Wednesday, March 09, 2011

Until The Gold Price Beats $1,436 We Are Just Waiting For A Resolution

Gold Price Close Today : 1429.30
Change : 2.40 or 0.2%

Silver Price Close Today : 36.043
Change : 0.390 cents or 1.1%

Gold Silver Ratio Today : 39.66
Change : -0.366 or -0.9%

Silver Gold Ratio Today : 0.02522
Change : 0.000231 or 0.9%

Platinum Price Close Today : 1805.00
Change : -1.00 or -0.1%

Palladium Price Close Today : 783.50
Change : -7.50 or -0.9%

S&P 500 : 1,320.02
Change : -1.80 or -0.1%

Dow In GOLD$ : $176.64
Change : $ (0.30) or -0.2%

Dow in GOLD oz : 8.545
Change : -0.014 or -0.2%

Dow in SILVER oz : 338.85
Change : -0.07 or 0.0%

Dow Industrial : 12,213.09
Change : -1.29 or 0.0%

US Dollar Index : 76.72
Change : 0.079 or 0.1%

The GOLD PRICE didn't resolve any controversies today, just because it rose $2.40 to close Comex at $1,429.30. The genuine resistance, the mark to beat, is $1,436; until gold beats that point, we are just waiting for a resolution. Downside $1,423.50 is holding, so far, and must hold (aww, it could slip to $1,418, but it would make me awfully nail-bitey). Above, gold proves it has broken out upside, confirms beyond all gainsaying, when it closes 2% above the January high, i.e., $1,451.

Range-bound markets will kill your patience faster than waiting for the commercials to end in an episode of 24.

The SILVER PRICE gained 39c on Comex, ending at 3604.3c, but that no more than re-stated what silver had already tucked under its belt in yesterday's aftermarket.

On the five day chart silver has built a long needle-nosed triangle, which could resolve up or down. Overhead silver's big resistance is 3650, and holding it up below is 3550 (today's low fell on 3560c). It's very hard to parse action like this, let alone forecast from it. All depends on which direction it breaks out of this range.

Crazy as it sounds, silver can continue to move higher, to 4000c anyway, gigantically overbought as it may be. The GOLD/SILVER RATIO is bumping along at the low, today 39.655 at Comex close. But there is no sign of a silver turndown yet. No indicator I can point to and exclaim, "There she blows!"

And a trend in force remains in force until it is violated.

US DOLLAR INDEX bounced yesterday, I note, off an uptrend support line that reaches back to the 2009 low. Thus some bounce is logical, almost obligatory, but not meaningful unless the dollar IMPROVES it, confirming by rising through successively higher resistance levels. Right now, that first gate stands at 77. Today the dollar index fell back 8 basis points (0.10%) to 76.719.

'Tis a great mystery to me today when I gaze upon the Euro chart and see a down-gap left yesterday. How did I miss that? Day before marked a clear key reversal (trade into new high ground with a lower close on the day), and confirmed by closing lower yesterday, and lower with a down-gap. Today did nothing toward repairing the wound.

What does that all import? That while we are wondering whether the dollar has bottomed or not, it’s mirror image, the euro, seems to have topped.

STOCKS today looked like rags hung out on a line to dry. Strong forces were selling, and the buying couldn't keep up, fight as it would. Dow dropped 1.29 points to 12,213.09 and S&P500 lost 1.8 points to 1,320.02, but those measly numbers tell no tale. You'll see that bragging about losing "only" 1.29 points today would be like a bald man coming out of a fight with Shawnees bragging about keeping his hair.

Hackles on my neck say stocks are about to go for a long downhill ski.

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

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

© 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.