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Monday, January 31, 2011

Gold Price Traded Down From Friday's High to Close at $1,333.80

Gold Price Close Today : 1333.80
Change : (6.90) or -0.5%

Silver Price Close Today : 28.174
Change : 0.240 cents or 0.9%

Gold Silver Ratio Today : 47.34
Change : -0.654 or -1.4%

Silver Gold Ratio Today : 0.02112
Change : 0.000288 or 1.4%

Platinum Price Close Today : 1788.80
Change : -3.60 or -0.2%

Palladium Price Close Today : 813.65
Change : 1.15 or 0.1%

S&P 500 : 1,286.12
Change : 9.78 or 0.8%

Dow In GOLD$ : $184.31
Change : $ 2.02 or 1.1%

Dow in GOLD oz : 8.916
Change : 0.098 or 1.1%

Dow in SILVER oz : 422.09
Change : 2.39 or 0.6%

Dow Industrial : 11,891.93
Change : 68.23 or 0.6%

US Dollar Index : 77.74
Change : -0.504 or -0.6%

Over the weekend the GOLD PRICE traded down from Friday's $1,345+ high. While Europe had it, gold eroded from 1338 to $1,325. New York Open took it up over $1,330, but just as quickly it slammed back down to $1,323. A long rise followed from 9:30 to 1:00 p.m. EST to $1,337, but gold fell again to $1,333.80, down $6.90, when Comex closed at 1:30. Balance of the day was sideways.

Bottom line here is that Gold reacted today against Friday's rise, no surprise, and has since Wednesday formed a clear upside-down head and shoulders, which usually leads to higher prices. Gold would smash the meaning out of that formation if it closes below $1,325, and signal lower prices to come.

Let us watch, though, and see whether Gold can clear $1,360.

The SILVER PRICE let go of nothing today and grabbed another 24c to close Comex at 2817.4c, clearly punching through 2800c resistance. Low today was 2752c, which was roughly the high on Wednesday and Thursday. Thus silver appears to have escaped gravity. Today's highs fell at 2844c.

On a longer term chart silver touched its 20 day moving average today (2820c), but, but, but the 20 dma closed BENEATH the 50 DMA (2867) four days ago, and that is NOT a bullish sign.

Just as SILVER and GOLD closed confused today, so am I. Over my shoulder I am looking for a surprise rally that might take metals up to new highs and the GOLD/SILVER RATIO to a new low. On the other hand, the charts before my eyes are mumbling and whispering about lower prices -- and the time elapsed since that 3 January high seems so short.

Well, I reckon if it was easy politicians and bankers would be doing it.

Markets never pass up a chance to humble and bewilder. Look at silver and gold today. Gold, which in the face of the Egyptian "crisis" should have risen, fell instead. Silver, which ought to have followed or been weaker than gold, rose. That famous safe-haven the US dollar fell, too -- hard.

A reader wrote asking me why I didn't mention the upheaval in Egypt as a cause of gold's rise on Friday. Mainly because I don't put much stock in so-called "safe haven" moves. If they run counter to the prevailing trend, they have no lasting effect. If they run with the trend, they only drive it a bit further. Either way, as soon as the crisis passes, the effect passes. Usually it's just noise to filter out.

Speaking of Egypt, do any of you mushrooms besides me entertain a tee-tiny doubt about the "spontaneity" of the uprising in Egypt? Does anybody with even a tenth of a brain left believe that a big, mean government that has held power 29 years by jailing and otherwise silencing its opponents can be overthrown by a bunch of hollering nerds on Twitter or Tweeter or Tweety-Bird or whatever it's called? Now think about that. Yes, yes, the Spirit Of Democracy rises up against the Tyrant, arm in arm in solidarity with the Easter Bunny and Tweety Bird. Hmmmm.

Friends, I am just a natural born durn fool from Tennessee, but even I suspect a set-up, more so when Bernard O'Bama and Handsome Hillary mumble about democracy, which looks so much like throwing Mubarak out of the rowboat that I can't tell the difference. Just to show that even a blind hog finds an acorn now and then, the execrable Franklin Roosevelt said, "Nothing happens by accident in politics. If it happened, somebody made it happen."

All that the US dollar index accomplished was to reach up and touch its 20 DMA at 78.22, then fall back. Today the dollar lost 50.4 basis points (0.65%) to end the day at 77.735, but during the day made a low at 77.55, slightly lower than Friday's 77.61.

The dollar index has now carved out for itself a new shelf of support at 77.60. Fall off that, and it will revisit 76. My bias still hints that the dollar will turn and rise, but my chief grounds for that is the dollar's long fall accompanied by madly optimistic silver and gold markets. The pendulum swings, so count on it, be it sooner or later.

On a five-day chart today's "advance" in the Dow, 68.23 points, looks like no advance at all. The gate looks firmly closed on the Dow at 11,900. Last two day's trading have dragged the Dow down to its 20 DMA (11,802.37) which might stop the fall, or might merely ring the first warning bell. I'll take that second. Dow closed at 11,891.93 and the S&P gained 9.78 to close at 1,286.12

I know the January rule for stocks, "As goes January so goes the year." If stocks gain from 31 December to 31 January, they supposedly will gain for the year. Well, ride that horse if you want 'til he falls dead beneath you, but I want no ride at all on stocks, thanks very much. Sorrow, woe, and grief lie that way. (Dec. 2010 Dow closed 11,573.42; today, 11,891.93.)

On this day in 1609 the Amsterdam Exchange Bank was founded. It accepted deposits of foreign coin and silver and gold bullion, and issued the depositors credits. By generally sound management as and exchange and warehouse, it managed to stay in business until the city took it over in 1790. Sooner or later, I reckon, all banks go bad.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Friday, January 28, 2011

Today the Gold Price Rallied, Does This Mark the End of the Correction?

Gold Price Close Today : 1,340.70
Gold Price Close 21-Jan : 1,341.00
Change : -0.30 or 0.0%

Silver Price Close Today : 2793.4
Silver Price Close 21-Jan : 2741.6
Change : 51.80 or 1.9%

Gold Silver Ratio Today : 48.00
Gold Silver Ratio 21-Jan : 48.91
Change : -0.92 or -1.9%

Silver Gold Ratio : 0.02084
Silver Gold Ratio 21-Jan : 0.02044
Change : 0.00039 or 1.9%

Dow in Gold Dollars : $ 182.31
Dow in Gold Dollars 21-Jan : $ 183.01
Change : $ (0.70) or -0.4%

Dow in Gold Ounces : 8.819
Dow in Gold Ounces 21-Jan : 8.853
Change : -0.03 or -0.4%

Dow in Silver Ounces : 423.27
Dow in Silver Ounces 21-Jan : 433.03
Change : -9.75 or -2.3%

Dow Industrial : 11,823.70
Dow Industrial 21-Jan : 11,871.84
Change : -48.14 or -0.4%

S&P 500 : 1,276.34
S&P 500 21-Jan : 1,283.35
Change : -7.01 or -0.5%

US Dollar Index : 78.135
US Dollar Index 21-Jan : 78.130
Change : 0.01 or 0.0%

Platinum Price Close Today : 1,792.40
Platinum Price Close 21-Jan : 1,826.50
Change : -34.10 or -1.9%

Palladium Price Close Today : 812.50
Palladium Price Close 21-Jan : 818.05
Change : -5.55 or -0.7%


The GOLD PRICE and SILVER PRICE place the most twisted riddle before us today. Did today's rally mark the end of the reaction, or merely a sharp reaction against the trend?

