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Tuesday, November 30, 2010

The Gold Price Broke Out of It's Triangle Hitting $1,389.76 at Today's High

Gold Price Close Today : 1385.00
Change : 19.00 or 1.4%

Silver Price Close Today : 28.185
Change : 1.037 cents or 3.8%

Gold Silver Ratio Today : 49.14
Change : -1.177 or -2.3%

Silver Gold Ratio Today : 0.02035
Change : 0.000476 or 2.4%

Platinum Price Close Today : 1658.40
Change : 12.30 or 0.7%

Palladium Price Close Today : 697.00
Change : 7.00 or 1.0%

S&P 500 : 1,180.55
Change : -7.21 or -0.6%

Dow In GOLD$ : $164.27
Change : $ (2.97) or -1.8%

Dow in GOLD oz : 7.947
Change : -0.144 or -1.8%

Dow in SILVER oz : 390.49
Change : -1.79 or -0.5%

Dow Industrial : 11,006.02
Change : -46.47 or -0.4%

US Dollar Index : 81.33
Change : 0.491 or 0.6%

Today the market answered loudly and unequivocally my worries yesterday. The SILVER PRICE and the GOLD PRICE broke out of those triangles and . . . Well, I'll explain below.

Early this morning the GOLD PRICE had already cleared that $1,366 hurdle that was badgering me yesterday. Looking closer at the 5 day chart, gold had formed an up-pointing wedge, when then resolved upside. This is an odd thing about those upward wedges, and I saw it often in the 1990s in stocks. Wedges are supposed to break out in the opposite direction to the direction they point: upward wedges break down, downward wedges break up. However, in strong bull markets that don't always work. Over and over it will form an upward wedge and break out upwards. Of course, every once in a while, just to clean your clock and restore your humility, wedges break in the orthodox fashion.

Anyhow, gold hit 1389.76 at today's high. This clears the last intraday high ($1,382.30) and pierces the downtrend line from the 9 November intraday high at $1,424.40. As always, gold must now confirm its intention by closing higher still, I suggest above $1,400. Today it had risen $19.00 by the time Comex settled it at $1,385.00. That pretty well put to death my worries.

Whoa! The SILVER PRICE chart today looks even more enthusiastic than gold's. Once it cleared that 2730c resistance, it left a trail of dust clean to 2830c. Comex settled at 2818.5c, higher by a colossal 103.7c.

Listen here -- y'all are getting spoiled by this silver performance. This ain't normal, rising a dollar and more in a day. Yes, but it certainly points out silver's greater volatility, and how when money begins running for cover, it makes a much louder noise in the silver market.

Something's not right in the world. Silver and gold are simply ignoring the US dollar and climbing right along, thank you very much, right in the face of dollar strength against every other currency alternative. Remember that silver and gold are also alternative monies, offering the only hard alternative to every unbacked fiat money in the world. You are watching the de-coupling now, the world-wide revulsion against central-bank-created money out of thin air. Trouble is brewing, world-wide.

GOLD/SILVER RATIO dropped again today, with silver up percentagewise over twice gold's gain. My target for swapping silver into gold remains at 47.5 to one. Folks are getting all antsy about the ratio dropping further, and it certainly might, but once you set a target, assuming the reasons for the target haven't changed, it is a terrible idea to change that target. Then your greed and fear are pushing you, not your brain and reason.

Other folks are writing because they have been reading internet articles and interviews that in end-of-the-world fashion predict that all the silver in the world will disappear, probably by next week, and there certainly won't be any when we get ready to swap back into silver from gold 15 or so weeks after the peak.

Dearly beloved, let me be candid. The earth and its store of wonders was flung into space long ago, and altho one day 'twill disappear in a fiery flame, it probably won't happen next week, and anyway, that's not an event predictable enough to plan for. What I can plan for, I must, but not for the unknowable.

Likewise, I expect silver to rise about three and a half times as much as gold from here, but it ain't all gonna happen next week, or even soon. Nor will all silver disappear from the face of the earth. At some price, we will be able to buy it, until that fiery flame incinerates it all.

I know I'm throwing ice-water on somebody's alarmist Chicken Little parade, but I'm 63 and too old and battle-scarred for that mess. Tighten up your belt and be sober.

Took Susan up to Nashville to see the doctor today because she thought her incision site was swollen. Nurse said her problem is simply that she's skinny, so the device sticks out more than if she were fleshier. Nice relief.

First, look at that US dollar index. Today (I believe) it completed a move up from 79.60 begun last Thursday. That hints tomorrow 'twill move sideways or down. Dollar index cleared through the 80s and gobbled up 49. more basis points (0.63%) to end at 81.326. That solved my riddle about whether the buck would stop at 80 or 81. Right overhead hangs the dollar's 200 day moving average at 81.75, and y'all know that 200 DMA often serves as the upside target for a bear market rally. Lateral resistance lurks as well at 82, and at the last high (83.56 intraday). Dollar has now worked its way clean to oversold on the RSI (72.71), where 70 is oversold, although it shows no sign of stopping yet.

Euro is drowning. Lost 0.97 US cents today, down 0.74% to $1.2992. Yen fared little better, closing 83.645 yen, down 0.425 or 0.51%. The scrofulous dollar is cleaning their equally scrofulous plows.

Mercy, how glad I am I am not the Nice Government Men tasked with keeping the Dow afloat! That's a job for Sisyphus. Today the Dow plunged early to 10,946, then climbed to 1:30, fiddled, fell, and ended the day 46.47 poorer at 11,006.02. S&P500 gave up 7.21 to close at 1,180.55. When the Dow closes below 11,000, trouble will erupt. Watch.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, November 29, 2010

The Gold Price Needs to Close Clean Through $1,366, then $1,380, to End Speculation

Gold Price Close Today : 1366.00
Change : 3.60 or 0.3%

Silver Price Close Today : 27.148
Change : 0.449 cents or 1.7%

Gold Silver Ratio Today : 50.32
Change : -0.711 or -1.4%

Silver Gold Ratio Today : 0.01987
Change : 0.000277 or 1.4%

Platinum Price Close Today : 1646.10
Change : -9.40 or -0.6%

Palladium Price Close Today : 690.00
Change : -3.30 or -0.5%

S&P 500 : 1187,76
Change : -1.64 or #VALUE!

Dow In GOLD$ : $167.26
Change : $ (1.02) or -0.6%

Dow in GOLD oz : 8.091
Change : -0.050 or -0.6%

Dow in SILVER oz : 407.12
Change : -1.52 or -0.4%

Dow Industrial : 11,052.49
Change : -39.51 or -0.4%

US Dollar Index : 80.81
Change : 1.020 or 1.3%

GOLD PRICE falls stall at $1,351 - $1,355, but it's rise stalls at $1,366. Yes, on Comex gold rose $3.60 to $1,366, but this means little. On lame trading days like last Friday, when nobody is home but the starveling black shirts on the exchange floor, they run prices up and down to hit the stops and put some extra change in their pockets. Thus Friday's close says nothing much. More to the point is a potential pennant or even-sided triangle on gold's longer term (14 month) chart.

O, mercy, what meaneth this? Even sided triangles are tight-lipped about the direction they will break out, up or down, but they do scream that a move is coming. A pennant is a special case of even-sided triangle, a continuation pattern that signals another move in the same direction the pennant built from. I can't say which this is, but looks like an even-sided triangle. Still, I cannot get out of my mind the suspicion that I might be wrong (that only happens seldom, as y'all already know) and gold might break down for more correction. The riddle will be answered by a gold close clean through $1,366, then $1,380, ending all speculation, or a close through the trap door at $1,350.

The SILVER PRICE continues to ride its 20 day moving average up. Today on comex silver snatched another 44.9c to end at 2714.8c, respectably above 2700c. Yet here, too, we find that even-sided triangle or pennant. In silver's case, it must close above the low 2700s and clear 2790c to signal an intention to climb. Any stumble below 2645c woulde send silver tumbling toward 2500c.

Truth is, I haven't a clue which way silver and gold will turn. It was strong that on a dollar market 100 basis points higher than last Wednesday, both silver and gold climbed. That's stout. Longer term I'm not concerned about silver and gold, but in the next few days we might get surprises.

My wife Susan had a pacemaker implanted successfully on Friday. She had no more than returned to the room after the procedure than she was already feeling better. She said she felt, "Crisp." I waited two days to ask what in the world that meant, and she said she had been feeling "soggy with fatigue." She chowed down like a shipwreck victim.

Catch is that she has a condition where her heart swings between beating too fast (tachycardia) and too slow (bradycardia). The pacemaker fixes the "too slow", but does nothing for the too fast. If that doesn't settle down, she will need medication. That sounds a little like "Fix one, break one", but I am so thankful that the pacemaker is helping her fatigue that I can live with that.

