: -11.35 or -2.6%

Gold Silver Ratio Today: 61.66
Change: -0.142 or -0.2%

Dow Industrial: 10,627.26
Change: -36.73 or -0.3%

US Dollar Index: 77.03
Change: 0.02 or 0.0%


The GOLD PRICE fell through $1,145 support about 12:30 and kept right on falling till it hit $1,125, then flattened out rest of the day. Gold's failure to hold above $1,140 support strongly implies gold must do more downside work. Now we have to wonder whether support from $1,125 to $1,118 will hold. Any close higher than $1,132 says that support will hold, a close below $1,118 says it won't. The market will speak.

The SILVER PRICE drop today was much more orderly than gold's. Right now $18.20 and $18.00 are holding well, but any close below $18.00 puts the silver price in full retreat.

I still believe that silver and gold prices have already posted their lowest prices for this correction, so keep your eyes peeled for your chance to buy.

By the way, both gold and silver remain above their 20 day moving averages, a good sign ($1,113.84 & 1748 cents). US Dollar Index stands below its 20 DMA. The 20 DMA is the fast moving average that serves as the first tripwire of any direction change, up or down. That's why it repays watching.

Weird, weird day: everything dropped, for no apparent reason. A couple of seemingly small stories surfaced. The Chinese central bank is raising bank reserve requirements. Some observe that this move has led market crashes by 2 or 3 months, but why did every market drop?

A story also surfaced under "Good Economic News" that the US trade deficit with China widened in November. The pitiful ignorami employed as commentators and analysts in the media and at National Proletarian Radio interpreted that as good news, on grounds it means American consumers are now buying again. I reckon going deeper into unpayable debt for imports which already represent the destruction of the national manufacturing base is good news for Keynesians, Democrats, and Republicans, and other goofs -- but I repeat myself.

The US DOLLAR INDEX spent much of the day down but has now barely edged over 77 to a gigantic upmove of 2.4 basis points to 77.029. The Dollar Index must hold 76.8 or deepen its fall, Upside it needs to close above 77.60. All this feels like the market is telling us something, but what? Lurketh a disaster somewhere?

STOCKS dropped today, the Dow down 36.73 to 10,627.26 and the S&P500 by 10.76 to 1,136.22. As I observed yesterday, stocks are overdue for a correction.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, January 11, 2010

Silver and Gold Prices Responded to the Dollar's Fall by Strong Up Moves

Gold Price Close Today : 1150.70
Change: 12.50 or 1.1%

Silver Price Close Today : 18.683
Change: 22.5 cents or 1.2%

Platinum Price Close Today: 1591.80
Change: 15.30 or 1.0%

Palladium Price Close Today: 433.55
Change: 4.90 or 1.1%

Gold Silver Ratio Today: 61.59
Change: -0.074 or -0.1%

Dow Industrial: 10,663.99
Change: 45.80 or 0.4%

US Dollar Index: 78.30
Change: 0.29 or 0.4%

SILVER and GOLD PRICES responded to the dollar's fall by strong up moves. On Comex the SILVER PRICE rose 22.5 cents to $18.683 while the GOLD PRICE added $12.50 to $1,150.70. Yes, that sends gold above that $1,140-ish resistance, and within striking distance of $1,200. From $18.68 the silver price could easily reach its last high close at $19.29. But as I have warned before, this may only mark that exuberant B-wave of an A-down/B-up/C-down correction. Here's an example. From the February high to the May 2009 low, silver made an A-B-C correction, but from the June high to the July low, it dropped straight down, hit the bottom, and commenced a rally that never stopped until December. So I just can't say in advance which path this correction will follow. It will clue us by closing 3% above the last highs, or falling back. We wait for the market to speak.

Several readers wrote asking what I meant by "Get out of all assets that promise to pay dollars in the future." After all, don't we use dollars, so won't we be paid dollars in the future? Stocks are valued in dollars, but are not a promise to pay future dollars. Silver and gold are valued in dollars, but are not a promise to pay future dollars. All the following promise to pay you back dollars tomorrow for dollars deposited with them today: bank deposits, certificates of deposit, all federal, state, local, and corporate bonds, loans of all kinds, annuities, whole life insurance policies, and whatever else promises to pay you dollars in the future.

Also, my Friday remarks about the unprofitability of those hugely overpriced 1/10 American Eagles at $249 each did not mean that the gold price would never rise to $2,490, since it most likely will. Rather, I meant that those coins, like almost all other modern "rarities", will not hold that premium against gold as it rises, and so will only be a waste of the premium you pay.

Momentous news of the day was the dollar's unexpected collapse of 36 basis points after a like fall of 45 bps last Friday. I say "collapse" because the Dollar Index fell below its 20 day moving average. Even if the dollar is fated to rally more this year, this could extend the present correction. I remind those who fear the Big Bad Dollar & its rally this year that in 1st quarter 2008 the dollar was rallying sharply while silver & gold did the same. Shake out of your head the notion that the US Dollar's weakness is the only force driving investors into silver and gold. It is a powerful force, but not alone by any means. US $ Index is not around 77.104, down 36 basis points from Friday.