GOLD jumped a healthy $22.30 on Comex to close at $1,340.70. That was strong, that was tough, that was admirable, but that was not a close through $1,345 resistance. Therefore, today's close answereth not our riddle. The Williams %R indicator shows an extreme low, but that, too, speaketh with forked tongue. It might indicate a little rally, then a resumption of the downtrend. No answer there, either.

What about the low so far? $1,318.40, yesterday's close, nearly fits one of my targets, that $1,308 support. That's a clear "maybe."

I am trying to learn not to draw to inside straits, but to stick to the main chance. Gold must clear $1,345 and then $1,355 and $1,365 in short order to state clearly that it has finished dropping.

SILVER outshone gold today. The rise to 2800c (high at 2804c) cleared the last high at 2780. Still, the close came at 2793.4c, up a hefty 89.8c but still not ABOVE 2800c. I will leave the many metaphors to your imagination, but "not there" in the end means "not there." It either is or it ain't, and so far, it ain't.

Besides, this silver reaction doesn't meet my expectation either in time or price. Time should drag out another month or more, price drop further than what we have already seen, less than 15% from the peak. Just doesn't seem a sufficient tergiversation for volatile silver.

But lo! I am teachable, and chary of ever wedding myself to my own preconceptions. Still, it cleaveth to my mind the main chance is a silver jump not higher than 2860c (the 20 DMA), then a drop to lower lows.

Now arguing against lower lows are the RSI and MACD, which are hinting that the SILVER PRICE and the GOLD PRICE are ready to move up.

So in the end, I can't answer the riddle and can only wave one hand in the air and then the other. Next week will tell us.

Be not confused, neither be dismayed: the primary uptrend in silver and gold remains as robustly healthy as ever. You are witnessing a temporary correction after a long move up. The bull market is not even near a beginning of an end, much less the end.

Strange unto weird. Look at that board: gold within 70c of last week's close, US dollar index within half a basis point, and all else but silver and platinum are nearly unchanged.

DOLLAR INDEX gave today the first sign of breaking out of that falling wedge it has spent so long drawing. Dollar closed today up 40.8 basis points to 78.135, comfortably above 78 at least. Is it a breakout? If so, Monday it must rise again, and in fact ought also to rise for three days or more. Since the Yen fell today 0.68% and the Euro fell 0.69%, it looks like a short covering rally at least.

Behold: the rising dollar coincided with falling stocks and rising silver and gold. I do not interpret, I only observe. Maybe the riots in Islam land boosted gold today? But then, how do you explain silver rising further than gold today?

Dollar topped today at 78.28, so 78.30 and 78.40 are the marks to beat next week. A drop below 77.60 launches dollar into free-fall.

STOCKS took a hard beating with a white oak stick. They began the day looking poorly, then some lemming-like impulse sent investors running over the cliff. By noon the Dow had fallen to 11,805. Dow closed at 11,823.70, down 166.13 (1.4%) and the S&P500 lost 23.20 (1.8%) to close at 1,276.34.

Look at the chart. This was a waterfall, a severe break breathing panic and fear. As I have been repeating, and repeatedly been rebuked for repeating, the Dow has formed a fatal (read: deadly, tending to croak) rising wedge, which points AWAY from the direction it will break-out, a prolix way of saying that a rising wedge breaks out downward.

Stocks will continue to offer a wild, dangerous, and downward roller coaster ride in the Great Amusement Park of Investing. Keep off!

DOW IN GOLD DOLLARS hit a high this week at its last low, and it stands above the 200 day moving average. I think that was the top of the move, and 'twill descend from here.

On Friday, 4 February 2011 I will be speaking in Severn, Maryland for the Institute on the Constitution: "The Only Cure For The Economic Depression, and It Ain't From Washington, DC." For details, go to www.iotconline.com. If you make it, come up and introduce yourself. Admission is free but limited seating requires you register in advance.

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Thursday, January 27, 2011

Gold Price and Silver Price Continue to Fall, Both Metals Still In Primary Uptrend

Gold Price Close Today : 1318.40
Change : (14.60) or -1.1%

Silver Price Close Today : 27.045
Change : (0.087) cents or -0.3%

Gold Silver Ratio Today : 48.75
Change : -0.382 or -0.8%

Silver Gold Ratio Today : 0.02051
Change : 0.000159 or 0.8%

Platinum Price Close Today : 1780.60
Change : -31.00 or -1.7%

Palladium Price Close Today : 803.45
Change : -9.55 or -1.2%

S&P 500 : 1,299.54
Change : 2.91 or 0.2%

Dow In GOLD$ : $187.99
Change : $ 2.15 or 1.2%

Dow in GOLD oz : 9.094
Change : 0.104 or 1.2%

Dow in SILVER oz : 443.33
Change : 0.18 or 0.0%

Dow Industrial : 11,989.83
Change : 4.39 or 0.0%

US Dollar Index : 77.75
Change : -0.147 or -0.2%

GOLD PRICE and SILVER PRICE completed in European trading last night (for us) the upward reaction begun yesterday. Mercy there was none once they began falling.

Wow. 'Twas a short-lived silver and gold rally, no?

The GOLD PRICE dropped from a high of $1,347 to $1,310.30. Comex gold gave up $14.60 and ended at $1,318.40. Aftermarket saw it trading near the low at $1,311.40.

The SILVER PRICE held up a little better than gold, but still took a rough beating with a knobbly club. Peaked last night at 2780c, then dropped to 2725c around 4:00 a.m., while Wall Street executives and traders were still wrapped in their beds, with visions of felonies danced in their heads. Silver then danced along that level, even rallied a bit. From the New York open it rallied to 2770c again at 10:30, then staged a Niagara Falls clean down to 2674c by 11:30. Comex silver closed down only 8.7c to 2704.5c.

On both charts today's action looks like a kind of cattywampus key reversal. That is, they tried to break into new high ground, then closed lower -- much lower -- than the day before. That stage-whispers that tomorrow will see more grief, wailing, and lower prices.

