Friday, April 29, 2011

The Entire Week's Trading had the Look of Past Silver and Gold Price Peaks

Gold Price Close Today : 1,556.00
Gold Price Close 21-Apr : 1,503.20
Change : 52.80 or 3.5%

Silver Price Close Today : 4858.4
Silver Price Close 21-Apr : 4606.2
Change : 252.20 or 5.5%

Gold Silver Ratio Today : 32.027
Gold Silver Ratio 21-Apr : 32.634
Change : -0.61 or -1.9%

Silver Gold Ratio : 0.03122
Silver Gold Ratio 21-Apr : 0.03064
Change : 0.00058 or 1.9%

Dow in Gold Dollars : $ 170.19
Dow in Gold Dollars 21-Apr : $ 171.98
Change : $ (1.79) or -1.0%

Dow in Gold Ounces : 8.233
Dow in Gold Ounces 21-Apr : 8.320
Change : -0.09 or -1.0%

Dow in Silver Ounces : 263.68
Dow in Silver Ounces 21-Apr : 271.50
Change : -7.83 or -2.9%

Dow Industrial : 12,810.54
Dow Industrial 21-Apr : 12,505.99
Change : 304.55 or 2.4%

S&P 500 : 1,363.61
S&P 500 21-Apr : 1,337.38
Change : 26.23 or 2.0%

US Dollar Index : 73.050
US Dollar Index 21-Apr : 74.096
Change : -1.046 or -1.4%

Platinum Price Close Today : 1,874.90
Platinum Price Close 21-Apr : 1,816.50
Change : 58.40 or 3.2%

Palladium Price Close Today : 794.45
Palladium Price Close 21-Apr : 768.85
Change : 25.60 or 3.3%

In my unmannerly haste and thoughtless last night I neglected to mention the poor tornado victims in Alabama, and urge y'all to pray for their relief. Our county borders on Alabama, and there were tornadoes all around us, even on the counties on either side of us.

I must apologize also that we were out of the office a large slice of today, attending a funeral not connected to the tornadoes, but just over in Alabama. Driving back into Tennessee every car on the four lane highway stopped and pulled over until the funeral procession passed. So did the men mowing their yards. If you want to know what kind of people live in Alabama, THAT kind of people.

Been rode so hard and put away so wet today I think my metaphor and simile tanks are plumb dry, but I'll try anyway.

What a week! After gobbling up 8.5% last week, SILVER chomped down another 5.5% this week, GOLD played catch-up with a 3.5% gain, and PLATINUM and PALLADIUM woke up, but something strange happened today. More later. Stocks gained this week, but not nearly as much as gold, while the Bernancubus torpedoed the dollar, which was not a good idea since it was already gunwales to the waterline. Alas, I ken not the wisdom of the mighty, and am such a rube that their cleverness appears to me only -- dare I reveal my own obtuseness in the face of their sophistication? -- garden variety stupidity,. Thus I grasp not how killing your own currency will help your economy. I told y'all I was obtuse.

The US DOLLAR INDEX today slowed its slide for the weekend. Today it lost only 7.1 basis points and came to rest on the ledge-lip of 73 at 73.05. Technically you must believe it is headed for 70.70 (2008 low) soon and 40 eventually, but WAIT! Remember that all currency exchange rates are played with by central bankers as wanton boys do play with flies. They love nothing better than to seduce a market all in one direction -- like all the dollar shorts/euro longs right now -- then reverse their field to punish all the trend followers. Oh, and to make the world fear them and believe they are doing something. Well, they ARE doing something, namely, what they are supposed to be doing: managing inflation expectations, so that the whole herd runneth not out of their phony money at the same time. Euro made another new high today, right now at 1.4807, but closed lower. After six days rising, that might not mean much, but could be a key reversal. Yen rose again, to Y81.19/$ (123.17c/Y100).

Stocks rose today. Dow added 47.23 to close at 12,810.54 and the S&P followed along, gaining 3.13 to 1363.61. Note, I beg, that despite these gains, stocks fell against silver and gold. I keep telling y'all that because I know your ears are dinned by all the mainstream, conventional, degreed, accredited, certified, MBA'd, polished, suited, and universally admired advisors, brokers, and media pundits. They all keep touting stocks for the same reason the man who owns the liquor store keeps that neon light in his window: he is selling his product. Or, look at it this way: when all you have is a hammer, everything looks like a nail. They have no screwdriver, no impact wrench, no saw, no Gorilla glue, no tacks, just the hammer of stocks. And with astonishing, nay, breathtaking ignorance they recommend you buy stocks even though STOCKS REMAIN IN A PRIMARY DOWN TREND. Besides, I've learned something in nearly 64 years: those who do not know talk, those who know, do, and talk not. Search out the fellow who is succeeding, never mind how spiffy he dresses and talks, and watch him. You might learn something. Fact is, nowadays when folks start flashing them degrees at me, I just yawn and look for a better game. They have all been taught to think, all right, but all wrong.

The GOLD PRICE today took off and by the time they were turning the key to lock Comex's doors, the gold price had risen a massive $25.20 to close at $1,556. No laggard, the SILVER PRICE rose 106.4c to 4858.4c at closing, yielding a gold/silver ratio of 32.027.

Then something very odd happened. The silver price was rocking along about 4850c -- after Comex closed, maybe 1:30 or 2:00 our time -- when suddenly it lost about 70 cents, to 4750. Fell clean through a trap door, and took the ratio to 32.655. No news story precipitated that, and at the same time the gold price ROSE, to $1,565-ish, as if somebody were doing a MASSIVE silver to gold swap all at once.

For silver that is lousy behavior, worse coming on the heels of this week's volatility. It certainly poses the first half of a key reversal, and it's up to silver to disprove that on Monday. Between silver and gold the entire week's trading had the look of past silver and gold peaks. Monday saw a new intraday high in the silver price -- 4982c -- and a new high closing ratio (31.99) -- but a 218c decline from high to low, even though Comex Monday closed higher than the previous trading day.

This hot and cold indecision may arise from nothing more than all the radiation pouring off the old 5000c high as the silver price braces itself to breach that barrier. But mayhap also it is that faltering and fluttering often seen at tops, like a baby bird flopping on the ground, trying to get back up in the air but out of strength. Today's unexplained silver price fainting spell doesn't build confidence. Just ask Dale Carnegie.

But mercy! What would have to happen to reverse silver? The 20 day moving average, tripwire of a decline, stands at 4286c, some five bucks below current price. And the silver price must break that line to turn down. Everything else I have said is mere suspicion and anticipation. Well, I will add that the silver price is more oversold than Barack Obama in 2008, and gold nearly so badly. But "oversold" can persist a long time (in some cases 4 years).

Mainly the ratio's action sets the inside of my head to itching. A new low, then a sudden rise (33.002 on 27 April), when it hasn't been doing that. And there's that parabola on silver's chart. All this implies that the road ahead is washed out someplace.

Here are some brackets: The gold price keeps on rallying as long as it closeth not under $1,505. 20 dma stands at 1,484, support at $1,445. Break that and it might reach $1,380. Upside you are looking now at $1,600 very soon, maybe higher.

The SILVER PRICE must not lose its grip on 4750c. Below that support shows up at 4400c, and the 20 dma at 4286c, then 3600c. I have no upside target for the silver price, and have not a clue how one might forecast same. Let's guess and say that of course 5000c, the 1980 high, will be tough to break. But what if silver breaks through? What then? A ratio at 28:1? Possible, I reckon, but can that happen without SOME reaction first?

Y'all enjoy your weekend.

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.