Susan's still awfully sore, since they sliced into her chest and squeezed in a pacemaker the size of a skoal can. Other than that, she's chipper as a cricket and now I only have to figure out how to keep her from driving, using a chainsaw, or lifting weights for the 30 day recovery period. Don't laugh. If you knew her you'd understand I'll probably need ropes and chloroform to keep her down.

I deeply appreciate your prayers on her behalf. Please don't stop just yet.

The markets had a weird day. The scrofulous euro continued dropping from last week, closing down 0.0114 (-0.86%) at 1.3119. Last five days look like a waterfall on that chart, with what may have been an exhaustion gap yesterday. Euro closed slap through its 200 dma (1.3147).

The US DOLLAR INDEX today rose 102 basis points to 80.81. In other words, the dollar cleared round-number resistance at 80 and pushed another 81 basis points higher, a right strong display. Ahh, but now the dollar index hath reached my first target, and it remains to be seen whether it will keep on rising.

STOCKS plunged early in the day as low as Dow 10,930, stayed there most of the day, then began climbing toward the close and ended at down only 39.51. Stopping at 11,052.49 (1,187.76 on the S&P500) still looked thin as a step-child's bread and butter. Once the Dow slips through that 11,000 mark the rats will not be climbing down the anchor chains, they will be leaping off the boat to swim for shore. Forestall some misery for yourself and stay out of stocks.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, November 24, 2010

The Gold Price Remains in a Bull Market That Will Keep Prices Rising Another 4 to 10 Years

Gold Price Close Today : 1,376.00
Gold Price Close 19-Nov : 1,352.20
Change : 23.80 or 1.8%

Silver Price Close Today : 2752.8
Silver Price Close 19-Nov : 2717.5
Change : 35.30 or 1.3%

Gold Silver Ratio Today : 49.99
Gold Silver Ratio 19-Nov : 49.76
Change : 0.23 or 0.5%

Silver Gold Ratio : 0.02001
Silver Gold Ratio 19-Nov : 0.02010
Change : -0.00009 or -0.5%

Dow in Gold Dollars : $ 168.07
Dow in Gold Dollars 19-Nov : $ 171.27
Change : $ (3.21) or -1.9%

Dow in Gold Ounces : 8.130
Dow in Gold Ounces 19-Nov : 8.285
Change : -0.16 or -1.9%

Dow in Silver Ounces : 406.40
Dow in Silver Ounces 19-Nov : 412.27
Change : -5.88 or -1.4%

Dow Industrial : 11,187.28
Dow Industrial 19-Nov : 11,203.55
Change : -16.27 or -0.1%

S&P 500 : 1,198.36
S&P 500 19-Nov : 1,199.73
Change : -1.37 or -0.1%

US Dollar Index : 79.790
US Dollar Index 19-Nov : 78.480
Change : 1.31 or 1.7%

Platinum Price Close Today : 1,655.50
Platinum Price Close 19-Nov : 1,666.20
Change : -10.70 or -0.6%

Palladium Price Close Today : 693.30
Palladium Price Close 19-Nov : 703.50
Change : -10.20 or -1.4%

On Friday I will be in Nashville with Susan having her pacemaker implanted, so I am sending you the weekly early. (Please remember to pray for Susan, especially that the pacemaker will fix her fatigue.)

The SILVER PRICE the last couple of days took a back seat while gold played catch-up. That's reflected in a slightly higher GOLD/SILVER RATIO. Yet the last five days haven't been a waste of time. Silver has moved sideways the past 3 days, forming a long narrow triangle. That tightlipped triangle tells us nothing of which direction silver will break out, only that it will. Silver must hold 2710c, and to resume rallying must close above 2790c. On Comex it closed at 2752.8, down 4.4c.

The GOLD PRICE was boosted by the Red Korean artillery this week, but today merely moved sideways. Again, this is probably profit takers trimming and selling positions before the long holiday. Gold must hold $1,365 and above needs to break through the ceiling at $1,380. It fell $4.60 today to $1,376.

SILVER and GOLD remain in a bull market that will keep prices rising another 4 to 10 years. Hold position, add to them when you have opportunity or money.

Swappers get ready to trade silver for gold when the GOLD/SILVER RATIO reaches 47.50 to 1. We will swap back to silver in about 15 weeks after that.

Amazing, isn't it, how standing back to look at the week makes everything plain! You can see that both silver and gold steadied and rose, even in the face of an aggressive, yapping dollar. Somebody painted the tape for stocks today or something, so that they appear to have lost little this week, when in fact they are trending down. White metals have lost their luster.

US DOLLAR INDEX today climbed another 16.3 basis points to 79.790, solidifying and digging in above 79. Look for the buck to rally further, maybe to 82 but surely to 80.50. Euro slacked off today, closed 1.3325, and is hurrying earthward to meets its 200 DMA.

Noteworthy here is that a rising dollar hath not crippled silver and gold, croakers and doomsayers notwithstanding. Bear that in mind. Every silver and gold investor must understand this one principle: it is monetary demand that drives silver and gold bull markets, and nothing else. Earth and sky, stars and sea are witnessing a global revulsion against all fiat currencies that will not end until they are all dead (I hope).

STOCKS probably benefitted (as gold and silver lost) by people closing out positions before the long weekend. Stocks rose today about as much as they fell yesterday, but this is like buying watermelons in Mobile for 50 cents and trucking them up to Chicago and selling them for 25 cents. Sooner or later, you're going to need a bigger truck.

Stay away from stocks as if they were a rabid skunk.

Y'all enjoy your weekend, and give thanks for all God's blessings.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



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
The-MoneyChanger.com

© 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.



Monday, November 22, 2010

It Appears That the Gold Price Correction From the 9 November Peak Has Ended and Reversed For Confirmation Gold Needs To Close Over $1,365

Gold Price Close Today : 1357.70
Change : 5.50 or 0.4%

Silver Price Close Today : 27.457
Change : 0.282 cents or 1.0%

Gold Silver Ratio Today : 49.45
Change : -0.311 or -0.6%

Silver Gold Ratio Today : 0.02022
Change : 0.000126 or 0.6%

Platinum Price Close Today : 1661.00
Change : -5.20 or -0.3%

Palladium Price Close Today : 693.00
Change : -10.50 or -1.5%

S&P 500 : 1,197.84
Change : -1.89 or -0.2%

Dow In GOLD$ : $169.80
Change : $ (1.46) or -0.9%

Dow in GOLD oz : 8.214
Change : -0.071 or -0.9%

Dow in SILVER oz : 406.17
Change : -1.92 or -0.5%

Dow Industrial : 11,152.09
Change : -51.46 or -0.5%

US Dollar Index : 78.62
Change : 0.392 or 0.5%

In spite of Friday's equivocal closes (gold down 70 pennies and silver up 34.5c) both the SILVER PRICE and the GOLD PRICE rose today, even in the teeth of a rising dollar. Yet a touch of equivocation remained with gold.

The GOLD PRICE is also following that same pattern. Although gold rose $5.50 at Comex close, a number disappointingly near $1,355 resistance, in the aftermarket gold leapt and polished its sheen, the SILVER PRICE also added 30c after Comex closed and right now costs 2777c.

Gold's late-in-the-day rise took it above its 20 DMA (now $1,365.30). The MAC is turning up and the RSI already has, pointing also skyward.

GOLD/SILVER RATIO rose again today, to 49.45 at the close. In the last few days I had the opportunity to meditate in quiet on the ratio, and everything I came up with still points to 47.50 as the best place to swap silver for gold. Yes, it might drop further, but that sort of meandering indecision is a sure profit killer. It paralyzes you from acting on a decision, and the best investment strategy in the world is worth nothing unless you act on it. I thought about the ratio so long I even worked out the target for the next swap from gold back into silver, which should present itself within 15 weeks or less of the swap from silver into gold.

Never forget the market proverb, "Bulls get rich, bears get rich, but pigs get slaughtered." Take profits with humility and self control, and keep that greed at bay.

It appears that the silver and gold correction that began with the 9 November peak has ended and reversed. For confirmation silver must rise above 2800c and then 2900c not long thereafter, while gold needs to close over 1365, then 1380. Last high close was $1,409.

I got a right tart and tangy email from a reader in New York in answer to my remark Friday that the "dollar is sorry but we only have to bail out California and New York, and not Ireland." In his words, "Although California may need a federal bailout, so far us New Yorkers have been able to pay the price for our state's fiscal insanity without excess federal help." Well, he said a couple of other things, too.