Although -- I hasten to emphasize -- both SILVER and GOLD remain in a primary uptrend (bull market) that will last another 3 to 10 years, this present correction has not yet played out. Gold has virtually locked in a further correction to $1,300 - $1,290, maybe the 200 day moving average at $1,279.50 (right now). Silver, too, will fall further, likely heading to 2500c or even to the 200 DMA, now standing at 2209c.

An alternative reality will follow if I am misreading these charts and both metals roar back, but I most strongly doubt that. You would have first warning shot of that if gold climbed over $1,345 and silver over 2800c.

About now y'all will have to prove your mettle, and whether you are a bunch of geese that panic at every breeze, or whether you understand the primary trend and why you must hold on. More than that, you must grasp that the market is about to offer you -- at the bottom of this move -- a colossal buying opportunity.

While the US dollar index continues to wallow and sink like a torpedoed garbage scow, other parts of the world make no more economic sense. Stocks rise, on the hope that a US and world economy will re-materialize out of the speculative mists. Right, they will appear right on the heels of Santa Claus, the Easter Bunny, and the Tooth Fairy. Everything's possible, some things just ain't too likely.

Specifically, the dollar index fell 14.7 basis points today to 77.751. Chart looks like the EKG of somebody on cocaine, up, down, all over the place. Maybe it found some sort of bottom today at 77.60, but I sure wouldn't swing over hell using that for a rope. Falling wedge buildeth still, arguing that an upside move will come. Ahh, but when?

STOCKS measlied along again today, Dow gained 4.39 (Be still, my beating heart!) to 11,989.83. S&P packed in a monstrous 2.91 points to 1,299.54. I don't know who is buying, but I have some fine development land in a Florida swamp I'd like to sell them. Rising wedge will eventually wreak its vengeance and gut the optimists, sadly.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Wednesday, January 26, 2011

Gold Price Jumped $11.00 in the After Market to Meet the $1,345 Resistance

Gold Price Close Today : 1333.00
Change : 0.70 or 0.1%

Silver Price Close Today : 27.132
Change : 0.321 cents or 1.2%

Gold Silver Ratio Today : 49.13
Change : -0.562 or -1.1%

Silver Gold Ratio Today : 0.02035
Change : 0.000230 or 1.1%

Platinum Price Close Today : 1811.60
Change : -14.90 or -0.8%

Palladium Price Close Today : 813.00
Change : -5.05 or -0.6%

S&P 500 : 1,296.63
Change : 5.45 or 0.4%

Dow In GOLD$ : $185.87
Change : $ 0.05 or 0.0%

Dow in GOLD oz : 8.991
Change : 0.002 or 0.0%

Dow in SILVER oz : 441.75
Change : 0.25 or 0.1%

Dow Industrial : 11,985.44
Change : 8.25 or 0.1%

US Dollar Index : 77.76
Change : -0.242 or -0.3%

The GOLD PRICE today rose a meager 70 cents by Comex close at $1,333.00, but right after the close somebody gave meth to the entire market, and it jumped up $11.00, to reach once more the threshold at $1,345 resistance.

The SILVER PRICE rose a respectable 32.1c to close at 2713.2c, bringing it to the barrier at 2760c. This was a good bounce off yesterday's 2650, but leaves silver in limbo, hanging between 2800c resistance and 2650c support. My inclination is to expect a couple day's rise, followed by more downside. Premiums on 90% silver coin is rising, rising, and spread is narrowing, which points to higher prices. However, time and price drop from the 3 January peak don't seem great enough yet to qualify as a bottom.

But on any given day, I have a 50% chance of being right, and the person opposite me has a 50% chance. I just have to try to hold on to what the historical statistics and the chart patterns seem to say.

Let's see if silver can close above 2800c and gold above $1,445 tomorrow.

US DOLLAR INDEX dropped again, 24.2 basis points to end up at 77.76. Its fall's momentum is slowing, and forming a falling wedge, which presages an upward break. However, MACD and RSI remain pointed firmly earthward. Could get a turn any time, or no turn at all, but that wedge argues something will happen soon.

STOCKS rose today, Dow up 8.25 to 11,985.44 and the SY_500 to 1,296.63, up 5.45.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Tuesday, January 25, 2011

Silver and Gold Price Correction Continues, How Long Will it Last?

Gold Price Close Today : 1332.30
Change : (12.20) or -0.9%

Silver Price Close Today : 26.811
Change : (0.507) cents or -1.9%

Gold Silver Ratio Today : 49.69
Change : 0.476 or 1.0%

Silver Gold Ratio Today : 0.02012
Change : -0.000194 or -1.0%

Platinum Price Close Today : 1783.20
Change : -28.00 or -1.5%

Palladium Price Close Today : 782.75
Change : -29.95 or -3.7%

S&P 500 : 1,291.18
Change : 0.34 or 0.0%

Dow In GOLD$ : $185.84
Change : $1.65 or 0.9%

Dow in GOLD oz : 8.990
Change : 0.080 or 0.9%

Dow in SILVER oz : 446.73
Change : -0.04 or 0.0%

Dow Industrial : 11,977.19
Change : -3.33 or 0.0%

US Dollar Index : 78.00
Change : -0.003 or 0.0%

Returned with Susan from Nashville & am pleased to report with hearty thanks to God that she came through the procedure quite well and they shocked her atrial flutter into submission. Thank you for your kind prayers. Some of y'all thought she was having an ablation, but she wasn't. They did a trans-esophageal echocardiogram, where they stick an ultrasonic probe down your throat to make sure you have no clots in the atria of your heart. Then they shock the heart to stun the atria out of their fast, irregular rhythm. Don't try this at home.

The GOLD PRICE fell as low as $1,322.70, well past my $1,330 target but not as low as my $1,315 target. However, gold closed Comex at 1,332.30, down only $12.20, not, as earlier, $20.00. This is constructive, but not dispositive, as those prone to substitute adjectives for verbs say. Or, as we might say in Tennessee, it looks better but is still a mite green around the gills. This might be a good shelf to launch at least a small upward reaction from, or it might just keep on plunging. I don't believe gold has finished correcting yet.

SILVER PRICE today reached my first correction target at 2650c. Remember that my targets are based on what silver has done after earlier ratio lows in the last 10 years, so they have a lot of play in them. Based on that history, 2650c would be the smallest possible correction.

On Comex silver lost 50.7c to close at 2681.1. That 2650c mark formed firm resistance today & silver rounded down to that & up off it, which may form a basis for some sort of rally. After all, it has spent the last five days falling, so some sort of bounce is about due.

Worst signs today for metals were the hard falls in platinum and palladium. Platinum fell 1-1/2% & palladium, which last year was the star performer with an 89% gain, lost 3.8%. Both grey metals had been holding up until today. Their break hints at more downside for silver & gold.

