Thursday, October 20, 2011

The Gold Price Broke Down Nearly Touching The 150 Day Moving Average Closing at $1,611.90

Gold Price Close Today : 1611.90
Change : (34.10) or -2.1%

Silver Price Close Today : 3026
Change : 98.6 cents or -3.2%

Gold Silver Ratio Today : 53.27
Change : 0.590 or 1.1%

Silver Gold Ratio Today : 0.01877
Change : -0.000210 or -1.1%

Platinum Price Close Today : 1499.00
Change : -12.50 or -0.8%

Palladium Price Close Today : 589.00
Change : -13.70 or -2.3%

S&P 500 : 1,215.39
Change : 5.51 or 0.5%

Dow In GOLD$ : $148.02
Change : $ 3.55 or 2.5%

Dow in GOLD oz : 7.160
Change : 0.172 or 2.5%

Dow in SILVER oz : 381.42
Change : 13.23 or 3.6%

Dow Industrial : 11,541.78
Change : 37.16 or 0.3%

US Dollar Index : 77.19
Change : 0.073 or 0.1%

The GOLD PRICE has broken down out of that pennant formation and will trade lower. Today it made a low at $1,603.91, nearly touching the 150 day moving average at $1,602.50. Sturdy confidence that ain't.

Now throughout this bull market that 150 DMA has backstopped -- generally -- gold. But against that optimism look at the MACD indicator, which is turning down, nosing after lower prices.

If the GOLD PRICE breaks $1,600, it will certainly think about dropping back to the $1,535 last low, or the 200 DMA at $1,547. And if the Eurocrats come up with some plausible face-paint, gold would take a hit on Monday. On the other hand, if they only meet, eat, dither, and retreat, gold will gain.

Seems to me politics absorbs way too much of our time. Adults ought to spend their time more profitably than wondering what a bunch of bootlicking banklackies will do.

The SILVER PRICE is in the same position as the GOLD PRICE, only more volatile. On Comex today SILVER lost 98.6c (3.15%) to close at 3026c. In the aftermarket it quickly gained 37c (1.22%) to 3063c. Mercy! How do you parse or trade that? Silver reached 2994 today after losing its grip on 3050c support, but then jumped back pretty quickly. NEVERTHELESS, that doesn’t look like it has cleared 3050c resistance (support becomes resistance when you approach it from underneath), just silver trading up in a thin aftermarket.

Breaking 3000c will send silver down a buck anyway, arguing for much lower prices.

Listen, y'all, look at the world around you and take a deep breath. Spit out that central bank ether and think: have any of the fundamental drivers of inflation and the silver and gold bull market changed? No, so the bull market continues, we are just suffering through a correction. Keep calm, silver and gold will come roaring back.

Chart for the Dow today looked like a video of somebody kicking an old tin funnel down a road -- up, down, everywhere. Confusion reigns. Dow added a massive 37.16 (.32%) to close at 11,541.78 while the S&P500 added 5.51 (0.46%) to end at 1,215.39. Other indices fell, revealing their confusion and bewilderment.

Some guru on the internet said stocks rose on optimism the Euro summit this weekend would arrive at a solution for the bank solvency crisis there. Right, but how'd he know that? How'd he know for sure it wasn't stray dogs or indigestion?

From a technical perspective, stocks are still stymied by 11,650 resistance, optimism, stray dogs, or indigestion.,

DOLLAR INDEX rose slightly today, I reckon because the folks trading that market had no optimism about this weekend. (What kind of sorry people get optimism from a politicians' meeting, anyway?) Dollar index rose a tiny 7.8 basis points (0.18%) to 77.192.

The euro remains trapped below the bottom boundary of its trading channel, the one it fell out of in September. Nothing's going to happen until the politicians do something, and the chance of them doing something more than cosmetic is the same as the chance an undertaker has of raising a corpse from the dead after he pretties it up. Closed 137.77c, up 0.15%. Japanese yen remains paralyzed, up 0.2% to 130.23c/Y100 (Y76.79/$1).

The dollar's little piddling rise and other phantasms do not account for gold's fall today, down 34.10 (2.1%) to $1,611.90. Nor does it account for gold's aftermarket rise to $1,622.40. Saw the same thing in the silver market and moreso, which makes me think dealers are shorting throughout the day, then covering at day's end.

Life has a way of taking matters out of your hands. Shorthanded in the office today, Susan gone to New Albany to pick up the newsletters, and I had to go to a funeral. Can't put a funeral off.

I'm taking this opportunity to say Bye-Bye to y'all, just in case Harold Egbert Camping proves right and the world does end tomorrow. Now, I'm not really counting on that being the last day, since Camping also prophesied that the world would end on 21 May 1988, 6 September 1994, and 21 May 2011, without noticeable success. Since 21 May he has been spiritualizing away the failure, and he had a stroke.

Frankly, I'm counting on being right here tomorrow, about this time, doing what I always do, and wondering, as always, why some people do the silly things they do.

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 bubble has burst, primary trend down.

WARNING AND DISCLAIMER. 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 short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.