I stand corrected, New York has pretty well held its own and the state and city shouldn't be tarred with the same brush as Wall Street and the NY Banks. And believe it or not, we in Tennessee do understand that the entire state of New York has not yet been asphalted over, and still contains many sane people and exquisite countryside -- but then, NY shares the same mountain range with Tennessee.

The US DOLLAR INDEX made a low today at 77.975, handily defending 89 support with a nice little V-bottom, then ran like a scalded dog for 78.80 resistance. Trading now at 78.622, it rose 39.2 basis points (0.55). Dollar clearly aims to beat 79.30 resistance and climb higher, ambitious, scrofulous rascal that it is.

In a classic instance of "Buy the rumor, sell the news" the Eurocrats announced a bailout for Ireland today and the Euro sold off, down 1.38c (-1%) to 1.3622. For the time being, at least, the Euro is winning the race to the bottom.

Looking at the 6 month silver chart you mark at once that above 2800c silver traded only on one day's spike, and that was a reversal day. That makes 2800c the upper resistance, although, yes, 2900c lies up there above it. Once silver crosses 2800c it will blow past 2900c like it was standing stock still. Silver reached 2789c in European trading about 2:30 a.m. EST, then dropped and dropped and dropped until 9:30 a.m. when it hit 2715c. It rallied to 2755c, fell back to double bottom at 2712c, and off that firm footing launched a leap into the sky nearly hitting 2790c again. Comex closed at 2745.7, up 28.2c.

I am inclined to see this morning's peak as finishing the move up from 2500c last Wednesday. A sideways correction lasting several days would fit well with this week's US Thanksgiving holiday. Then silver might rev its motor up on Monday. That fits a pattern often seen in a rising metals market that bottoms in August, backs off in October or November, corrects slightly, then blasts off into year end.

One more little thing: on Friday Susan's having that pacemaker implanted. Y'all have been very kind to pray for her in the past, and I deeply appreciate your intervention for her now.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, November 19, 2010

As Long As The Gold Price Remains Above $1,330 It Won't Drop Further, But Early Next Week It Needs To Clear $1,366

Gold Price Close Today : 1,352.20
Gold Price Close 12-Nov : 1,365.40
Change : -13.20 or -1.0%

Silver Price Close Today : 2717.5
Silver Price Close 12-Nov : 2593.8
Change : 123.70 or 4.8%

Gold Silver Ratio Today : 49.76
Gold Silver Ratio 12-Nov : 52.64
Change : -2.88 or -5.5%

Silver Gold Ratio : 0.02010
Silver Gold Ratio 12-Nov : 0.01900
Change : 0.00110 or 5.8%

Dow in Gold Dollars : $ 171.27
Dow in Gold Dollars 12-Nov : $ 169.45
Change : $ 1.82 or 1.1%

Dow in Gold Ounces : 8.285
Dow in Gold Ounces 12-Nov : 8.197
Change : 0.09 or 1.1%

Dow in Silver Ounces : 412.27
Dow in Silver Ounces 12-Nov : 431.51
Change : -19.24 or -4.5%

Dow Industrial : 11,203.55
Dow Industrial 12-Nov : 11,192.58
Change : 10.97 or 0.1%

S&P 500 : 1,199.73
S&P 500 12-Nov : 1,199.21
Change : 0.52 or 0.0%

US Dollar Index : 78.480
US Dollar Index 12-Nov : 78.093
Change : 0.39 or 0.5%

Platinum Price Close Today : 1,666.20
Platinum Price Close 12-Nov : 1,680.70
Change : -14.50 or -0.9%

Palladium Price Close Today : 703.50
Palladium Price Close 12-Nov : 675.50
Change : 28.00 or 4.1%

Well, the week bloweth hot and cold out of both sides of its mouth. As day before yesterday, we have mixed closes in the SILVER PRICE and the GOLD PRICE for the week, not to overlook the PLATINUM PRICE and the PALLADIUM PRICE. Stocks are flat for the week, or, in English, remain in a downtrend. Dollar index made good its gains and although yesterday and today it fell, still it ended the week higher.

The metals have the feel of a late stage rally because silver is so much bouncier than gold.

The GOLD PRICE rose $16.10 yesterday but fell 70c today to close on Comex at $1,352.20. The five day chart seems to be a rectangular reversal on Tuesday and Wednesday, but today's trading violated yesterday's $1,346.60 low with a low at $1,341.25. That don't look so hot, especially gold's failure to clear $1,355 resistance. Somebody attacked gold about 7:00 a.m. Eastern time, and stepped up the pressure at the New York open, driving gold down to $1,341.24 by 10:00 a.m. But gold snapped back sharply jumping to $1,353 in a single bound (well, two or three bounds) and then spending the rest of the day meandering from $1,350 to $1,355.

Prime question on every mind is, Has gold bottomed or not? Well, it bounced off its 50 day moving average this week (1,336.22) which certainly qualifies as a likely bottom target. Today it touched its 20 DMA (1364) but all week long has failed to clear that first trigger of an upward reversal.

As long as gold remains above $1,330.00 it won't drop further, but early next week it needs to clear $1,366.00. Unhappily, next week is Thanksgiving week, usually a very light and quiet week in the US.

My guess is that gold has indeed bottomed.

The SILVER PRICE made a cattywampus upside down head and shoulders this week or rectangle reversal, then went hog stomping wild. Thursday it gained 132.3c [sic] then another 34.5c today. Today silver backed off clean to 2638, then turned and ran like a scalded dog for 2738c. That validated silver's victory over the 2650c resistance level. New overhead barrier is 2740c. Comex today closed up 34.5c at 2717.5c.

Silver is stronger than gold, and that shows up in the GOLD/SILVER RATIO which fell this week from 52.64 to 49.76. Our ratio swap at 47.50 can't be far away. For now I am still targeting 47.50.

I can only interpret silver and gold's performance this week as a preface to higher prices next week. Both remain on target for $1,600 and 3400c.

DOLLAR INDEX this week was battered by news out of the peeling European Onion that the Irish had finally agreed to lower themselves and accept boatloads and tankerloads of newly printed Euros to bail out their government and their banks. Those of us who yet retain two or three functioning brain cells scratched our pates, trying to figure out why news that the EU will print a gadzillion new euros made the currency strengthen rather than weaken on the market. Dollar is sorry but we only have to bail out California and New York, not Ireland, and not their banks.

Sanity notwithstanding, that's what happened. US Dollar Index peaked on Tuesday 16 November at 79.45 intraday. One presupposition that some chart analysts use who believe that markets "know" what will happen is that although events seem to "cause" a drop, in truth that event is only a catalyst or coincidence to a drop that was already in the offing. Just so the dollar this week. That 79.45 came at the end of a long climb, and some correction was due anyway. Yet whether the rumor of an Irish bailout or simply the dollar's overextension caused the fall, the correction was completed today with a V-bottom to 78.17 and climb back to 78.48 right now. That's a loss of 13.7 basis points, but on the chart that V-bottom looks like the head of an upside-down head and shoulders, with shoulders at 78.40. If that correctly reads the chart, then next will the dollar will climb again, never dropping below 78.40 and rapidly climbing through 78.80 and 79 for another challenge of 79.40. Long and short is that I am expecting more dollar rally, at least to the last intraday low at 80.08, maybe to the 200 DMA at 81.75 over the next three weeks. Beware, a close below 78.40 sends the dollar sliding toward 75.50.

STOCKS find it difficult to hold my attention. I've seen this painful wallowing before. Stocks remain in a downtrend but on Thursday amidst the general jubilation over Ireland's fix, they shot up. That might be a reversal, but the Dow must shoot through 11,200 to prove it. Today the Dow gained another 22.32 points to close at 11,203.55. The S&P500 still couldn't press through 1,200 but closed up 3.04 at 1,199.73. Y'all save yourselves some grief and stay away from stocks.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



The Gold Price Reacted Strongly Rising From $1,346.60 to $1,358 New Resistance Is Now $1,360

Gold Price Close Today : 1352.90
Change : (16.10) or 1.2%

Silver Price Close Today : 26.830
Change : (1.323) cents or 5.2%

Gold Silver Ratio Today : 50.42
Change : -1.984 or -3.8%

Silver Gold Ratio Today : 0.01983
Change : 0.000751 or 3.9%

Platinum Price Close Today : 1666.90
Change : 27.20 or 1.7%

Palladium Price Close Today : 696.40
Change : 36.65 or 5.6%

S&P 500 : 1,196.69
Change : 18.10 or 1.5%

Dow In GOLD$ : $170.85
Change : $ 0.64 or 0.4%

Dow in GOLD oz : 8.265
Change : 0.031 or 0.4%

Dow in SILVER oz : 416.74
Change : 6.26 or 1.5%

Dow Industrial : 11,181.23
Change : 173.35 or 1.6%

US Dollar Index : 78.61
Change : -0.479 or -0.6%

The GOLD PRICE reacted strongly rising from a 10:30 low at 1346.60 to a $1,358 high. After 11:30 it backed off, oscillating between $1,350 and $1,355. Comex closed up $16.10 at $1,352.90.