When you see a red sunset you aren't surprised when it clouds up and rains the next day, but those clouds don't mean it will rain forever. So when y'all saw that high peak in SILVER & GOLD and low in the GOLD/SILVER RATIO on 3 January, you had to expect that a season of correction would come. Be patient & calmly await the outcome. Shouldn't be more than another 60 days at most.

US DOLLAR INDEX was surprisingly active today on a day rendered uncertain by O'Bama's speech tonight -- not that he is likely to deliver any news or change his Keynesian course.

Now the dollar has tried four times to break through 77.80 and fall further, but so far without success. Today it did rally to 77.40 -- twice -- but fell all the way back to 77.80. Trading now around 78, basically unchanged in spite of all the puff & blow.

Markets very rarely make four-fold bottoms. The dollar chart might be signaling a reversal, but if so it may not break 77.80 tomorrow, & in fact, must rise. Euro has reached 1.368, which might be a good place to turn around and drop. However, main chance says the dollar falls further and euro keeps rising.

The Dow had an 80 point range today, & closed down 3.33 to 11,977.19. S&P500 closed up 0.34 at 1,291.18. Other indices were mixed, some up, some down, but none by much. Stock market is waiting to see what sort of fiddle Mr. O'Bama plays, & hoping the little leprechaun has some lucky charms.

For stocks, this is as good as it gets, with all the Wall Street gurus waxing economically sanguine & breathlessly awaiting what tricks the Leprechaun will pull out of his green derby. Alas! Often the expectation outshines the fulfilment, & disappointment follows. In that derby, I fear, are only marshmallows & stars & moonbeams, but no magic tricks & surely no pot o' gold.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Monday, January 24, 2011

Silver and Gold Price Correction Continues, Ultimate Peak of Bull Market Still Years Away

Gold Price Close Today : 1344.50
Change : 3.50 or 0.3%

Silver Price Close Today : 27.416
Change : (0.098) cents or -0.4%

Gold Silver Ratio Today : 49.04
Change : 0.302 or 0.6%

Silver Gold Ratio Today : 0.02039
Change : -0.000126 or -0.6%

Platinum Price Close Today : 1811.20
Change : -15.30 or -0.8%

Palladium Price Close Today : 812.70
Change : -5.35 or -0.7%

S&P 500 : 1,290.84
Change : 7.49 or 0.6%

Dow In GOLD$ : $184.20
Change : $ 1.21 or 0.7%

Dow in GOLD oz : 8.911
Change : 0.059 or 0.7%

Dow in SILVER oz : 436.99
Change : 3.98 or 0.9%

Dow Industrial : 11,980.52
Change : 108.68 or 0.9%

US Dollar Index : 78..033
Change : -0.200

The GOLD PRICE and SILVER PRICE are confused. After the long fall last week, gold bounced at least a little today, up 3.50 by Comex close to end at $1,344.50. Silver, though, pulled in the opposite direction, dropping 9.8c to finish its day on Comex at 2731.8c.

'Twas the aftermarket that unsettled me. Gold dropped $11 and silver 40c after Comex closed. That speaketh not strength in my ear.

In my little mind, at least, it's clear that gold is targeting $1,330 before this correction ends. Beyond that, the 200 day moving average comes in about $1,277, while one of my correction targets generated by ratio history is $1280. Yet suspicion begins to build in my mind that the GOLD PRICE might well cut short this reaction.

Peeking below that 2700c line did not leave the SILVER PRICE looking resolute. It fell to 2731.8c at Comex close, but that further drop afterward hurt, and leave the next target at 2650c.

The unexpected right now would be for silver and gold to turn round and rally to new highs. This is NOT what I expect after studying behavior after earlier GOLD/SILVER RATIO lows, but because that last move up was so lethargic, it remains a possibility.

We keep on getting calls from people inquiring whether they ought to sell their silver and gold now to protect their profits. Answer? Not unless you want to see all your pioneering work of the last 10 years go up in smoke while you watch silver and gold correct for a short time, then blast out of sight.

Y'all must understand that you NEVER sell a bull market position, no matter how "certain" you are that the market will correct and you will be able to buy back lower. You never make the big money in trading, but in getting right and WAITING. Ultimate peak of this bull market lies three to ten (3 to 10) years away. Hold on. Wait.

People with suspicious minds -- me -- would wonder if there were any connection between Bernard O'Bama's State of the Onion address tomorrow and a new high for the move in the Dow today. Am I hinting that the Nice Government Men, who (we all know) are above reproach, would manipulate the stock market or the economy for base political reasons? Yes, I suppose I am, since they've been doing that for the last 77 years or longer. Anyway, twas an eye-catching coincidence.

Dow Jones Industrials moved further into the green zone of Over-bought-ness on the RSI today. Dow rose a large 108.68 to close at 11,980.52. S&P500, not quite as optimistic, rose 7.49 (the S&P's rise ought to be about equal to the Dow if you multiply it by 10). Dow is as overbought as gold was back in October or Silver in early November. Behold, friends! No market, not even stocks bloated by the NGM, is immune to gravity forever, except under that school of technical analysis dominated by the Brothers Grimm.

Face the facts: the US DOLLAR makes it difficult for anyone to befriend it. Dollar index today closed down 19.6 basis points (0.25%) and made a new low for the move at 77.81. Barely held on above 78, and won't hold on there tomorrow unless something changes.

Of course, currency exchange rates are all manipulated ultimately and reveal policy decisions. Seems that Bernanke and Bernard have taken a decision to let the dollar seek its natural level. Or maybe the market is doing that work for them, based on their promises of generous inflation to depreciate the dollar. Either way, the dollar index has passed almost all support areas and appears to be headed for 76.70 or even 75.60.

Seems the currency markets don't expect much from the State of the Onion address. Yen fell 0.3% today and euro rose 0.38%.