Day after day stocks keep edging to slightly new highs. Dow today closed 10,663.99, up 45.80 & S&P rose 2 to 1,146.98. However, other indices were mixed, so up, some down. Shows confusion. Stocks are vulnerable to a correction here.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, January 08, 2010

I Had Rather Buy on Weakness Next Week Than Buy Here

Gold Price Close Today : 1133.10
Gold Price Close 31st Dec: 1,095.20
Change: 43.00 or 3.9%

Silver Price Close Today : 18.333
Silver Price Close 31st Dec: 16.822
Change: 163.60 cents or 9.7%

Platinum Price Close Today: 1,576.50
Platinum Price Close 31st Dec: 1,468.00
Change: 108.50 or 7.4%

Palladium Price Close Today: 428.65
Palladium Price Close 31st Dec: 410.00
Change: 18.65 or 4.5%

Gold Silver Ratio Today: 61.66
Gold Silver Ratio Close 31st Dec: 65.11
Change: -3.44 or -5.3%

Dow Industrial: 10,617.29
Dow Close 31st Dec: 10,428.05
Change: 189.24 or 1.8%

US Dollar Index: 77.461
US Dollar Index Close 31st Dec: 77.860
Change: -0.40 or -0.5%

Y'all don't misplace this commentary, because it contains the closes for the year 2009. Look in Column B above. In a bare week the silver price has jumped 163.6 cents or 9.7% -- not bad. The gold price meanwhile gained $43.00 for a 3.9% rise. Obviously a few optimists and metals bulls came back from vacation expecting great things, and bought accordingly. Are they out of the woods yet?

The gold price needs to climb above $1,140.00 as a first step. Both silver and gold prices have climbed above their 20 day moving averages, another upward first step. The silver price is running ahead of the gold price and has crossed above 18.08, the level analogous to gold's $1,140. A close above 19.00 implies that silver has no more downside coming, and a close above 20.05 confirms that.

The US Dollar is acting most odd. Yesterday it jumped up 45 basis points, today it dropped the same. I know I am liable to be painted an ignorant hick for saying it, but why does that price action smell of Nice Government Men and their Manipulating Muscle? Technically it makes the dollar look spent, worn out, unable to clear the hurdle at 78. Logically the dollar's rally shouldn't end yet, but what does logic have to do with markets? They move to the logic of forces we cannot see. Anyhow, every other day the dollar leaves its future in doubt. What else can you call it but scrofulous? Get out of all assets that promise to pay dollars in the future, unless you enjoy watching your capital vanish.

STOCKS inched their way to another new high today. The Dow closed at 10,617.29, up 10.43 while the S&P500 rose 3.01 to 1,144.70. Stocks will probably continue to rally through January, reaching maybe 11,000 Dow and 1,200 S&P500, but after that they fall off the cliff. Stay out of stocks.

Whenever I write "Stay out of stocks" readers inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.

Today metals resolved their confusion by both rising. At Comex close gold had risen to $1,138.20, up 5.10, and silver closed at 18.458, up 12.5 cents.

Our care has to be that this is the Up-wave (B) of an A-B-C down-up-down correction, so I had rather buy on weakness next week than buy here. If gold pierces $1,140 it will run for $1,200 at least. Silver is already running for the last high at 19.45.

Weird -- the Gold/Silver Ratio weakened off right on schedule, making a sudden low (62.5) exactly on the 105 day cycle 31 December. Since then, though, it has fallen to 61.66 today, a harbinger of good things to come for gold and silver -- soon.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, January 07, 2010

A Time Will Come to SELL Silver and Gold - Not for a Number of Years Yet

Gold Price Close Today : 1133.10
Change: 2.80 or -0.2%

Silver Price Close Today : 18.333
Change: 17 cents or 0.9%

Platinum Price Close Today: 1556.00
Change:-1.30 or -0.1%

Palladium Price Close Today: 426.00
Change: -2.55 or -0.6%

Gold Silver Ratio Today: 61.81
Change: -0.733 or -1.2%

Dow Industrial: 10,606.86
Change: 33.18 or 0.3%

US Dollar Index: 77.97
Change: 0.48 or 0.6%

Clearly my brain yesterday was under the influence of returning back to work and standing under a tsunami. Yes, yes, I do know that Joan of Arc drove the English and not the French out of France, otherwise the French today would be eating the same mushy "bangers & mash" as the English & playing rugby, neither of which any Frenchman worth his Gauloises would do.

Let's look closer at markets. Yesterday I outlined for y'all the broad range for gold, $1,254 to $1,075. A break above that range confirms the rally has re-ignited, while a close below brings lower prices. Same range for silver lies between 2003 cents and 1672 cents. Now more details.

On 20 December the US DOLLAR INDEX hit its intraday high for this move at 78.45. Then it fainted & corrected to 77.25 & its 20 day moving average. Now, like Freddie Kruger, the dollar waketh again. Today it rose 47.8 basis points to 77.971, the doorstep of 78. Right now the dollar is overbought, but if it penetrates 78 tomorrow it will drive higher, probably to the 200 DMA (79.05) in the next few days. Target for the present rally is just shy of 80, but if severely overdosed by the Nice Government Men with manipulative steroids, dollar might reach 82. The dollar, like all national central bank currencies, is a walking dead man. Get out of all investments that promise to pay you dollars in the future. They are guaranteed losers.