New resistance is now $1,355, call it $1,360. GOLD must kick down that fence and run for $1,375. That's by no means a sure thing. Tuesday through today paints a chart that made a rounding bottom at $1,330, but that can only be proven by gold rising again tomorrow. Gold might touch back to $1,345 or even $1,335 for a final "kiss good-bye", but would have to close higher at day's end.

By the way, have y'all noticed that these mixed-close days with silver & gold usually resolve in higher prices? Not always, but most of the time.

No sooner had I said that SILVER must clear 2600c to confirm that it had bounced off its 20 DMA & reversed than it did. Overnight it beat that mark.

Rounding bottoms appear on a chart as a bowl. You notice that the bowl has an upper rim. Whenever the market breaks above that rim, it confirms that the rounding bottom genuinely was one.

The SILVER PRICE did all that today. It eased off from 2660c before the market opened to 2603 at the low, but bounced off that support and leapt to 2703c just before noon. On Comex it closed at 1:30 Eastern time up 132.3c at 2683c. I still want more confirmation: silver must close above 2700c tomorrow.

These markets are terrifying, & tough to play. I just have to follow the rules and buy today, although that leaves me as nervous as a banker in church. Gold weighs on my mind most. It has not yet closed above its 20 DMA. Why not?

Bull markets always climb a wall of worry.

I really regretted making that comment yesterday about Demo-----s, not because they don't deserve it, but because it might have left the monstrous misapprehension that I approve of Repub----s. I don't. Some of us remember that they are the party that came down here 149 years ago burning, robbing, killing, and raping, and so don't expect much from them today. Ahh, but nowadays everybody is respectable so they rob you with a fountain pen, a bank, and a legislature rather than a six gun, then brag on what a splendid favour they've done you. Tell you the truth, I have no stomach for either pencil-necked, lily-handed bunch of them. I could spend the rest of the evening writing up all the things wrong with them, but there's no point in that. It would only take me away from doing things that are right & can really build a future for all of us. So I am dropping that nasty topic, confessing that I picked up the wrong end of that stick. Sorry.

Well might I lament the bewilderment of yesterday's market with its self-gainsaying closes! Today that bore even more baffling fruit.

General Motors, who ain't got nothing right in the last 30 years or so, comes out of government bail-out bankruptcy today with an Initial Public Offering (well, "initial" since the government took them over) & the stock rose 5.7%? Certes, the world contains even more morons than I suspected, many more among stock investors! What wondrous transmogrification hath changed GM into a company that can make a profit? Nothing I can see, 'cept that GM is the "flavour of the day" at the Wall St. Ice Cream Shoppe.

Then there's Ireland, which at last reluctantly seems to be willing to accept 8 gazillion Euros to bail out the government so that the government can bail out the Irish banks, or something akin to that. Canny Irish politicians say, "No, no, we won't take the money!" Tragic sigh. "Well, if you insist!

Set aside the theatrics & think. The Eurocrats announce they & the IMF (stands for International Monetary Fund) will bail out Ireland & its banks, which they can only compass by printing several Coliseums full of new Euros, depreciating the currency. How reacteth the market? The Euro, soon to be gutted per this announcement, rises & the dollar falls? Yes, rises along with gold, stocks, & silver

Nuts. This is even crazier than buying General Motors stock.

In a not quite symmetrical interplay, the US DOLLAR INDEX fell 47.9 basis points (0.62%) to 78.605 while the euro rose from 1.3525 yesterday to 1.3631 today, up a US penny or 0.33%

Before you throw the buck overboard, stop & ponder. Dollar index hath support from 78.40 (low today, 78.427) to 78.70, & that's precisely where it stopped today. Support did not give, & the dollar had already begun correcting yesterday. Present market looks like a bunch of drunks throwing dice. Sure, the dollar might have hit its 50 day moving average a couple of days ago & thus fulfilled a correction of its downward plunge. Then again, maybe not. Rising from below its 50 DMA, all the Euro got out of this was a rise up to the 50 DMA. Yeah, yeah, maybe the Euro turned up and the dollar down, and maybe not. Let's see how it plays out. For my money I'm not calling the buck out of the game before it crosses its 20 DMA (77.52 now) at least. Maybe the market today was buying the rumour (a deal with Ireland almost done) and will sell the news (deal is signed).

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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 or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.



Wednesday, November 17, 2010

Gold Price Targeting $1,600, No Evidence To Suggest Any Changes To The Chart Set So Long Ago

Gold Price Close Today : 1336.80
Change : (1.50) or -0.1%

Silver Price Close Today : 25.507
Change : 0.278 cents or 1.1%

Gold Silver Ratio Today : 52.41
Change : -0.637 or -1.2%

Silver Gold Ratio Today : 0.01908
Change : 0.000229 or 1.2%

Platinum Price Close Today : 1639.70
Change : -29.80 or -1.8%

Palladium Price Close Today : 659.75
Change : -8.75 or -1.3%

S&P 500 : 1,178.59
Change : 0.25 or 0.0%

Dow In GOLD$ : $170.22
Change : $ (0.03) or 0.0%

Dow in GOLD oz : 8.235
Change : -0.002 or 0.0%

Dow in SILVER oz : 431.56
Change : -0.66 or -0.2%

Dow Industrial : 11,007.88
Change : -15.62 or -0.1%

US Dollar Index : 79.08
Change : -0.132 or -0.2%

The GOLD PRICE played sideways all day, ranging from $1331.30 to $1,341.75, resolving nothing, hinting nothing. This sideways rectangular pattern can be a consolidation for reversal, or it can be a continuation pattern. Nothing tells me which, although today's slightly higher low give about a 2 degree upward bias.

Gold has struck its 50 Day Moving Average ($1,330.25), which often serves as a springboard to turn a correction around.

Recall also the seasonal pattern. 'Tis not rare but common that silver and gold correct in November, then rise through December.

The SILVER PRICE, on the other hand, has been riding its 20 DMA since last July, rather than the 50. Today that 20 DMA stands at 2541c, and silver today sort of bounced off that mark. The silver graph has pierced the 20 DMA about as much as it did back in August. If silver doesn't hold here or at lateral support of 2500c, then you have to cast your eyes down to the 50 DMA at 2335c. Right now, I don't expect that. We may have seen the low yesterday, but it's awfully early to tell. We need confirmation by silver breaking through 2600c.

These mixed closes are no fun. I feel like a bimetallic thermostat in a lukewarm room -- don't know whether to blow hot or cold. Tomorrow will explain all.

Here's one more little hint: premiums are climbing on silver bullion products. 90% coin has risen about a dime, silver bullion 30c and delayed. When premiums begin rising in a falling market, it often marks a turnaround.

Reasons abound for fear in the face of the present market. It could turn out very badly for silver and gold, but I have not yet seen that evidence that can pry me away from the target the chart set so long ago for $1,600 gold. When you are stubborn and right, they call you a genius. When you are stubborn and wrong, they call you a Demo---. No, no, wait, I didn't mean that. I meant a Keynesian. Or a Federal Reserve chairman. Or a socialist -- but I repeat myself.

It's never fun to see a market where one member rises and another falls the same day. Like trying to pick up a rabid weasel, it's almost sure to bite you whichever end you grab.

So today GOLD closed $1.50 lower to $1,336.80 while SILVER rose like a champ 27.8c to 2550.7c. What in the world do you make out of that?

The US DOLLAR INDEX today couldn't pierce that 79.40 resistance, having run through an entire leg up and entered corrective mode. It dropped 13.2 basis points (0.17%) to 79.078. Notice that the buck still hung on to that upward rung of 79. What you are watching is a normal correction within a longer move up. First sign of a break would be the dollar below 78.70. For now the dollar's bubble is a-rising.

STOCKS put in a sorry performance again today. The Dow's daily chart looks like rags hung out to dry on a board fence. Dow fell 15.62 to 11,077.88 while the S&P500 rose 0.25 to 1,178.59. There's another non-confirming market for you. All other indices rose but the Dow -- not by much, but they rose.

Markets that gainsay themselves are bewildered markets, not sure which way to jump.