Since Friday my wife Susan's heart has been racing. Cardiologist today said it is atrial flutter, and tomorrow Susan will undergo a procedure to try to right her heartbeat. I would be deeply grateful for your prayers on her behalf, that this procedure would succeed in regulating her heartbeat.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Friday, January 21, 2011

The Gold Price Followed Through Today Falling Another 5.50 to Stop at $1,341

Gold Price Close Today : 1,341.00
Gold Price Close 14-Jan : 1,360.40
Change : -19.40 or -1.4%

Silver Price Close Today : 2741.6
Silver Price Close 14-Jan : 2830.9
Change : -89.30 or -3.2%

Gold Silver Ratio Today : 48.91
Gold Silver Ratio 14-Jan : 48.06
Change : 0.86 or 1.8%

Silver Gold Ratio : 0.02044
Silver Gold Ratio 14-Jan : 0.02081
Change : -0.00036 or -1.8%

Dow in Gold Dollars : $ 183.01
Dow in Gold Dollars 14-Jan : $ 179.11
Change : $ 3.89 or 2.2%

Dow in Gold Ounces : 8.853
Dow in Gold Ounces 14-Jan : 8.665
Change : 0.19 or 2.2%

Dow in Silver Ounces : 433.03
Dow in Silver Ounces 14-Jan : 416.38
Change : 16.64 or 4.0%

Dow Industrial : 11,871.84
Dow Industrial 14-Jan : 11,787.38
Change : 84.46 or 0.7%

S&P 500 : 1,283.35
S&P 500 14-Jan : 1,293.24
Change : -9.89 or -0.8%

US Dollar Index : 78.130
US Dollar Index 14-Jan : 79.066
Change : -0.94 or -1.2%

Platinum Price Close Today : 1,826.50
Platinum Price Close 14-Jan : 1,811.40
Change : 15.10 or 0.8%

Palladium Price Close Today : 818.05
Palladium Price Close 14-Jan : 793.00
Change : 25.05 or 3.2%

The GOLD PRICE followed through today on yesterday's fall through $1,350, losing another 5.50 to stop at $1,341, not far from our first target at $1,330. On the weekly chart gold fell below its 20 WMA (1,353.14), offering another weight to gravity.

The SILVER PRICE dropped another 4.3c today after tumbling 133.3c yesterday. Comex closed at 2741.6c.

Silver has fallen through its 20 DMA (2929c) and 50 DMA (2854c) and below here the next backstop appears at 2645c -- coincidentally my highest price target for this correction. Silver's fall is liable to turn vicious next week, so brace yourself.

Reflect a moment upon the GOLD/SILVER RATIO. From my viewpoint, that ratio is technically controlling the market right now. It troughed on 3 January 2011 at 45.749. That also coincided with the high closes for silver and gold.

Looking at past ratio lows, the ratio will spend about 3 months rising to a reaction peak. Unfortunately, that doesn't always coincide with the silver and gold price lows, but 'twill fall in the neighborhood. As silver showed greater volatility upwards in the rally's last phase, so also it will show greater volatility downwards in the reaction. Silver could fall to 2640c to 2115c. Gold, on the other hand, probably won't fall lower than $1,280.

What would gainsay these forecasts? The GOLD PRICE above $1,425 hand in hand with the SILVER PRICE above 3109c or the ratio below 45.749.

While causes remain, effects continue. Rising silver and gold are the effect of inflating the money supply in every fiat currency. Has the cause been removed? No. Well, then neither will the effect disappear. Ignore all the dire and supercilious warnings of the "end of the gold bubble" and "death of silver." This is a primary uptrend, a raging bull market that has 3 to 10 more years to run and prices you and I cannot now even envision.

Silver and gold dropped stoutly, the dollar joined, while stocks diverged from metals and rose. Meanwhile, platinum and palladium said, "No, we ain't a-goin'" and rose instead. Ratio rose since metals fell.

Although the US DOLLAR INDEX rose yesterday after touching 78.50 support, it slammed down today 69.3 basis points to 78.13, smashing all hope that 78.50 might hold it.

Where do we stand now?

The short term chart shows the 20 DMA (79.68) just crossed below the 50 DMA (79.81) which confirms the dollar is headed lower. Significantly lower. Most likely target is 76.70, maybe the last low at 75.63. Only thing putting the brakes on against that conclusion is the euro chart, where the euro gapped up today after a long nine-day series of upmoves. Might be an exhaustion gap.

Weekly dollar chart looks even worse. 20 WMA (79.07) has fallen below the 200 WMA (79.58). Hard to imagine what might stop this plunge short of 75.63. Clearly, my expectation that the dollar would rise in the first half of this year was wrong.

STOCKS rose again today to a new high for the move. Dow reached 11,871.84, up 49.04. S&P wasn't quite as enthusiastic, rising 3.09 to 1,283.35.

Stocks are progressing from overbought to over-overbought to preposterously overbought. Relative Strength Indicator stands at 74.15, when 70 is extremely overbought. MACD is also overbought, but today's rise came on higher volume. Deadly rising wedge has formed to points surely to a sharp breakdown.

Stocks remain the moldy deviled eggs in the investment picnic basket.

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Thursday, January 20, 2011

The Gold Price Lost $23.70, a New Low for the Move

Gold Price Close Today : 1346.50
Change : (23.70) or -1.7%

Silver Price Close Today : 27.459
Change : (1.333) cents or -4.6%

Gold Silver Ratio Today : 49.04
Change : 1.447 or 3.0%

Silver Gold Ratio Today : 0.02039
Change : -0.000620 or -3.0%

Platinum Price Close Today : 1810.50
Change : -24.50 or -1.3%

Palladium Price Close Today : 812.55
Change : -1.85 or -0.2%

S&P 500 : 1,280.26
Change : -1.66 or -0.1%

Dow In GOLD$ : $181.51
Change : $ 3.12 or 1.7%

Dow in GOLD oz : 8.780
Change : 0.151 or 1.7%

Dow in SILVER oz : 430.56
Change : 0.12 or 0.0%

Dow Industrial : 11,822.80
Change : -2.49 or 0.0%

US Dollar Index : 78.82
Change : 0.176 or 0.2%

The GOLD PRICE lost $23.70 to close at $1,346.50, a new low for the move, and lower that the previous low, $1,353. Once that former $1,362 low was broken a few days ago, it became very likely gold would fall lower, in spite of the last few days' rally.

Gold lost 1.7% today and silver skidded 4.6% [sic] That fall typifies the reaction off a GOLD/SILVER RATIO low (3 January). Give it room, 'twill carry further, but 'twill also stop. Be ready.

Remember that a downtrend is defined as a series of lower highs and lower lows. Bear in mind also that a "trend in force remains in force until broken." At the very least, a trend change requires a higher low, a little higher high, even to hint of a beginning. Just watch. Be patient. My targets for gold range from $1,330 to $1,280. Problem with telling y'all that is that you get the idea that I EXPECT to see that lower number. I don't, I just recognize it as a possibility. Every day you have to look at the chart again to see whether it has changed its mind. Maybe at $1,330, or $1,315, or $1,295 it will show that mind-change. I won't know till it happens.

For the nonce, $1,345 support held for gold. From here gold has lots of trading back and forth all the way to $1,315. Below that, not so much till you reach $1,260. In fact, I don't expect this to be a brutal, major correction, but fairly short and shallow.

But there's no sign of relief yet.

The SILVER PRICE fell off a cliff at 2820c at NY open, and never hit bottom till 2740c. By the time Comex closed silver had shed 133.3c to close at 2745.9c. This took silver below its 50 DMA, 2853c, portent of more downside to come.

