Thursday, June 09, 2011

Tomorrow may See a Little Higher Close Before this Gold Price Rally-ette Ends

Gold Price Close Today : 1542.10
Change : 4.00 or 0.3%

Silver Price Close Today : 37.423
Change : 0.804 or 2.2%

Gold Silver Ratio Today : 41.21
Change : -0.796 or -1.9%

Silver Gold Ratio Today : 0.02427
Change : 0.000460 or 1.9%

Platinum Price Close Today : 1841.80
Change : 20.20 or 1.1%

Palladium Price Close Today : 815.50
Change : 11.00 or 1.4%

S&P 500 : 1,289.23
Change : 9.67 or 0.8%

Dow In GOLD$ : $162.57
Change : $ 0.65 or 0.4%

Dow in GOLD oz : 7.864
Change : 0.032 or 0.4%

Dow in SILVER oz : 324.07
Change : -4.96 or -1.5%

Dow Industrial : 12,127.76
Change : 78.82 or 0.7%

US Dollar Index : 74.15
Change : 0.222 or 0.3%

Thirsting with curiosity, I went back to my own tediously hand-kept charts and looked at that Dow in Gold Dollars and there the breakdown is even more pronounced than on charts I find on the Internet, mine being close-only charts. Mayhap not today or tomorrow or even the third day, but soon, yes, soon, stocks will be walking along smiling and suddenly step into a mine shaft leading to the earth's core.

Today stocks reacted from yesterday's lows near 12,020, climbing to reach 12,183. Digestive juices failed, however, to cope with such a large dinner and by closing time the Dow had gobbled only 78.82 points (0.65%) to close 12,127.76. S&P500 gained 0.76% (9.67) to 1,289.23.

Five day chart sports a sort of head-and-shoulderish look, with the head yesterday and the neckline around today's high, 12080. If so the Dow will trade down tomorrow to 12,090, the rise to about 12,320 before it runs out of diesel. Lo, this ain't no big deal; stocks have been dropping six days running. Even a blind hog finds an acorn every now and then.

Stocks' trend remains down, and before anyone can even WHISPER about a trend change they would have to breach the 20 day moving average at 12,378.

Stocks -- they are the cold, wet washrags in the Investment Chest of Medications for Financial Pneumonia.

Somehow talking about the US dollar index always leaves me feeling like after I've been cleaning up dog snot. You know you got it all off, you washed your hands twice with soap, but you still feel defiled anyway.

Ahh, to the task! Today that scrofulous dollar index reached 73.92 or so and simply leapt straight up. I don't know where it stole the 7-League Boots, but it cleared 74 resistance at a single bound and reached 74.30. I didn't see any news items that might have grounded that, but then, I refuse to look for news items because I read them all in the chart at day's end. No point in keeping up with them because two days later they're no longer news, and if the news came from the government it was lies anyway.

Sorry -- my bile is spilling out there. Back to the dollar. This Great Leap Upward came right on the New York open, and never even kissed back to 74. Trading right now at 74.152, up 22.2 basis points or 0.29%. Personally I am not inclined to trust any dollar turnaround here. More likely 'twill touch back to the last low around 72.95 before it turns. Momentum indicators are either double-tongued or down.

GOLD'S friends who live just above $1,530 all crawled out today and bought and bought with both hands. It was enough enthusiasm to drive the Sun's Tears up to $1,545.30. Comex gold gained $4.00 top $1,542.10.

This makes a handsome spike on the chart, but changes nothing; it couldn't better $1,550 or $1,553. Tomorrow may see a little higher close before this rally-ette ends, but I expect a downside resolution. Any close above $1,463.20 would slay my expectation.

The SILVER PRICE beat at the 3740c ceiling and broke thru. It rose steadily and sharply all day, reaching a high of 3757c. Comex close backed off only a little to 3742.3c, up 80.4. This rise has another day to run at least, maybe two.

Yet before y'all's enthusiasm waxes too extreme, bear in mind that silver lies not far above its 20 DMA (3619c) and far below its 50 DMA (3925c). Stout resistance awaits at 3850c, where the last two rally attempts died.

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.