Tuesday, October 04, 2011

Be Patient, Keep Watching for Your Opportunity to Buy More Silver and Gold

Gold Price Close Today : 1614.70
Change : (41.30) or -2.5%

Silver Price Close Today : 29.795
Change : (0.955) or -3.1%

Gold Silver Ratio Today : 54.19
Change : 0.340 or 0.6%

Silver Gold Ratio Today : 0.01845
Change : -0.000116 or -0.6%

Platinum Price Close Today : 1480.00
Change : -32.00 or -2.1%

Palladium Price Close Today : 566.00
Change : -25.00 or -4.2%

S&P 500 : 1,123.95
Change : 24.72 or 2.2%

Dow In GOLD$ : $138.38
Change : $ 5.38 or 4.0%

Dow in GOLD oz : 6.694
Change : 0.260 or 4.0%

Dow in SILVER oz : 362.77
Change : 16.26 or 4.7%

Dow Industrial : 10,808.71
Change : 153.41 or 1.4%

US Dollar Index : 79.60
Change : 0.166 or 0.2%

'Twas a pretty strange day in SILVER and GOLD. Pretty strange.

'Twas even strange in stocks.

Stocks stayed underwater all day, never even bobbing above the surface for one second, until the last 30 minutes when they raced up from 10,411 to end the day at 10,808.71, up 153.41 or 1.44%. S&P rose 24.72 to 1,123.95 (up 2.25%).

Sure, there were lots of reasons that rally makes sense. Moody downgraded the Italian government's credit rating today three notches to A2 while Greeks are striking, and Greek gov't. now admits it can't meet the Troika's demands and so will not get its bail out money on 13 October. Meanwhile, Bernard O'Bama is scooting around the country selling his snake-oil stimulus, building more four lane roads to nowhere.

Truth is, only reason I can find on the bounce is technical. There's a downtrend line parallel to the bottom line of the Jaws of Death top, a line going back to January 2011 and running thru the March 2011 bottom. It will likely bounce, then gravity will take over again and pull it down toward the 2010 low at 9,614. That, of course, will only BEGIN the plunge, but stocks will briefly rally from a low somewhere near there.

The Dow Industrials and Dow Transports have now both made new lows for the year. That's a Dow Theory signal that the trend has turned down, and offers as much comfort to stocks as a bed of needles and a can of pepper spray offers a naked man with hives.

STOCKS -- the cosmic scheme to defenestrate your retirement.

The US DOLLAR index is trading now at 79.597, up 16.6 basis points or 0.21%. It long ago left behind a 38.2% correction of its May 2010 to May 2011 fall. That milestone was left behind at 78.64. Next big mark is the 50% correction point at 80.58, then the 61.8% at 82.52. Did y'all notice that ALL those likely targets are ABOVE today's price, far above?

Deflation scare is coming. Y'all brace yourselves, the hogwash will flow in tidal waves.

Euro today rose 0.68% to close at 1.3252. Remains to be shown that yesterday really constituted a bottom. Yen continues to temporize sideways, neither moving up nor down. Closed today down -0.31% at 130.17c/Y100 (Y76.82/$1).

What strange thing happened in SILVER and GOLD? Both fell off sharply from yesterday $1,655 close to $1,600 - $1,610. After the Comex close of $1,614.70, down $41.30, the GOLD PRICE trailed off then about 3:00 plunged to $1,595. Plunged, then immediately shot right back up over US$1,626. Blinked your eyes and you missed it.

The SILVER PRICE acted the same way, plunging to a sudden 3:00 low at 2865c, then rising to 3020c. However, it has since backed off to 3006c.

Think about this: the SILVER PRICE traded on a 264c spread between high and low today, 9.2%. Rough to trade that. The GOLD PRICE posted a 5.1% high-low range.

Today's aftermarket action has the flavor of a key reversal, breaking into new low territory and climbing higher. The SILVER PRICE broke below its 2950c range, but then at once scrambled back into it. That makes that 2950 look stronger, but pushes the support down to 2865c. For gold and silver, today might be nothing more than the first move down of a new downleg.

Be patient, keep watching for your opportunity to buy more SILVER and GOLD. Keep watching for your chance to swap gold for silver at 57.5:1 or better (Comex closed 54.194 today). Stay away from stocks AND armadillos, because they carry leprosy -- the armadillos, that is. Don't spit on the sidewalk, wear your seatbelt, wash your hands every 3 minutes, and follow all the rest of the government rules that are BOUND to bring you satisfied happiness.

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.

Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.