A good place to stop would be 2650c, but the 200 DMA, which silver oft revisits on corrections, stands at 2187c. Most likely seems 2240c, but what do I know?

Paid Moneychanger subscribers can pick up the January edition by logging in at www.the-moneychanger.com Sorry I missed sending a commentary yesterday, but I was busy finishing up the monthly Moneychanger.

Day before yesterday, I would bet if I were a betting man, marked the top in the Dow and S&P. Today's stock market momentum was heavily down until noon, then climbed gradually toward the close. Help from the NGM? Who knows, but it doesn't matter because stocks have built that huge fatal rising wedge on the chart and the vicious break coming will overwhelm all manipulation. Days of pain approach: seek cover.

The US DOLLAR INDEX bounced off 78.50 support after yesterday's low at 78.30, and climbed 17.6 basis points from yesterday to end trading at 78.816, up 0.23%. Five day chart shows an inverse head and shoulders or V-bottom that ought to mark the reversal. Dollar needs to push cleanly up through 79 now, to prove a turnaround. I'm still expecting a strong dollar for the first quarter or half.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Tuesday, January 18, 2011

Gold Price Looks to Continue Correction, What Would Change My Mind?

Gold Price Close Today : 1368.10
Change : 7.70 or 0.6%

Silver Price Close Today : 28.910
Change : 0.592 cents or 2.1%

Gold Silver Ratio Today : 47.32
Change : -0.717 or -1.5%

Silver Gold Ratio Today : 0.02113
Change : 0.000316 or 1.5%

Platinum Price Close Today : 1823.90
Change : 12.50 or 0.7%

Palladium Price Close Today : 812.90
Change : 19.90 or 2.5%

S&P 500 : 1,295.02
Change : 1.78 or 0.1%

Dow In GOLD$ : $178.87
Change : $ (0.23) or -0.1%

Dow in GOLD oz : 8.653
Change : -0.011 or -0.1%

Dow in SILVER oz : 409.48
Change : 1.67 or 0.4%

Dow Industrial : 11,837.93
Change : 50.55 or 0.4%

US Dollar Index : 79.00
Change : -3.334 or -4.0%

Right now, The GOLD PRICE and the SILVER PRICE both have today bounced off a touch of the lower Bollinger Band (I explain Bollinger Bands below) which hints but guaranteeth not that they will move higher.

Today I want to introduce y'all to Bollinger Bands. This is a technical indicator which you statistics buffs will love and the rest of you will stare at like a calf looking at a new gate. Bollinger Bands measure volatility by comparing where the market presently stands to its recent volatility. As volatility increases, the bands automatically spread (and vice versa) because Bollinger bands are two standard deviations of the 20 DMA above or below the 20 DMA.

There, I've said it.

Never mind, just consider what they mean. When the market reaches the bottom or top Bollinger Band, is it highly likely (two out of three) to reverse. Readings outside the Bollinger Bands are very much overdone.

Regardless of the Bollinger Bands I find myself a tad distrustful of silver and gold right now. Gold remains below its 50 DMA ($1,383), and silver only climbed above its 50 DMA (now 2849c) today. Aftermarket also lacks enthusiasm, falling off after Comex close. On the other hand, silver coin premiums have stiffened slightly.

Today the GOLD PRICE gained $7.70 to close on Comex at $1,368.10. The $1,376 spike high that came around 9:00 showed how strong resistance up there is. Gold spent the balance of the day chastened and declining, to a low at $1,363.80 about 3:15 Eastern. Gold has trended up since Friday, but only barely. Gold's breach of that December $1,362 low leaves me nervous, but it hit $,1353 on 7 January, then on last Friday hit $1,355. That qualifies, at least until contradicted, as a double bottom. Yet given the size and duration of the preceding rise, two weeks hardly seems enough time spent correcting.

What would change my mind? Gold above $1,392 would help. Above $1,406 I become warm and fuzzy, and above $1,425 I throw caution to the breeze and double up.

But we aren't there yet.

The SILVER PRICE hit the ceiling at 2906c today, but it bunched and clustered under 29 like a bull making up its mind to jump over a fence. Relative Strength Indicator (RSI) is neutral, while MACD points down. Once again, good as it looks I believe silver still needs to perform a bit more penance before it re-enters the limelight. I'd like to see a few more of those "experts" write articles explaining how the "silver bubble has burst." That will clinch the upside reversal.

There were no tender feelings abounding in the Dollar Index today. It sank 33.4 more basis points (0.43%) to 79.003, on its way to 78.50. Be not surprised if the dollar rallies tomorrow, since it is pushing the envelop of its decline. I still expect the dollar to check its fall around 78.50. Low today was 78.635, not far off my mark.

Euro on the other hand is pushing its upper envelope and its luck. It has slightly bested is 50 day moving average (1.3329) and closed today at 1.3380. Looks like a countertrend rally in an ongoing downtrend, although the MACD indicator is arguing with me about that.

Lawsy, Miss Claudie, it sure looks good to me! Yes, yes, the Dow rose another 50.55 points to 11,837.93 and the S&P levitated 1.78 points to 1,295.02, and the fish are jumping and the cotton is high and Ben Bernanke is going to take care of all of us. I'm warning y'all, you take that poor, half-frostbit snake into your bosom to warm him up and he'll bite you. Keep clear of stocks, and maintain a watchful suspicion.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Monday, January 17, 2011

Gold Price Closed at $1,360.40 Down $26.50 or -1.9%

Gold Price Close Today : 1,360.40
Change : -26.50 or -1.9%

Silver Price Close Today : 28.30
Change : -.94 or -3.3%

Platinum Price Close Today : 1,813.40
Change : -5.20 or -0.3%

Palladium Price Close Today : 788.45

Gold Silver Ratio Today : 48.07
Change : 0.66 or 1.01%

Dow Industrial : 11,787.38
Change : 55.48 or 0.5%

US Dollar Index : 79.33
Change : 0.25 or 0.3%

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Friday, January 14, 2011

Correction for Silver and Gold Price. Will Gold Reach $1,300 or Lower? and Silver $26.50?

