Wednesday, February 02, 2011

Gold Price Has Work To Do Down Below, Stocks Setting Up For Painful Break

Gold Price Close Today : 1331.50
Change : (8.10) or -0.6%

Silver Price Close Today : 28.299
Change : (0.225) cents or -0.8%

Gold Silver Ratio Today : 47.05
Change : 0.087 or 0.2%

Silver Gold Ratio Today : 0.02125
Change : -0.000039 or -0.2%

Platinum Price Close Today : 1833.00
Change : 6.90 or 0.4%

Palladium Price Close Today : 815.05
Change : -7.15 or -0.9%

S&P 500 : 1,304.03
Change : -3.56 or -0.3%

Dow In GOLD$ : $186.95
Change : $ 1.18 or 0.6%

Dow in GOLD oz : 9.044
Change : 0.057 or 0.6%

Dow in SILVER oz : 425.53
Change : 0.10 or 0.0%

Dow Industrial : 12,041.97
Change : 1.81 or 0.0%

US Dollar Index : 77.09
Change : 0.026 or 0.0%

The GOLD PRICE did nothing today to inspire a raft of optimism. Low came at $1,326.40, which over the past three days gold has thrice struck. That raises the expectation that gold will break DOWN through that mark. However, it could clear $1,345 that would erase that expectation. Arguing against lower prices are the MACD and RSI turning up or trying to turn up.

The SILVER PRICE met its 50 day moving average today (2872c) but liked it not. Fell 22.5c to 2829.9c on Comex, and closed slap on its 20 DMA. Now that might be nothing more than the jiggling that a market does trying to break through resistance, or it might be the jiggling a market does just before it gives up and falls. Daily chart looks like -- believe it or not -- a rounding TOP.

Silver must clear resistance at 2860c. Downside it must hold 2790c. Below that awaits a waterfall. Be patient, the market will tell us.

Platinum rose to $1,833 today, not quite touching its last high at $1,843. Palladium fell from yesterday's high. Everywhere I turn, things are talking out of both sides of their mouths at once.

Bottom line is that I believe the SILVER PRICE and GOLD PRICE have a little more work to do down below, and stocks are setting up for a painful break. I am not, however dogmatic about anything but my anti-dogmaticism, and can tolerate anything but intolerance.

The re-printing of Edwin Vieira's classic legal-monetary history has revived, 2 vols., 1700 pp. GoldMoney Foundation is republishing it. I am late notifying y'all, but to order send a check for $159.95 to Edwin Vieira, 52 Stonegate Ct., Front Royal, VA 22630. Add $7.50 tax for orders shipped to Virginia. I cannot recommend this work highly enough. Nothing else comes close to it.

Tomorrow I am travelling to Maryland where I will be speaking on Friday evening for the Institute on the Constitution. See for details. That means today's commentary will be my last this week. God willing I will return on Monday, probably as confused as ever.

Turns out my suspicions yesterday might have been justified. Might, I say, might.

Those stocks that yesterday were jubilant at a new high for the move looked a mite hungover today, like they'd gotten deep into some really bad 'shine. The Dow's chart today looked like a clothesline full of rags on a bad windy day, blowing up and down and every which way. Of all the stock indices the Dow alone rose today, and that by a mighty 1.81 points (yep, you read that aright) to 12,041.97. S&P fell 3.56 to to 1,304.03. Folks, the truth is that if you lie down with dogs you're gonna wake up with fleas. Just hang in there with stocks and watch what happens. Be sure to buy yourself a couple of shakers of flea powder, though. And before it's over, you may need some of that really bad moonshine.

At 77.093 the dollar index rose a miniscule 2.6 basis points, but it looks better than that on the chart. There it looks like a rounding bottom about 76.85. Today MIGHT have marked the end of the dollar's fall, but stay flinched, because nothing's sure yet.

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

- Franklin Sanders, The Moneychanger
Phone: (888) 218-9226 or (931) 766-6066

© 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.