Tuesday, October 18, 2011

The Gold Price Fell Down Out of a Flat Topped Rising Triangle Today, Did the Gold Price Turn Down?

Gold Price Close Today : 1651.70
Change : (23.80) or -1.4%

Silver Price Close Today : 3180.1
Change : 1.0 cent or 0.0%

Gold Silver Ratio Today : 51.94
Change : -0.765 or -1.5%

Silver Gold Ratio Today : 0.01925
Change : 0.000279 or 1.5%

Platinum Price Close Today : 1539.50
Change : -16.00 or -1.0%

Palladium Price Close Today : 624.15
Change : 6.85 or 1.1%

S&P 500 : 1,225.31
Change : 24.45 or 2.0%

Dow In GOLD$ : $144.89
Change : $ 4.29 or 3.1%

Dow in GOLD oz : 7.009
Change : 0.208 or 3.1%

Dow in SILVER oz : 364.04
Change : 5.54 or 1.5%

Dow Industrial : 11,576.82
Change : 179.82 or 1.6%

US Dollar Index : 77.00
Change : -0.062 or -0.1%

Today the GOLD PRICE opened down over $40, bottomed about 10:00 a.m. at $1,626.75, then stubbornly climbed the rest of the day to recover half that loss. Comex found it down only $23.80 at $1,651.70.

I just want to point out to y'all that you can do worse than what the engineers do, namely, just deal with the facts. It removes most of the guesswork. Call it what it is: the GOLD PRICE reached $1,695 on Monday, then hit $1,626.75 today, and closed beneath $1,655 support. That's a down trend, often beaten in the neighborhood of $1,680.

Here's where it gets tricky: does it really mean what it says? If you were building a bridge, it would, but markets have that human tendency to blow hot and cold out of both sides of their mouth. Sometimes they break down or up, but only for one day, then reverse the next and break out and follow through the opposite direction! The GOLD PRICE had been building a flat-topped rising triangle. Usually that breaks out upwards, but gold fell down out of it today. Did gold turn down? MACD is losing its enthusiasm. Probably did, and 'twill make a trip home to the 150 dma ($1,599) soon, but closing tomorrow above $1,695 would gainsay that course.

I remember a few days ago when the SILVER PRICE closed up one cent and gold dropped several dollars, then jumped up next day. Well, here we go again, but which way? Silver shuttered Comex at 3180.1c, up one cent. During the day it dropped as low at 3046c, but defended that level and rose again out of the mirey pit to close well above 3100c at 3180.1c.

Facts: The SILVER PRICE must climb above, and remain above, 3250c to change the diagnosis from downtrend to uptrend. Silver, too fell out of its rising flat-topped triangle today, but remains in the range of 2843c to 3310c that has held it captive since September. Unless SILVER and GOLD showed false breakouts today, they will follow through tomorrow with lower prices.

All this back and forth betrays great bewilderment and confusion in SILVER and GOLD. Blame lies largely with the European crisis and the Eurocrats dawdling and diddling and pitty-patting at the problem. Markets hate indecision.

Stocks knee-jerked higher today on a report of a $2 trillion fix of the European sovereign debt crisis. Later it turned out the report didn't report that at all, only that Euro-crats had worked out a deal to make sure this doesn't happen again (count on THAT) by banning short sales of Credit Default Swaps and maybe bank stocks, and who knows, maybe striped stockings, too.

Let us never forget, as we listen to the parrots on TV and Radio and the actors in politics and central banks, that there is NO sovereign debt crisis in Greece or Europe, just as there was NO mortgage debt crisis in the US. There is a BANK SOLVENCY CRISIS, and all this circles around saving the banks, not countries or homeowners. homeowners. The greedy banks - abetted by lap-dog governments - dug themselves into a hole, and now by means of their bought-and-paid-for politicians, they want to hand a shovel to taxpayers so they can fill it up. Debt crisis, my eye! It's a BANK crisis, of, by, and for the banks, Euro and US.

Anyhow, Sarcophagus in France is whining and moaning about Europe breaking up, theatrics in preparation for this weekend's Euro-summit. He has to give Ferkel some cover for her selling the Germans down the river, since the German voter has not yet been successfully enlightened to the glory of bailing out banks or other countries, shameful troglodyte he is.

At the bottom line, the Euro-crats have no deal yet, but they are barking for one strongly. Ain't y'all impressed?

Lo, stocks opened the day dragging their itty feet, but about 10:30 picked up and surged toward's day's end. This handsome performance brings them up to only about 75 points below Friday and about 125 points below that death-dealing, I'll-raise-a-punk-knot-on-top-of-yore-head 11,700 resistance.

Dow rose 179.82 points today, 1.58%, to 11,576.82. S&P500 also climbed 24.45, up 2.04%, to 1,225.31.

Not clear yet that stocks can continue to rally, or for that matter have even started rallying, but they might. Need a close above 200 day moving average (now 11,967) to prove it, otherwise they're just pikers shaking dice and trying to rope you into their game. My rule is, never shoot craps with any man who pulls his own dice out of his pocket.

Here late in the day the US dollar index, which had traded as high as 77.52 then taken a beating down to 76.80, is now trading 77.084, down a negligible 6.2 basis points (0.08%). Looks to me like the dollar made a double bottom Friday and Monday around 76.50, but who listens to me? I'm just a natural born fool from Tennessee, and no match for them Wall Street jeen-youses.

For all the alleged good news perking out of Europe, the Franken-currency still rose only 0.18% to 137.66, trading back to fill the last gap it left. Probably will rise higher, although there is no reason in the world it ought to, other than moirchandizing.

The Yen took the sidling path, losing 0.05% to 130.13c/Y100 (Y76.85/$1). No change, still range bound and flying heavy like an old hawk with a fat rabbit.

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.