Wednesday, February 09, 2011

Silver and Gold Price Both Remain in an Uptrend With All Indicators On Go, or Are They?

Gold Price Close Today : 1364.80
Change : 1.40 or 0.1%

Silver Price Close Today : 30.273
Change : 0.002 cents or 0.0%

Gold Silver Ratio Today : 45.08
Change : 0.043 or 0.1%

Silver Gold Ratio Today : 0.02218
Change : -0.000021 or -0.1%

Platinum Price Close Today : 1854.10
Change : -3.80 or -0.2%

Palladium Price Close Today : 830.25
Change : -7.15 or -0.9%

S&P 500 : 1,320.88
Change : -3.69 or -0.3%

Dow In GOLD$ : $185.39
Change : $ (0.07) or 0.0%

Dow in GOLD oz : 8.968
Change : -0.003 or 0.0%

Dow in SILVER oz : 404.32
Change : 0.22 or 0.1%

Dow Industrial : 12,239.89
Change : 6.74 or 0.1%

US Dollar Index : 77.59
Change : -0.406 or -0.5%

Y'all might expect me to be a drooling cheerleader for SILVER PRICE and GOLD PRICE, but I'll tell you, today inspireth not. Gold rose $1.40 to $1,364.80; silver rose 2/10 (two-tenths) of a cent to 3027.3c. GOLD/SILVER RATIO climbed a bit to 45.08.

I've pored over charts till my eyelids have bled, but I still have no certainty what's happening. There is precedent for this indecision at gold/silver ratio reaction highs (made after a long fall and low) but not at the lows. Usually the ratio drops straight down, then springs straight up, no indecision, no hesitation. There's always a first time, I suppose, but it seemeth more logical that it foretells another silver and gold price rise, but today's closes are tired, tired, and plumb out of breath.

Yet silver and gold both remain in an uptrend with all indicators on go. Well, that's not QUITE accurate. RSI and MACD point up, but silver bumped today against its top Bollinger Band and gold isn't far from the same barrier. Bollinger Bands delimit two standard deviations from the 20 day moving average, and only rarely does a move pierce that boundary, up or down. That argues for a slight rebound down off the Bollinger Bands at least.

For the nonce, watch GOLD downside at $1,355, because it shouldn't violate that support, and must not violate $1,345. Up above it must challenge and conquer $1,380.

Watch SILVER to see how it acts at 2970c, and at 3000c. Above silver must breach 3050c. I'm not a traffic cop, but I know where the curbs are.

Forgot to mention that premium (actually a discount, or, as a creative government bureaucrat might say it, a "negative premium") on US 90% silver coin fell today. That's a little hint silver is getting heavy.

I was surprised to hear from a reader today that he didn't know that we sell silver and gold. In case some of the rest of y'all don't know either, yes, we do -- or at least, we try to. Y'all will find ordering instructions at the bottom of this email every day.

It's hard, hard, hard to befriend the US dollar, like trying to befriend a meth-head. About the time you think it's going straight, it falls again. Today the US dollar index fell 40.6 basis points (0.52%) to 77.593. Just getting CLOSE to the 20 day moving average (78.17) slapped the dollar silly.

Best the dollar might hope for is that the chart is building an upside down head and shoulders (see, "$usd", 6 month chart, OHLC bars). If that's true, the dollar index will not dip below 77.50. Otherwise, it is merely meandering its way to perdition.

The Dollar Index's MACD, by the way, has turned up.

In my short life I've seen some big whoppers, but I have hardly ever seen a lie as shameless as today's Dow close. Every other stock index was down, and the Dow itself spent a tortured day trying to stand up and getting kicked in the teeth. Every other index closed down, S&P500 down 3.69 at 1,320.88, but not the Dow. Look there on the far right side of the chart, that little booger there. Right, that's the uptick at day's end that raised the Dow 6.74 to 12,239.89. See, that's the thing about the Nice Government Men: they ain't subtle.

Stocks remain the nasty used sneakers in the Great Investment Shoe Store. Leave 'em alone or you might catch something fungal.

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.