Hope for the best, but buy sacks of dried beans and plenty of ammo.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, November 16, 2010

9 November Gold Price Tops Began a Correction Within a Move That Will Carry Gold to $1,600 by March

Gold Price Close Today : 1338.30
Change : (30.10) or -2.2%

Silver Price Close Today : 25.229
Change : (0.859) cents or -3.3%

Gold Silver Ratio Today : 53.05
Change : 0.593 or 1.1%

Silver Gold Ratio Today : 0.01885
Change : -0.000213 or -1.1%

Platinum Price Close Today : 1642.80
Change : -26.70 or -1.6%

Palladium Price Close Today : 644.45
Change : -24.05 or -3.6%

S&P 500 : 11,788.34
Change : -19.41 or -0.2%

Dow In GOLD$ : $170.28
Change : $ 1.07 or 0.6%

Dow in GOLD oz : 8.237
Change : 0.052 or 0.6%

Dow in SILVER oz : 436.95
Change : -6.92 or -1.6%

Dow Industrial : 11,023.81
Change : -178.47 or -1.6%

US Dollar Index : 78.62
Change : 0.566 or 0.7%

The GOLD PRICE broke through the trap door at $1,355 and never stopped falling till it hit support at $1,329.80 right before noon, then double bottomed. at the same price just before 1:00 p.m. It began drifting up but Comex still settled down only (!) $30.10 at $1,338.30. In the aftermarket gold strengthened, if from no other source then from dealers covering shorts.

The GOLD PRICE touching $1,317.60 would make a 38.2% correction of the July - November move, and 38.2% is a frequently observed correction. The equivalent correction would carry the SILVER PRICE a little lower, to 2452c. What drop we've seen so far might suffice, and that little double bottom today implies gold found firm support at $1,330.

The SILVER PRICE chart didn't play out quite like gold's. It broke support at 2550c, then dribbled down to 24.98 at noon. That low inspired buying that floated silver up barely over 2550c. On Comex silver closed 85.9c lighter than yesterday at 2522.9c. Since then it has oscillated around 2540c. Again, today may have been correction enough to have sated silver's appetite for correction, but recall that strong lateral support stands at 2490c - 2500c. To confirm a turnaround silver must close above 2555c. By the way, the 20 DMA stands at 2511c, so I would class today as bouncing off the 20 DMA, which has been catching silver since last August.

My opinion hasn't changed: 9 November tops began a correction within a move that will carry gold to $1,600 by March, not a major peak.

Okay, I never do this, but the case is desperate enough to force me to desperate measures.

The US Senate this week is voting on cloture on S. 510. This piece of sorry Bib Brotherism is clothed in lies, beginning with its name, "The Food Safety Bill." It would expand Food and Drug Administration authority over processed and fresh food, and to impose more bone-headed, tyrannical regulations on small farmers. Whole point of this monstrosity is to make the world save for Agribusiness and Giant Food Corporations, and to squelch all their small farmer competition. Oh, and don't forget protecting Big Pharma by reducing our access to dietary supplements. I have heard that S. 510 purports to regulate even food produced from your own garden and criminalize seed saving.

What can you do? Call your senators, both of them, at (202) 224-3132. Tell them to KILL (as in slay utterly) S. 510, The Food Safety Bill. In your own words tell them that you oppose this bill and that it will crush freedom and nutritious food production in America. Tell them you will be watching how your senator votes on this bill and that you have a long memory that stretches from election to election.

A rising US dollar is giving silver and gold bad toothaches. Today the nasty dollar rose 73.1 basis points, nearly 1%, and is now trading at 79.249. Once the buck pierced 78.70, it sprang in one tall bound to 79.40. That shouldn't have surprised y'all.

Yesterday I made a bad typo, one I often make, typing "not" for "now". I wrote that the dollar "hath not reached its 50 DMA (78.62)" when I meant "hath now reached." Once it cleared that 50 DMA, it jumped. That's what you saw today. That leaves the next target as the August intraday low at 80.08, and the 200 DMA at 81.77. Meanwhile, the Euro is sinking like the balance in your bank account when your brother-in-law borrows your debit card. The euro has now dropped below its 50 DMA (1.3640), so it must either turn around quickly, or continue sinking toward its 200 DMA at 1.3158, or August high at 1.3334.

Only reason to bother looking at the nasty Euro is to guess therefrom what the dollar might do. As long as the Euro is plunging, the Dollar Index will keep on rallying. When it looks ready to turn around, we can begin suspecting that the dollar's rally will stop.

Bear in mind the new limits the dollar has set today. A fall below 78.60 takes the dollar lower, a rise above 79.40 buoys the dollar higher.

STOCKS insist on falling and falling. Today's fall was serious. Dow plunged 178.47 to 11,023.81 while the S&P 500 tumbled 19.41 to 1,178.34. That brings the Dow to psychologically weighty 11,000 mark, as well as the 50 DMA (10,966.27). The MACD momentum indicator is falling, faster every day, and the RSI says, "Let me drop further!" Given that the stock market generally turns around very slowly, there's a good chance we might see a bounce off the 50 DMA before the final plunge through it. Maybe that will be the Santa Claus rally this year, giving gifts to all those money managers who need to clean up their performance before year-end. Stay out of stocks.

On this day in 1798 Kentucky became the first state to nullify an act of Congress, the Alien and Sedition Act passed by the Federalist congress to stifle criticism. Nowadays we don't do nullification because we don't have any state legislatures with any courage to speak of. Well, with a few notable exceptions.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, November 15, 2010

The Gold Price Has Plenty of Support Around $1,355 I'll Buy Again at $1,375

Gold Price Close Today : 1368.40
Change : 3.00 or 0.2%

Silver Price Close Today : 26.088
Change : 0.150 cents or 0.6%

Gold Silver Ratio Today : 52.45
Change : -0.188 or -0.4%

Silver Gold Ratio Today : 0.01906
Change : 0.000068 or 0.4%

Platinum Price Close Today : 1669.50
Change : -11.20 or -0.7%

Palladium Price Close Today : 668.50
Change : -7.00 or -1.0%

S&P 500 : 1,199.21
Change : -14.33 or -1.2%

Dow In GOLD$ : $169.08
Change : $ (1.72) or -1.0%

Dow in GOLD oz : 8.179
Change : -0.083 or -1.0%

Dow in SILVER oz : 429.03
Change : -3.49 or -0.8%

Dow Industrial : 11,192.58
Change : -90.52 or -0.8%

US Dollar Index : 78.62
Change : 0.566 or 0.7%

This morning the SILVER PRICE and the GOLD PRICE were up slightly over Friday. I glanced away and looked back and LO! Silver had jumped 20 cents. I looked at the overnight/over the weekend charts for silver and gold, and both appeared to have completed a downmove on Friday and traded sideways into this morning. Both appeared to be bursting for a run. I bought, expecting we had seen the last of correction.

We hadn't.

They peaked about noon Eastern time, then edged downward into the closes. When Comex closed silver had risen 15c from Friday to 2608.8c and gold had climbed $3.00 to $1,368.40. That wasn't much below my shopping basket ride at 2637.5 and 1371.30.

Then the SILVER and GOLD PRICE simply fainted, plump! Gold fell as low as $1,355.90 and silver to 2540c. Both have since recovered, silver to 2573c now and gold to $1,362.

What next? The main defense now is $1,355 and 2540c, but, heaven help me, that looks like the bottom of it. Either I misread the chart and got hit by one more leg down, or tomorrow those support levels will be broken and silver and gold will make one more move earthward. Gold has plenty of support around $1,355, but if that falters then you have to reckon with $1,330 or $1,315. Silver has solid support at 2500c - 2490c, a mere 40c below today's lows. Could see that tomorrow.

Natural born durned fool that I am, if I come in here tomorrow and silver's above 2550c and gold over $1,375, I'll buy 'em again!

However it turns out, I cling to my opinion that this entire correction from 9 November will not belong to the gigantic species but the midget, and is on the road to $1,600.

I can't work up any enthusiasm for talking about stocks. They just stink. Dow today gained a silly 9.39 to 11,201.97 while the S&P500 dropped 1.46 to 1,197.75. Nasdaq Comp was down, along with the Nasdaq 100. It was a sloppy, messy day, accomplishing nothing to gainsay their established downtrend.

DOLLAR INDEX today rose 56.6 basis points to 78.615. Euro dropped a US penny. Dollar index hath not reached its 50 dma (78.62) and must decide whether 'twill fish or cut bait. Looks like it wants to move higher.

This is just a short term rally, my eyes say. Also, I've been ruminating and chewing on what Bozo Ben has in mind, and considering that he is a student of the Great Depression and an unrepentant Keynesian. That implies he has looked at Roosevelt's 41% devaluation of the US dollar (over a year) and come to a typically moronic Keynesian conclusion. After the devaluation, in 1937-38, the stock market crashed worse than 1929, and the Depression dragged on and on. What will Bonzo Ben Super-Keynesian conclude? "Roosevelt failed because he didn't devalue enough. Therefore I, Ben the Beneficient, will do what The Great Prevaricator could not do, I will depreciate even more and make it work."