Gold Price Close Today : 1,360.40
Gold Price Close 7-Jan : 1,368.50
Change : -8.10 or -0.6%

Silver Price Close Today : 2830.9
Silver Price Close 7-Jan : 2866.1
Change : -35.20 or -1.2%

Gold Silver Ratio Today : 48.06
Gold Silver Ratio 7-Jan : 47.75
Change : 0.31 or 0.6%

Silver Gold Ratio : 0.02081
Silver Gold Ratio 7-Jan : 0.02094
Change : -0.00013 or -0.6%

Dow in Gold Dollars : $ 179.11
Dow in Gold Dollars 7-Jan : $ 176.35
Change : $ 2.76 or 1.6%

Dow in Gold Ounces : 8.665
Dow in Gold Ounces 7-Jan : 8.531
Change : 0.13 or 1.6%

Dow in Silver Ounces : 416.38
Dow in Silver Ounces 7-Jan : 407.34
Change : 9.04 or 2.2%

Dow Industrial : 11,787.38
Dow Industrial 7-Jan : 11,674.76
Change : 112.62 or 1.0%

S&P 500 : 1,293.24
S&P 500 7-Jan : 1,271.50
Change : 21.74 or 1.7%

US Dollar Index : 79.066
US Dollar Index 7-Jan : 81.141
Change : -2.08 or -2.6%

Platinum Price Close Today : 1,811.40
Platinum Price Close 7-Jan : 1,735.80
Change : 75.60 or 4.4%

Palladium Price Close Today : 793.00
Palladium Price Close 7-Jan : 751.90
Change : 41.10 or 5.5%

Th GOLD PRICE rallied to $1,377.80, about 1:00 a.m. New York time. From there gold ground down the entire day, excepting for a larger fall-off-the-cliff down to $1,355.42. After that gold moved in a sideways chastened pattern, oscillating around $1,360.

Comex GOLD lost 26.50 to $1,360.40, after failing to break through $1,386 resistance yesterday. Now call to mind that earlier this week gold broke that old $1,362 low and touched $1,353. Yesterday it rallied, but today returned to close beneath the old low. This strongly suggests that gold will move lower, say, to $1,330 or $1,300.00.

The SILVER PRICE took a whuppin' twice as bad as gold's this week -- no surprise that, since smaller market silver is always more volatile than gold. Overnight silver traded to 2895c, but ground down toward the New York open. A little bump carried it up from 9 to 11, and then silver gave up again and sank to 2811c. Comex closed down a massy 94.3c at 2830.9c.

Behold, the chart! Silver has established a down trend with lower highs. One more lower low confirms that downtrend. Today's tumble carried silver below its 50 Day Moving Average (28.44), so momentum is, for the nonce, down.

Aww, put up your handkerchiefs! Markets never move in straight lines, and every party leaves a hangover. Silver and gold remain in a primary uptrend (bull market), and will be for several more years. Y'all got right by buying silver and gold back when everybody else through you were crazy. Now, sit tight.

By the way the GOLD/SILVER RATIO behavior also argues that on 3 January we saw tops in silver and gold. The ratio has definitely turned up, which signals a correction for silver and gold. No doubt gold will reach $1,300, maybe lower, and silver $26.50. Be patient, lift up your eyes to the hills. That's where the horizon is, and where you get your bearings.

In spite of a dead-cat bounce (rally) this week, silver and gold continue downward. Ditto the US dollar index. Appears that stocks will, for the nonce, gain a bit against silver and gold. After the magnitude of the plunges, it's about time.

Picture in thy mind a rectilinear box. Now place it on the US DOLLAR INDEX chart. Since 1 December the Dollar Index has traded within that box, bounded on the top by 81.30 and on the bottom by 78.80. The dollar index today once again reached the bottom of that box.

Boxes or consolidation patterns will break out eventually, but don't give much clue which way. This week the dollar has been driven -- down -- by a successful sale of sorry, scrofulous Portuguese bonds. Although this only pushed off the inevitable day of reckoning, speculators took it as a sign that the European sovereign debt crises (plural number) are fixed. This is the selfsame optimism that a six year old boy shows when he straps on a pair of cardboard wings and jumps off the barn. All the same, this groundless enthusiasm has driven the Euro up and the buck down. Whether it will push the dollar out of that box on the chart and back down to the November low at 75.63, or whether the dollar next week will rebound and clean the silly Euro-ites' clock, remains to be seen.

Not that I am any fan of the scabby US dollar and the crooks who manage it, but in truth it is not subject to the same centrifugal stresses as the Euro, where nations whose spending cannot be controlled are yet bound by a common currency. Since those nations have spent, oh, say, 100 years financing government by inflation and stealing from gullible bondholders, they don't easily change their habits. Thus the euro stands a somewhat better chance of blowing up before the dollar.

Maybe my natural born fool's brain has come unsynchronized from the market, but I still expect the dollar to rally further, although my expectation has grown weak as a radio broadcast from Pluto. US dollar today lost 12.5 basis points to stop at 79.066.

STOCKS rose today, proving that both P.T. Barnum and H.L. Mencken were right. One guesses that the euro-enthusiasm has infected stock-buying optimists with visions of economic recovery dancing in their heads. Veritas filia temporis.

Noteworthy today was the Dow in Gold Dollars, which measures stocks' performance in gold, broke through its 200 DMA. Recall that the DiG$ topped 25 August 1999 at G$925 (44.75 oz) and has been falling ever since, to G$179.11 (8.665 oz), by 79%. In down- trending market a
rally to the 200 DMA occurs from time to time, just before the market begins falling again.

Same thing is occurring in the Dow In Silver Ounces, now 415.56 oz. Could rally to 515, or could collapse next week. Stocks remain the brown lettuce in the crisper of the great refrigerator of investments.

'Tis worth noting and pondering that stocks have diverged from their sometime movement in the same direction with silver and gold. I'm not sure what that means, but it seems like something to wonder about.

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Thursday, January 13, 2011

The Gold Price Bounced off it's $1,390 Resistance to Below it's 20 DMA, Does That Calls for Lower Prices Tomorrow?

Gold Price Close Today : 1386.90
Change : 1.20 or 0.1%

Silver Price Close Today : 29.252
Change : (0.280) cents or -0.9%

Gold Silver Ratio Today : 47.41
Change : 0.490 or 1.0%

Silver Gold Ratio Today : 0.02109
Change : -0.000220 or -1.0%

Platinum Price Close Today : 1804.50
Change : 3.90 or 0.2%

Palladium Price Close Today : 806.55
Change : -3.45 or -0.4%

S&P 500 : 1,283.76
Change : -2.20 or -0.2%

Dow In GOLD$ : $174.86
Change : $ (0.48) or -0.3%

Dow in GOLD oz : 8.459
Change : -0.023 or -0.3%

Dow in SILVER oz : 401.06
Change : -0.77 or -0.2%

Dow Industrial : 11,731.90
Change : -23.54 or -0.2%

US Dollar Index : 79.22
Change : -0.809 or -1.0%

If I do what my friend Bob the Technical Genius demands and cut the top off the GOLD PRICE chart so I don't know what market I'm viewing, I see a break DOWN from the last few days' uptrend. Low today was at $1,369.25, high at $1,392. That high came as a spike shortly after the New York open, a spike that had disappeared within an hour. Gold traded sideways a while, and even closed $1.20 higher on Comex. Oh, but in the aftermarket the bottom dropped out. Right now it's trading $14 lower at $1,372.20. Sort of a "key reversal" day.

