Thursday, October 13, 2011

Gold Price Moving Average Convergence Divergence (MACD) Is Calling For Higher Prices, Comex Closed at $1,667.30

Gold Price Close Today : 1667.30
Change : (14.00) or -0.8%

Silver Price Close Today : 31.633
Change : (1.121) or -3.4%

Gold Silver Ratio Today : 52.71
Change : 1.376 or 2.7%

Silver Gold Ratio Today : 0.01897
Change : -0.000509 or -2.6%

Platinum Price Close Today : 1540.00
Change : -15.00 or -1.0%

Palladium Price Close Today : 597.00
Change : -15.00 or -2.5%

S&P 500 : 1,203.66
Change : -3.59 or -0.3%

Dow In GOLD$ : $142.31
Change : $ 0.70 or 0.5%

Dow in GOLD oz : 6.884
Change : 0.034 or 0.5%

Dow in SILVER oz : 362.85
Change : 11.18 or 3.2%

Dow Industrial : 11,478.13
Change : -40.72 or -0.4%

US Dollar Index : 76.97
Change : -0.022 or 0.0%

Today, once again, the GOLD PRICE failed to break through $1,675 - $1,680. It's narrowed its range some, and twice defended a $1,655 low. And today's high at $1,681.50 climbed a little higher than Monday's, but that's not breaking through resistance. That's failing. I expect tomorrow will show lower prices, and a lot lower if gold breaks $1,653. On the topside, watch $1,680 resistance. Moving Average Convergence Divergence (MACD) is calling for higher gold.

On the Comex today, where the black shirts take no prisoners, gold dropped $14 to close at $1,667.30.

The SILVER PRICE chart resembles the GOLD PRICE chart only a little wilder. 3300c resistance has again corralled and hogtied silver. The SILVER PRICE never fell below 3144.4c, but by the time they rang that Comex bell, it has lost 112.1c to 3163.3c. Whole day was one long decline.

Maybe SILVER and GOLD are carving out new trading ranges, $1,650 to $1,682 and 3140c to 3300c. Maybe, but if they fall below those levels, we face more frustrating range trading or new lows.

What might happen if my interpretation of SILVER and GOLD right now is all wrong? What if they've already bottomed, and I've launched myself on another fool's errand, waiting for 'em to drop a little lower?

Might be. We'll know that for sure if the GOLD PRICE trades above $1,800 and stays. The SILVER PRICE is so volatile that I don't want to set any target there, just use gold as a trigger.

Why am I thinking this way? The Long Run came last night to mind. I hear The Media Mighty saying Gold's career is most likely over, and Silver's most surely, and I scratch my head. Folks don't talk that way at market tops, when you can't find a doubter with a telescope, microscope, and Geiger counter. Nor have silver and gold even matched by a third the last bull market's performance. Nor have any of the causes boosting SILVER and GOLD changed. Have any of y'all heard the Federal Reserve will be abolished? That the yankee government will stop trying to run the economy and stop waging wars around the world to make everybody nice like us? Naww, y'all haven't heard any of that, so none of the causes have changed.

Thus I confess I am playing a perilous game, holding out for lower prices -- lower by a few percentage points, even 15%, when I expect silver and gold to treble or quadruple from here. But for all that, markets have been teaching me for years -- with a barbed wire whip to make the lesson sink in -- that sometimes patience and waiting prove wisest.

But y'all need not feel obliged to copy my bad, natural-born- fool example. You might decide, with good reason, that you'd rather trust SILVER or GOLD than to leave you money in those Mothers of All Monetary Mischief and Larceny, the banks. I won't gainsay you a minute.

Did y'all ever notice how little it takes to strip away your veneer of civilization? For me, a rainy autumn day with the wild wet smell of Tennessee woods works just as well as a sunny spring day. If they didn't chain my ankle to this computer, I'd be as scarce around here as Big Foot. I'd run wild in the woods, eat hickory nuts, and drink from the creeks, but here I am so let's talk about markets. (Don't even talk about playing bag pipes or banjo music. Do that, and I'll break the chain.)

Mercy, you'd be in a mess if you had to trade currencies for a living. Today the Franken-currency is trading as I write at 1.3784, down a gigantic 0.01. That doesn't quite paint the picture, though, because it spent most of its day lower, low as 1.3685. Now maybe it was just filling that gap it left two days ago, or maybe its bouncing off that lower boundary of the range whence it broke down. Either way, y'all can HAVE my helping of the euro. I can't abide the taste of it.

Yen barely traded today, but last traded at 130.13c/Y100 (Y76.85/$1), up 0.53% and almost enough to read on the chart that it moved.

US DOLLAR INDEX today sidled between 77.433 and 76.843. Can't argue that 77.40 slapped its

jaws, but not too bad. Dollar's holding tight to 77, but as I've been saying, even if it slides to 76, it has in mind to climb above 80. That may take a while to unfold, but it will come. Only a bad fall below 76 would change my mind.

Mercy! 'Tis awfully easy to let your eyes slip off the horizon and let today's events cloud your mind. The air of unthreatened calm that hangs over us here is a falsehood. I reckon we're like men working in a TNT factory: everything's all right until some fool strikes a match. Tomorrow I'm going to send y'all some suggestions for securing a little more peace of mind.

STOCKS spent the day contradicting themselves. The Nasdaq and Nasdaq 100 rose, while the senior indices fell. Pattern of trading was altogether different. Nasdaq and N-100 fiddled, then about 11:30 took off upside and gained most of the day. Dow and S&P500 stayed underwater all day, and only drew nigh the surface near day's end.

Dow closed at 11,478.13, down 40.75 or 0.35%. S&P 500 lost 3.59 (0.3%) to 1,203.66.

I know lots of folks are singing that the Dow will rally from here, and it may, but it's having a hard time crawling out of the congestion area posted since the August waterfall.

STOCKS -- they are the iron life-jacket Wall Street throws to Main Street, drowning in confusion.

Y'all won't believe this, but I was working at home today and got a phone call from Nielsen, the company that tracks TV viewership. Nice lady asked me how much TV I watched and I said -- nicely, now -- I said there wasn't anything I wanted to watch. She asked if she could send me a notebook to track my TV watching for a week, and I said, sure, if it's got asbestos pages and you don't mind my writing down what I really think, minus the cusswords. She was very sweet, but those folks have no idea who they're messing with.

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.

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.