No, I haven't been a fly on his wall, but I'll bet a dead dog to a possum that's where he's headed. If I've rightly read his mind, all y'all without any silver or gold had better flee now to Mexico, where you'll come a lot nearer finding a job than you will in the US of A a twelvemonth hence.

On this day in 1777 the Continental Congress approved the Articles of Confederation after 16 months of debate. In spite of what all the constitution worshippers say, the Articles government was far superior to the constitution at preserving both federalism and individual rights. Patrick Henry warned everybody during the ratification debates, y'all are giving up both the power of the sword and the power of the purse to a central government, and those are the only two powers worth having. Not enough listened.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Friday, November 12, 2010

Gold Price Correction to $1,323.95, Take Advantage and Load your basket down with Gold and Silver at Momentarily Reduced Prices

Gold Price Close Today : 1,365.40
Gold Price Close 5-Nov : 1,397.30
Change : -31.90 or -2.3%

Silver Price Close Today : 2593.8
Silver Price Close 5-Nov : 2674.4
Change : -80.60 or -3.0%

Gold Silver Ratio Today : 52.64
Gold Silver Ratio 5-Nov : 52.25
Change : 0.39 or 0.8%

Silver Gold Ratio : 0.01900
Silver Gold Ratio 5-Nov : 0.01914
Change : -0.00014 or -0.7%

Dow in Gold Dollars : $ 169.45
Dow in Gold Dollars 5-Nov : $ 169.31
Change : $ 0.15 or 0.1%

Dow in Gold Ounces : 8.197
Dow in Gold Ounces 5-Nov : 8.190
Change : 0.01 or 0.1%

Dow in Silver Ounces : 431.51
Dow in Silver Ounces 5-Nov : 427.91
Change : 3.60 or 0.8%

Dow Industrial : 11,192.58
Dow Industrial 5-Nov : 11,444.08
Change : -251.50 or -2.2%

S&P 500 : 1,199.21
S&P 500 5-Nov : 1,225.85
Change : -26.64 or -2.2%

US Dollar Index : 78.093
US Dollar Index 5-Nov : 76.602
Change : 1.49 or 1.9%

Platinum Price Close Today : 1,680.70
Platinum Price Close 5-Nov : 1,767.50
Change : -86.80 or -4.9%

Palladium Price Close Today : 675.50
Palladium Price Close 5-Nov : 684.45
Change : -8.95 or -1.3%

The GOLD PRICE got rode hard and put away wet today. Once it breached that $1,385 line in the ground all the guards starting shooting. Gold tried to rise after the New York open, reached $1,395, then ran for cover, hitting $1,379.5 by 12:30. Comex close came at $1,365.40, $37.70 lighter than yesterday. Gold has since levelled off between $1,365 and $1,370.

Whither gold? From the 9 November high, assuming that Gold is correcting its July - November move, a 20% correction would reach $1,361.52. That target was reached today. A 38.2% correction would reach $1,317.59, and a 50% correction would reach $1,289.10. I state no opinion here, I only crunch numbers. That $1,360 level also sports strong lateral chart support, as does $1,315. I would be really surprised if gold reached $1,289.10 (that is an opinion.) The 50 DMA also offers another echo at $1,323.95. 20 DMA stands at $1,361.82. Now, I've thrown all the eggs into the bowl -- y'all stir them up and pick out whichever one you like.

The SILVER PRICE was innocently walking down an alley when a mob of muggers jumped out of the corner at 2650c and commenced pounding silver's head with a tire iron (in some parts of the South pronounced "tar-arn.") That happened in broad daylight, around 10:45, and they knocked silver clean to the ground and down a manhole, all the way to 25.77. Silver managed to gather enough strength to climb out of the manhole and crawl along the pavement between 2585c and 2620c. On Comex it closed down a massive 146.3c at 2593.8c.

From July to 9 November 2010 silver rose from 1742.3c to 2890.2c, 1147.9c. Whew. Think about that. The chart shows lots of lateral support around 2500c and the 20 DMA lieth also there at 2497c. 50 DMA stands at 2288c. A 20% correction lands silver at 2660.6c, a little above today's activity. A 38.2% correction reaches 2451.7c. A 50% correction would reach 2316c.

Now for an opinion, a plethora of which I always go armed with. Looking at the chart, that 2500c jumps out and grabs your eyeballs. If today marked not the bottom of the move, then 2500c will surely contain it. Bear in mind that silver, as a smaller market, is always more volatile than gold. That's what makes life interesting.

Now let us ponder this week's markets. Behold, the gold and silver chickens flew off the roost this week, extending their correction. US dollar appears to have turned up, and stocks are turning down and wallowing in the Slough of Despond, Bubba Bernanke notwithstanding.

Before the weekend many traders close out positions, taking profits and flattening positions so they can enjoy their martinis on Long Island over the weekend -- thus the dollar's behavior today, losing 12.4 basis points (0.16%) and trading to 78.093 after a very strong week. Move started at 76.6 and moved to 78.09, adding 149 basis points. By closing above 77 and then 78, and its 20 day moving average, the dollar has confirmed, re-confirmed, and re-re-confirmed its reversal. Likely targets overhead lie at 78.77, the 50 DMA, the 80, the last low, then 83.56, the last high. 200 DMA also has a bull's eye on it at 81.79. The lower the dollar reaches, the weaker we will know it is. After such a long fall (83.56 - 76.14) so re-bound, even the meaningless writhing of a snake you ran over with your Ford pickup, is inevitable. Me, I'm laying my bets on 80 at least.

What is a "downtrend"? That is a series of lower highs and lower lows. What has the stock market been doing the last six days? Making lower highs and lower lows. Even my public- school educated logic tells me that is a downtrend. But then, does that surprise anyone other than stockbrokers, Wall Street, and TV and NPR pundits? All the rest of us know that PRIMARY DOWN TRENDS (those that last 15 - 20 years) always resume their gravity-led trajectory after brief bear market rallies. And stocks are in a primary downtrend that will last until 2015 or 2020. See now why I shun stocks?

Today the Dow lost 90.52 points to close at 11,192.58 S&P 500 lost 14.33 points to close at 1,199.21.

Lift up your eyes to the horizon, and call to mind the SILVER and GOLD PRICE performance the last nine years: 'tis a bull market, and a bull market it remains. Take advantage of this opportunity to load your basket down with gold and silver at momentarily reduced prices.

One little prayer request: my wife Susan has to have a pacemaker implanted on 26 November. I would deeply appreciate your prayers for her.

Y'all enjoy your weekend.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Thursday, November 11, 2010

The Gold Price Would Be Strengthened By a Few Days Correction and Lower Prices, Gold's Primary Trend Is Up, Targeting At Least $3,130

Gold Price Close Today : 1403.10
Change : 4.00 or 0.3%

Silver Price Close Today : 27.401
Change : 0.540 cents or 2.0%

Gold Silver Ratio Today : 51.21
Change : -0.881 or -1.7%

Silver Gold Ratio Today : 0.01953
Change : 0.000330 or 1.7%

Platinum Price Close Today : 1751.30
Change : -36.50 or -2.0%

Palladium Price Close Today : 710.00
Change : 0.00 or 0.0%

S&P 500 : 1,218.71
Change : -5.17 or -0.4%

Dow In GOLD$ : $166.23
Change : $ (1.55) or -0.9%

Dow in GOLD oz : 8.042
Change : -0.075 or -0.9%

Dow in SILVER oz : 411.78
Change : -2.78 or -0.7%

Dow Industrial : 11,283.10
Change : -73.94 or -0.7%

US Dollar Index : 78.16
Change : 0.529 or 0.7%

The GOLD PRICE eased up to a high today at $1,416.60 in spikey up and down trading. Low came at 1396.95, a $20 range high to low. Since yesterday gold has traded out an uptrend, for as much as two days' trading means. Today painted a more attractive chart since gold bested yesterday's $1,410 high. However, I will remain spooked and flinched for further downside moves until gold betters that last high around $1,425. That's just a reality of life. On Comex today gold settled up $4.00 at $1,403.10.

The SILVER PRICE chart equivocates much louder than gold's (yes, that was a joke, in case y'all missed it.) Rather than tracing out an uptrend the past two days, silver has traced out a long, narrow even-sided triangle that hints not even a nod which way it will resolve, up or down. Bottom of that triangle is at 2650c, top is at 2800c. Whichever direction it breaks first will carry a good distance the same way. Today silver closed on Comex at 2740c, up 54 cents.

