Monday, May 09, 2011

The Silver Price Rallied off Friday's $33.15 Low as High as $38.00

Gold Price Close Today : 1502.90
Change : 11.70 or 0.8%

Silver Price Close Today : 37.110
Change : $ 1.827 or 5.2%

Gold Silver Ratio Today : 40.50
Change : -1.765 or -4.2%

Silver Gold Ratio Today : 0.02469
Change : 0.001031 or 4.4%

Platinum Price Close Today : 1794.00
Change : 17.00 or 1.0%

Palladium Price Close Today : 730.50
Change : 24.40 or 3.5%

S&P 500 : 1,346.29
Change : 6.09 or 0.5%

Dow In GOLD$ : $174.47
Change : $ (0.71) or -0.4%

Dow in GOLD oz : 8.440
Change : -0.035 or -0.4%

Dow in SILVER oz : 341.81
Change : -16.40 or -4.6%

Dow Industrial : 12,684.68
Change : 45.94 or 0.4%

US Dollar Index : 74.68
Change : 0.028 or 0.0%

Looking at my charts and past data this morning, it's difficult to avoid the conclusion that the SILVER PRICE has more downside in store. The GOLD PRICE might have made all the correction it intends to make, but that, too, is uncertain. Earlier corrections after Gold/Silver Ratio lows have taken gold down from 4% to 12%. The first we have seen already, and 12% would take us to $1,370. These are possibilities, not predictions.

The Silver Price rallied off Friday's $33.15 low as high as $38.00, but couldn't pierce that barrier. On Comex silver added $1.827 to close at $37.11, up a gigantic 5.2% but in the aftermarket it added another 81c to reach a price 7.5% higher than Friday's. Sharp rises are followed by sharp falls, and often then by sharp but truncated rises in turn. Here we must balance jumping in too soon against missing our chance, a prickly mess. For now my eyes are turned longingly toward the 200 day moving average (now $28.48), so often the target of silver's corrections in this bull market. Before we see that, however, we might see a rally that jumps as high as $42.00, and it might consume quite a bit of time. I don't believe silver is ready to take the bit in its teeth and run away upside quite yet. Give it time.

GOLD on Comex re-captured $11.70 to close at $1,502.90. Clearly lots of folks were looking to visit the bargain basement gold sale, but in the aftermarket, after a $10+ rise, gold stalled around $1,513 and fell back a couple of bucks. $1,510 forms the resistance that is bogging gold down, and above that $1,520 will suck at gold's feet like quicksand. Clearly, then, a close above $1,520 would send gold higher.

Downside remember that $1,462 low. If the gold price breaks that then it will have to do more penance, maybe on its knees.

Keep calm, it is only a correction in an on-going bull market (primary trend) with another three to ten years to run. As you ought not to have succumbed to the hysteria on the upside, you must not succumb to the despair on the downside. Wait. Compose yourself in patience.

Today taught a lesson to all those who arrogantly believe parsing markets is easy.

The US DOLLAR INDEX hit a high today at 75.16, but that was one step too far for a fiat currency that had already run so hard. That completed the move and the rest of the day the dollar backed off and ended at 74.68, up a meager 2.8 basis points from yesterday. It's a correction, folks, ricocheting in its upward flight off the 50 DMA. Least target for rally reaches 77.40. Buttressing that conclusion is the Euro, collapsing like the Tsarist army at Tannenberg. Yen is sprightlier, but looks like it has played out its upmove as well.

What happened about 11:45? Something to send stocks, which had languished till then, a-soaring. McHugh of, whom I respect, expects one more leg up before the bear resumes his doomed and dreaded mauling.

Dow gained 45.94 to 12,684, S&P500 added 6.09 to end at 1,346.29. This is cloud-cuckoo land, for tis a bear market (primary downtrend lasting 15 - 20 years that began in 2000) and no economic reason appears to imply improving conditions in an economy gutted by central banks, banks, speculation, debt, and exported industry and agriculture.

But y'all hold on to your stocks -- they'll make interesting keepsakes for your grandchildren, and who knows, by that time they may have begun recovering.

I have thirteen grandchildren: twelve boys and a single girl, Caroline, Justin and Ellen's daughter. Five months after she was born (July 2007) her illness revealed a malformed heart. After three miraculous surgeries at Vanderbilt in Nashville, where children's heart surgery was pioneered beginning in the 1940s, she has a rebuilt and efficient heart. She plumped up and is as active as any four year old.

But today she was out shopping with her mother and grandmother and fainted. Why, no one can say, but her doctors at Vanderbilt wanted to see her, so Justin and Ellen have taken her up there tonight.

Would y'all please pray for Caroline's complete recovery? I know she is spectacularly beloved because we've seen so many miracles in her life already.

On this day in 1913 the 17th amendment to the US constitution was ratified. It provided for electing senators by popular vote rather than by state legislatures, thus depriving states of their representation and converting a federated republic into a democracy. Yes, it did indeed mean that much.

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.