Wednesday, March 23, 2011

The Silver Price Broke Out Today

Gold Price Close Today : 1437.90
Change : 10.40 or 0.7%

Silver Price Close Today : 37.202
Change : 0.931 cents or 2.6%

Gold Silver Ratio Today : 38.65
Change : -0.705 or -1.8%

Silver Gold Ratio Today : 0.02587
Change : 0.000464 or 1.8%

Platinum Price Close Today : 1757.30
Change : 17.00 or 1.0%

Palladium Price Close Today : 748.25
Change : 10.35 or 1.4%

S&P 500 : 1,297.54
Change : 3.77 or 0.3%

Dow In GOLD$ : $173.75
Change : $ (0.27) or -0.2%

Dow in GOLD oz : 8.405
Change : -0.013 or -0.2%

Dow in SILVER oz : 324.88
Change : 1.73 or 0.5%

Dow Industrial : 12,086.02
Change : 67.39 or 0.6%

US Dollar Index : 75.93
Change : 0.493 or 0.7%

Sometimes no matter how much you feel like dragging your feet and holding back, you have to cast aside your reservations and follow the technical rules.

I mean that markets are screwy. Stocks should have tanked, silver and gold should have corrected, and the very franticness of these markets keeps whispering in my ear, "Something ugly, something big, is happening where we can't see it." But I can't fight it any longer, and here's why.

First, the SILVER PRICE broke out today, plainly, undeniably, and not for some little piddling move. It closed 3.2% above the previous (9 March 3604.3c) high, at 3720.2c, up 93.1c on Comex today alone.

Next, the GOLD PRICE has reached its 1 March high ($1,437.20). Comex rose $10.40 today and came to rest at $1,437.90. Last missing piece of confirmation is a gold price close 2% above 3 January or $1,451. You'll see that soon enough, unless bottom falls out of silver and gold prices tomorrow.

Meanwhile the Nice Government Men are in Hog Heaven manipulating the yen, euro, and dollar. Dollar index rose 49.3 basis points today, a big move of 0.63%, to end at 75.927. Yen barely moved, up 0.05% to 80.916 yen to the dollar ($123.58 cents to 100 yen). Euro played snooze and lose, down 0.61% to 1.4088. Euro may have left behind an island reversal, but can't tell until tomorrow. (For charts, see, using symbols "$xeu", "$xjy", and "$usd".) Dollar's next move ought to be up, but who can read the minds of Nice Government Men, assuming of course they have minds.

STOCKS began the day hanging their heads and ready to take a guilty beating, but about 12:30 a "friend" came along and took them up to 12,086.02 (up 67.39) and 1,297.54, up 3.77. Today's gain does nothing at all for pulling stocks out of their precarious position. Last 3 days on the 5 day chart look like something from Outer Space, two days practically dead flat, hovering just above 12,000 like snake doctors over a spring.

I don't know anything except I don't want to own stocks. Yes, technically the Dow climbed above its 20 DMA (12,038.04), but that decline from the February high simply does not look complete.

The GOLD PRICE cleared $1,430 resistance about 4:00 a.m. New York time and by NY open had traded up to $1,434. It took a small hit back to test that 1430 resistance ("final kiss good-bye"), then shot straight up to $1,440.90 and traded sidewise the rest of the day. Comex close caught gold $10.40 dearer than yesterday at $1,437.90.

I can't stand in the way of strength like this. I bought gold today, and will buy more tomorrow if it doesn't run away.

SILVER, sweet metal of the moon, you have me utterly baffled, but who dares stand athwart the path of such power?

Once the silver price crossed 3660c resistance about 10:00 a.m. it marched right ahead, pushing through 3700c like John Wayne pushing through swinging doors in a saloon, and its progress never found a check until 3740c. Comex found silver -- with a telescope -- 93.1c higher at 3720.2c.

Gold/silver ratio hit a new low today at 38.65 -- yet another sign of great strength.

Silver seems to have set its mind on reaching 4000c, maybe 4200c or 4400c. Higher, in any event. Higher, against all currents.

Oh, yeah, there will come a day when a panic bites and everybody runs the other way, but not yet. For now the steed has the bit in its mouth and will run away.

Don't forget we need confirmation through higher gold and silver prices tomorrow.

Here's is something yet weightier to think on. On this day March, 1775, to the Virginia House of Burgesses meeting in St. John's Church in Richmond, Patrick Henry spoke to persuade the house to mobilize for military action against the British. The speech is perhaps the most eloquent, most heart-moving you will ever read, filled with echoes of the Scriptures Henry had fed on since his childhood, but not as quotations alien to his matter, but as the warp and woof of life and action and character. Listen:

"It is in vain, sir, to extenuate the matter. Gentlemen may cry, Peace, Peace -- but there is no peace. The war is actually begun. The next gale that sweeps from the north will bring to our ears the clash of resounding arms! Our brethren are already in the field. Why stand we here idle? What is it the gentlemen wish? What would they have? Is life so sweet, or peace so dear, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take, but as for me, give me liberty, or give me death!"

Later elected Virginia's wartime governor, Henry seemed four men. His energy, preparations, and activities reached in all directions. But most appealing of all, when he could retire from politics, he gladly did, to spend more time doing what he most enjoyed: romping on the floor with some of his seventeen children.

Small wonder more Americans thought of Henry as the Father of their Country rather than Washington.

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

- Franklin Sanders, The Moneychanger

© 2011, 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.