Both SILVER and GOLD would be strengthened by a few days correction and lower prices, to shake out some of those weak hands who have been buying in on rising prices. However, it's for the market to speak, not me. Another hint at coming events comes from availability of gold and silver physicals. Suddenly wholesalers are quoting me delays on silver products and the less expensive gold items. It's not much, but it does perk up my ears.

I need to address a couple of questions y'all keep emailing me about.

First, no, raising the margin limit on silver futures contracts did NOT kill the silver market. That happened around the close on the day silver and gold fell, but it really was nothing more than a catalyst. Remember this: futures markets are run for benefit of the market makers, not the customers. Whenever they get their toe in the wringer, they are going to stick it to the public. They always raise margin requirements in hot markets to drive away the interest, or at least to up the ante on the players. The fundamental reason the market fell is found in its overbought condition; the margin-raising was merely the catalyst. It it hadn't been that, it would have been stray dogs.

Second, the millennium has not arrived and the world is not about to adopt gold-backed money, never mind what World Bank apparatchik and Commissar Robert Zoellick said on 7 November in his Financial Times article. He wrote verbatim, "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." 'Twas a single paragraph out of 13, and peering thru the cloud of annoying and sytlistically disgusting bureaucratic smoke-blowing, he says, "The international monetary system and its players might as well adopt gold in some remote way, because it is the measuring stick markets are already using." Yes, his next paragraph stated broadly that the era of floating exchange rates had become an unworkable embarassment (my paraphrase), but it will take a long time to develop something else.

Any way you read this, nothing will happen soon. This is merely a very early bird trial balloon, like Bill Clinton's statement a year or so ago, showing that some voices in the Establishment want gold adopted back into the system, probably because they have already loaded up their own boats with it. Somebody, after all, was buying in the late 1990s and early 2000s when governments were selling under the table, and you can bet it was those with what the Spanish call enchufe, connections. In any event, action is years away. Besides, adopting gold into the system is worse than meaningless, it will only gold plate the corrupt, fraudulent monetary system to keep it alive a bit longer. No reform will answer except a return to gold and silver money along with full and complete abolition of central banks, fiat money, and fractional reserve banking, because those are the thieves of our liberty and our prosperity.

Whew! Feels better to get that bone out of my craw. These government-bureaucrat-and-central-banking weasels make we want to puke.

The US DOLLAR INDEX blew through 78 resistance today, bouncing off a 78.28 high and now at 78.163, rising 52.9 basis points (0.68%). Yes, that is another fleshy rise, fifth day running. Meanwhile the Euro continues to fall.

Dollar's six month chart has traced out a W or double bottom pattern with points at 76.14 and 75.63. Resistance at 78.28 has been tapped thrice, so next time -- tomorrow, maybe? -- should hammer through. 50 DMA stands at 78.77, and certainly is one target for this move. Will it be the ultimate target? Not judging from the dollar's recent strength. Soon the shorts will panic. Above the 50 DMA the dollar takes aim on 80, then 82. Failing at the 50 DMA will have grim implications for the dollar, and send it plunging. For now, though, that dollar chart looks strong.

Nothing could make STOCKS float today. Dow closed at 11,283.10 losing 73.94 points. S&P gave up 5.17 to close 1,213.54. Beginning to feel like stocks have topped for this move. However, the stock market turns very slowly, so that may take awhile. Dow has worked its way down to its 20 DMA at 11,203.28, tripwire for lower prices. Lots of air thereunder.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Wednesday, November 10, 2010

The Gold Price Must Beat Its Way Through $1,410 and Silver Through 2815c to Confirm an Upturn, Tomorrow All Will Be Clear

Gold Price Close Today : 1399.10
Change : (10.70) or -0.8%

Silver Price Close Today : 26.861
Change : (2.041) cents or -7.1%

Gold Silver Ratio Today : 52.09
Change : 3.308 or 6.8%

Silver Gold Ratio Today : 0.01920
Change : -0.001302 or -6.4%

Platinum Price Close Today : 1743.80
Change : -44.00 or -2.5%

Palladium Price Close Today : 700.45
Change : -18.65 or -2.6%

S&P 500 : 1,218.71
Change : 5.31 or 0.4%

Dow In GOLD$ : $167.80
Change : $ 1.44 or 0.9%

Dow in GOLD oz : 8.117
Change : 0.070 or 0.9%

Dow in SILVER oz : 422.81
Change : 0.70 or 0.2%

Dow Industrial : 11,357.04
Change : 10.29 or 0.1%

US Dollar Index : 77.66
Change : 0.214 or 0.3%

For both the GOLD PRICE and the SILVER PRICE, here's what argues against a key reversal: the lows yesterday and today are nearly identical, 2650c and $1,385. That leaves a pattern that might be a completed ABC correction and a double-bottom -- or more indecision.

Remember that a "key reversal" requires two elements. First, the market rises into new high territory, but ends the day lower than the previous day. Next, it must follow through the subsequent day with another lower close. What does that say, applied to gold and silver?

Taking the entire day's trading and not the Comex closes alone, both metals completed a key reversal yesterday and today, I think. On Comex silver closed down 204.1c to 2686.1c, but that loss is exaggerated. Remember that silver's fall yesterday occurred mostly after the Comex close. Silver now costs 2724c versus 2694c yesterday. Now you might think that gainsays that "lower close" requirement, but I'm not sure how to call it.

Tomorrow will make all things clear. If silver and gold drop below those marks, then it was a key reversal and lower prices are coming. Looking the other way, gold must beat its way through $1,410 and silver through 2815c to confirm an upturn.

It seems I have the rare ability to write many words without ever making myself fully understood. Case in point is my remarks yesterday about the GOLD/SILVER RATIO target for our silver to gold swaps. Yes, like the rest of the world a wave of indecision and greed occasionally washeth over me, and it did yesterday because that ratio was dropping so fast. Looked likely to crash clean through our target and sink to the center of the earth before it reversed.

I spent more time last night than I care to remember staring at charts and exposing my old eyeballs to the radiation of a cathode ray tube. I came away with the provisional (there's that indecision again, popping up it sickly head) conclusion that we are about to experience a correction in silver and gold that may carry the ratio up to 56 or 57.5 (52.7 is a shallower possibility).

Right, do the math. When the ratio rises, the prices of silver and gold usually fall.

What I believe has happened -- all still in the midst of an ongoing rally to $1,600 and 3400c - 3950c -- is that the ratio hit a fan or downtrend line from 2003, and the uptrend line from 2006 and 2008, and bounced. Oh, the ratio will surely penetrate that line, but as overextended as it was, any excuse for a correction would answer.

"All wrong" would be writ all over this outlook if gold closes over $1,424 and silver over 2890c.

Because I have obfuscated again and sprayed the conclusion abundantly with words, here's the ratio target: still 47.5, for the nonce.

Now glance over at the dollar. Today the US DOLLAR INDEX stuffed another 21.4 basis points under its shirt to 77.657, up 0.28%.

Dollar continued to drift upwards, and now is elbowing resistance at 78. The Euro shows a double top, the yen shows a twisted island reversal, and nobody in Europe or Japan wants a currency appreciating against the buck. Ergo, expect a higher dollar for a space.

STOCKS stumbled higher today. Dow eked out 10.29 to perch at 11,357.04, while the S&P 500 gained about 5 times as much, rising 5.31 to 1,218.71 Yet the Dow in Gold Dollars has broken down and is hinting, although hasn't yet laid the money down, that stocks are about to plunge against gold. Leave this bear market to maul others, y'all stay out.

Don't get shaken: the bull market in SILVER and GOLD has a long, fruitful life in front of it. Go home tonight and kiss your wife or husband, enjoy your dinner and your kids, and know that if you've bought silver and gold, you've done your best to protect your family from the wicked Vandals in Washington.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Tuesday, November 09, 2010

The Gold Price Posted First Half of a Key Reversal, Any Gold Price Close Above $1,425 or Silver Price Above 2933c Sets Off Another Balloon Ride

Gold Price Close Today : 1409.80
Change : 7.00 or 0.5%

Silver Price Close Today : 28.902
Change : 1.474 cents or 5.4%

Gold Silver Ratio Today : 48.78
Change : -2.366 or -4.6%

Silver Gold Ratio Today : 0.02050
Change : 0.000948 or 4.9%

Platinum Price Close Today : 1787.80
Change : 20.30 or 1.1%

Palladium Price Close Today : 719.10
Change : 34.65 or 5.1%

S&P 500 : 1,213.40
Change : -9.85 or -0.8%

Dow In GOLD$ : $166.38
Change : $ (1.70) or -1.0%

Dow in GOLD oz : 8.048
Change : -0.082 or -1.0%

Dow in SILVER oz : 392.59
Change : -2.28 or -0.6%

Dow Industrial : 11,346.75
Change : -60.09 or -0.5%

US Dollar Index : 77.75
Change : 0.723 or 0.9%

The GOLD PRICE and the SILVER PRICE today posted what I have to interpret as a downside reversal. It looked like the first half of a key reversal (rise into new high territory with a lower close) if you take in the entire day's action. I'm inclined to do that as the Comex close becomes less and less a shibboleth with 24 hour computerized trading moving in.