STOCKS have edged to new highs, but not high enough to mean much. Dow might work sideways & higher for another month, might even hit 11,000, and the S&P500 might hit 1200+. However, in real (silver & gold) terms and most likely in nominal (US dollar) terms, stocks remain imprisoned in a primary downtrend (bear market). For another five or more years stocks will post only losses. After reality bites again in 2010 -- more state and local governments hit the budget wall and rotten assets in the banks begin to stink -- optimism will fade and stocks will swoon. Stay away.

A lady called me today after she had been rebuked by her acquaintances and friends because had been buying silver and gold since late last spring. They were horrified. I thought she had a lot of courage, but they were horrified. It's hard to buck everybody's opinion, even when you know you are right -- otherwise the world would be peopled with Athanasiuses and it ain't.

What struck me hardest, tho, is that so many people and especially those in the investment business have not a clue about the primary trend's importance. They just don't understand that you must align your investment with those 15 - 20 year trends or inevitably lose. Thus they heard about the great bull market in stocks 1982 - 2000, & some may even have (wrongly) convinced themselves they were investing geniuses because they climbed aboard that bull market in time. Or maybe it was the real estate bubble they rode. Now they can't believe their cash cow has died and won't rise again for 15 or 20 years, so they alibi for every new disaster and cling to the hope that it will come back. Yes, it will, but too late to do them any good.

If y'all don't learn one other thing from this natcherl-born Tennessee fool, learn this: always invest with the primary trend. In every other direction lies sure disaster, and bulls and bears waiting to gobble up your capital.

Remember, too, that also means that a time will come to SELL silver and gold. Not for a number of years yet, but it will come, and then you MUST sell.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, January 06, 2010

Silver and Gold Prices Have Probably Reached the Maximum Low of an A-B-C Correction

Gold Price Close Today : 1135.90
Change: 17.80 or 1.6%

Silver Price Close Today : 18.163
Change: 38.2 cents or 2.1%

Platinum Price Close Today: 1557.30
Change: 27.00 or 1.8%

Palladium Price Close Today: 428.55
Change: 4.00 or 0.9%

Gold Silver Ratio Today: 62.54
Change: -0.342 or -0.5%

Dow Industrial: 10,573.68
Change: 1.66 or 0.0%

Both SILVER and GOLD PRICES reached their 38.2% correction level (Nov. 2008 - Dec. 2009 run) and 25% correction (April 2009 - Dec 2009 for the GOLD PRICE and July 2009- Dec. 2009 for the SILVER PRICE), at about $1,075 and about $16.80. Now they have bounced up off those lows, with gold closing today at $1,135.90 (up 17.80) on Comex and silver rising 38.2 to $18.163.

Why these crazy numbers, 38.2% & 25%? Because those are frequently-seen corrections. Also, corrections often take an A-B-C zigzag form. The market drops in the first wave down to a bottom at A, rises up to a top at B, and then drops again once more to a final bottom at C. It may be logical, but is not necessarily so, that the top of B is lower than the top that sparked the correction, or that the bottom of C is lower than A. Some B waves can become so frenzied with enthusiasm that they will fool you into believing that a new advance has begun; B waves may even exceed the last peak. And the C wave may or may not fall to a lower low than the A wave's bottom.

What I have observed in this bull market is that the bottom of a correction usually comes within a month of its beginning, and the C wave doesn't go lower than the A wave. So are we looking for a lower low than $1,075 and $16.70? I am not. I believe we have already seen the correction lows. If I am wrong and these lows do not hold, then obviously a greater correction will follow, lasting another six months or more and dragging gold down to $985. What trigger will tell you that I am wrong and that lower prices are coming? A gold Comex close below $1,075. How will you know that no further correction is coming, but rather higher prices? a close higher by 3% than the 3 Dec high close, that is, a close over $1,254.00.

But don't let all this confuse you. Bottom line is that silver and gold are in a bull market, a primary uptrend lasting another 5-10 years, so even if your timing is poor, the uptrend will bail out your mistake. For example, when the gold price first climbed to $340, I was all vexed about whether it would correct to $320 or $290. Today all that worry looks silly, because the primary uptrend has bailed out those $340 and $320 purchases long ago.

I'll summarize: silver and gold prices have probably reached the maximum low of an A-B-C correction. From here they will rise to a B peak, then fall again to finish the correction at C. That low probably won't fall lower than what we have already seen; it might reach $1,100 at most. I would buy silver and gold from here, or wait to see how (what appears to be a B wave) plays out.

The US DOLLAR INDEX is correcting its attempt to break through 78. It is probably still rallying, but so weakly that you have to look close to see it. Closed today down 16.9 bps at 77.45.

STOCKS are wallowing ahead, having edged into new highs for the move, but not by much. Dow today closed 10,573.68 (up 1.66) and S&P 1,137.14, up 0.62. Stay away from stocks, even as the Wall Street sirens' songs wax louder and more insistent.


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.