Looking at the Comex closes it was a banner day. Silver rose a lung-emptying 147.4c to a new high at 2890.2c and gold struck another new all-time high at $1,409.80, $7.00 higher than yesterday. Yet about Comex closing time (1:30 p.m. Eastern) it began falling, and kept on falling, from a high of $1,424.30 down to $1,409.80 at close to $1,382.70 at 3:45 Eastern. It quickly bounced off that low to about $1,394 now.

Silver reached 2933c about 1:00, then fell sharply. By closing it had only fallen to 2890.2c, but afterwards it kept on tumbling to a low of 2643c, and has since traded up to 2694c.

As silver and gold dropped, the ratio soared, ending as I write this at 51.73.

All that action resembles the first half of a key reversal, but the second half must also be fulfilled, namely, a lower close the following day. That we will have to wait to tomorrow to observe.

Repeatedly I have warned that this is a crazy market with dangerous volatility, so this shouldn't surprise any of y'all. I still believe that the top of this long move that began in February 2010 at 1,044.50 will not strike before it reaches $1,600.

This correction will not unfold as a major event unless it breaches $1,315. 50 DMA lies at $1,317.50. Last intraday peak was $1,387.10. This may be nothing more than a one or two day affair, and even this move that began at $1,155.90 should move considerably higher before it ends.

Silver might drop to support around 2500c, or even to the 20 DMA at 2464c or the 50 DMA at 2255c. It's wild, it's volatile, but it has not finished rising.

One of those emotions you must control is the wild fear that grips your heart in a swiftly rising market. Here is the event you planned for, you waited for, you envisioned when everyone else could see only empty space and cigarette butts, and now it's happening! But it's so parabolic, so fierce and monstrous, it leaves even you wondering whether it's a bubble. Recall: bull markets always climb a wall of worry.

Remember that you climbed on to ride the 15-20 YEAR primary trend, and we are only 9 years into that.

On the upside, any GOLD PRICE close above $1,425 or SILVER PRICE above 2933c sets off another balloon ride.

Why do we make rules for ourselves, especially trading rules? So that when the time comes to act, our emotions won't overcome and defeat us. Otherwise -- I promise -- at peaks or at troughs your emotions and indecision will paralyze you. That also explains why we tear the top off any chart we are analyzing, so our desires and fears won't warp our judgment.

So today I came in to find the GOLD/SILVER RATIO at 48.3 to 1 (48.3 ounces of silver buy one oz of gold), and my stomach wanted to jump out of my mouth and run down the road. Whoa! I thought, I haven't had time to re-examine that ratio, maybe we ought to move that trigger down to 41:1! We don't want to leave 16% lying on the table!

As it turned out, the market took me off the hook, but I'll explain that below.

The US DOLLAR today made good its escape from the chains of 77 (remember yesterday late it was trading at 77.032) but first had to dip in the overnight market to 76.70. Thereafter the buck marched straight up all day, bouncing off 77.87. It added 72.3 basis points (0.93%) to 77.75. That's a meaty, respectable rise, and it carries the dollar above the previous high at 77.40, and adds another confirmation to a dollar rally. Dollar also closed above the 20 DMA (77.15) today, another confirmation of an upmove.

Dollar's first target is 78.25, then 80. Seems to be aiming higher.

STOCKS reached new lows against silver and gold today. Dow in Gold Dollars hit G$166.44 (8.052 oz); Dow in Silver Ounces hit 392.59 [sic]. In raw dollar terms, the Dow today lost 60.09 points to close at 11,346.75. S&P500 lost 9.85 to 1,213.40. I say it again as I have said it before, like Cato demanding the destruction of Carthage, stay away from stocks. Don't own 'em, don't short 'em (unless you have plenty of patience and deep pockets).


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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.



Monday, November 08, 2010

The Gold Price Revolting Against ALL Fiat Currencies, Not Only Against The Declining US Dollar

Gold Price Close Today : 1402.80
Change : 5.50 or 0.4%

Silver Price Close Today : 27.428
Change : 0.684 cents or 2.6%

Gold Silver Ratio Today : 51.14
Change : -1.102 or -2.1%

Silver Gold Ratio Today : 0.01955
Change : 0.000413 or 2.2%

Platinum Price Close Today : 1772.00
Change : 4.50 or 0.3%

Palladium Price Close Today : 712.00
Change : 27.55 or 4.0%

S&P 500 : 1,223.25
Change : -2.60 or -0.2%

Dow In GOLD$ : $168.09
Change : $ (1.20) or -0.7%

Dow in GOLD oz : 8.131
Change : -0.058 or -0.7%

Dow in SILVER oz : 411.35
Change : -5.99 or -1.4%

Dow Industrial : 11,406.84
Change : -37.24 or -0.3%

US Dollar Index : 77.03
Change : 0.588 or 0.8%

The GOLD PRICE and the SILVER PRICE are rising not only on dollar terms, but also in yen and euros, therefore it cannot be the US dollar decline alone that is driving metals, but a revulsion against ALL fiat currencies. Finally, the US dollar rose today, about 3/4 of 1%, yet silver and gold climbed madly.

Now here's the question everybody has to answer: Is it a bubble, or a bull market? A hint: Bull markets always climb a wall of worry. Bull markets (primary up trends) run 15 - 20 years. The silver and gold bull market began in 2001; 2010 less 2001 equals nine years, not fifteen years.

Let's be clear: SILVER is way, way overbought. The RSI is at 81.04, and anything above 70 is overbought. Yet the MACD indicator, overextended as it is, shows a clear uptrend, a determined uptrend. Just as silver shot through the 2500s in one day, today it cleared half of the 2700s. The Comex close came at 2742.8c, up 68.4c but in the aftermarket silver kept on shooting up to its present 2773c. Brace yourself: I believe it will go even higher tomorrow. Today at 9:00 when I came in silver was 2675c. At 11:00 it reached 2720c, and by 1:00 2760c.

Y'all remember that I said there was no resistance on the chart (looking back at 1980 and 1981) between 2500c and 3400c, and then between there and 3950c. What you saw today is what happens to a market on fire when no resistance stands in its way.

GOLD/SILVER RATIO today fell nearabout to 51. I am trying to get time to study its progress to decide whether we ought to move our swap target down from 47.50.

The GOLD PRICE behaved almost as spectacularly as silver. On Comex it gained only 5.50 to close at $1,402.80, but that tells a truncated story. In the aftermarket gold is now trading at $1,409.60. Higher prices are coming still.

Tomorrow will inform us what to expect of silver and gold against a more persistently rising dollar. Clearly, though, the Federal Reserve and the Obama regime have taken the monumentally stupid (and ideologically Keynesian) decision to try to rescue the US economy by devaluing the dollar, maybe by 25% in six months. Remember that Roosevelt devalued the dollar from $20.6718/oz to $35/oz by 41%, but he did that over the course of a year. Then the economy REALLY tanked, and the stock market plunge of 1937-38 was even worse than the 1929 crash. Ahhh, but the builders of this Maginot line still believe that what failed in the 1930s will work today, if we only do MORE of it.

The US DOLLAR INDEX today scratched and scrabbled over 77, stuffing its pockets with 58.8 basis points to the present 77.032. The 5l-day chart clearly demonstrates that the US dollar made at least an interim bottom at 75.65 on Thursday. Climbing above 76.90 resistance and closing above 77 are the first confirmation of a dollar rally. There's more about this, too: the Euro has been falling since that island pop I pointed out last Thursday. Euro gapped down both Thursday and today, closing below the 20 DMA, first sign of a trend change. Yen appears to be rolling over, too, tugged by gravity.

All these argue that the US dollar has turned up, at least for a short time.

STOCKS spent the whole day underwater and no mystery buyers flew in at the last moment to pull them up. Dow lost 37.24 to end at 11,406.84. S&P lost 2.60 to 1,223.25. Stay out of stocks. Don't buy them, don't short them. It's a rattlesnake market locked in a bear trend.

And on this day in 1967 silver hit an all-time record high of $1.951 an ounce in London.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com

© 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.