Today is not by itself fatal, but the GOLD PRICE did bounce off that $1,390 resistance area, and lodge below both its 20 dma ($1,386.64) and 50 Dma ($1,383.30). That calls for lower prices tomorrow.

GOLD/SILVER RATIO rose 1% today to close at 47.41, now 48.11 in the aftermarket. Rising ratio whispers, "Trouble" for silver and gold.

The SILVER PRICE gainsaid gold today, closing down 28c at 2925.2c on Comex although gold rose. Disharmony is never healthy.

SILVER low came at 2851c, down nearly 75c after the Comex close. 2980c resistance slapped silver to the ground. Tomorrow that 2850c becomes silver's rampart to be defended. Last intraday low came at 2832c, and the 50 DMA stands nearby at 2837c. I expect silver is in for a rough beating.

Looks like the correction that the rising Gold/Silver Ratio has been pointing at may arrive tomorrow.

Well, don't just stand there -- somebody help the dollar! Dollar index fell another 80.9 basis points today (1.4%) to 79.222, clearing the whole of the distance from 80 to 79 in a day (low came at 78.994). This brings the dollar to the 78.80 - 79 area that has supported it thrice since last December, and "fish or cut bait" time.

Mercy, yet again it is proved that I am just a natural born durn fool. Who would have thought, just looking at the facts, that finding a nest of suckers willing to be duped into buying Portuguese debt would make that much difference in the rate of the euro? A fool like me would ask, "Have the debts disappeared? Is Portugal now solvent? Greece? Ireland? Italy? Spain? Has anything really changed?"

See, those are the questions that only natural born durn fools ask, cause we are too plumb dumb to understand that facts have nothing to do with markets, only headlines, enthusiasm, and following the latest fads. So the euro gapped up today, o'erleaping its 20 DMA (1.3160) and shooting to its 50 DMA (1.3361), up 1.89% to 1.3362. Alas, natural born fools might suspect that 'tisn't euro STRENGTH that is driving it but euro SHORTS who were caught massively short the euro and had to cover by selling dollars.

The dollar has reached critical support. Let's see if it can hold on. I confess, this natural born fool has been expecting a long period (6 months or more) of dollar strength, but I'm a fool anyhow.

STOCKS today gave back most of the gains they stole yesterday. Dow dropped 23.54 to 11,731.90. S&P500 returned 2.2 to close at 1,283.76. I hear many roosters crowing about stocks, but they must be blind roosters. When I look at the Dow chart, all I can see is that massive rising BEARISH wedge which will eventually make good on its threat and break down in fears, tears, and plunges. I repent not: for me, stocks remain the day-old gizzards in the KFC of investing. (My daddy loved gizzards because he grew up eating them, but I don't have jaws strong enough to chew 'em.)

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Wednesday, January 12, 2011

If The Gold Price Were to Break Through $1,390 or Even $1,400, it Would Jump Merely From Sending all Those Shorts Scurrying to Cover

Gold Price Close Today : 1385.70
Change : 1.70 or 0.1%

Silver Price Close Today : 29.532
Change : 0.042 cents or 0.1%

Gold Silver Ratio Today : 46.92
Change : -0.009 or 0.0%

Silver Gold Ratio Today : 0.02131
Change : 0.000004 or 0.0%

Platinum Price Close Today : 1800.60
Change : 32.90 or 1.9%

Palladium Price Close Today : 810.00
Change : 22.30 or 2.8%

S&P 500 : 1,285.96
Change : 11.48 or 0.9%

Dow In GOLD$ : $175.37
Change : $ 1.05 or 0.6%

Dow in GOLD oz : 8.483
Change : 0.051 or 0.6%

Dow in SILVER oz : 398.06
Change : 2.82 or 0.7%

Dow Industrial : 11,755.44
Change : 83.50 or 0.7%

US Dollar Index : 80.03
Change : -0.820 or -1.0%

The GOLD PRICE added another $1.70 on Comex today to close at $1,385.70, but that feels like a slowing, rounding trajectory. Also it merely brings gold back to $1,386 resistance. If gold were to break through $1,390 or even $1,400, it would jump merely from sending all those shorts scurrying to cover.

My attention right now is focused more on the long term chart, and asking why since October Gold has been trapped between $1,315 and $1,430.60. (By the way, first of those peaks occurred at $1,387.10). Is this a top, where gold burns up buying power battering at $1,425 and fails? Or is it gold stretching and coiling for another spring upward?

Today gold did manage to close above its 50 DMA ($1,383) but below its 20 DMA ($1,387.02). All this feels better than falling through a trap door, but doesn't tell us much yet. Tomorrow or Friday will come the crisis, where gold must either go forward or fall back. But here gold is merely marching back and forth over territory already traveled.

The SILVER PRICE rose yesterday and today, but only by another 4.2c today to close Comex at 2953.2c. Again, this shows slowing momentum. In truth, silver merely traded sideways today, between 2970 and 2937c in US trading. Silver has crossed that first trip wire of a rally, the 20 day moving average (2936c) but done little else. Until silver climbs above 3121c, it is in a downtrend.

DMA, 20 day moving average, 200 day moving average, what's all that about? A 200 day moving average takes prices of the last 200 days and averages them. Next day, it drops the oldest and adds the latest, hence it is a "moving" average. Same method but shorter periods work for 50 and 20 DMAs.

Markets trending generally upwards will remain ABOVE their moving averages. When they dip below the first tripwire, the 20 DMA, they signal a possible trend change. At longish intervals upward trending markets correct and return to kiss off their 200 DMA, which marks the long term uptrend. All of this works upside down for markets in primary down trends, that is, they spend most of their time BELOW their moving averages.

I went back and looked once more at that GOLD/SILVER RATIO data from the last 10 years. Occasionally the ratio will peek above its 20 dma and then resume its downward move, but only rarely. More, the number of days the ratio has spent below its 20 DMA this trip is nearing the maximum number of days for such moves. That argues that we probably won't see a lower ratio for this move.

US DOLLAR INDEX took a whipping today, apparently because sufficient suckers -- Whoa! Scotch that! Make that "investors" -- were found to buy a $1.5 billion Portuguese bond offering. Since this -- for the nonce, at least -- means that Portugal won't default on its sovereign debt, that took pressure off the euro. Hence speculators sold the dollar and bought euros. Right, it IS a silly game of musical currencies.

But the dollar broke important support at 80.40 and lost 82 basis points (1.05%) to end trading at 80.025, on the day's low.

Shocking as it was, it's not the world's end yet for the dollar. Today's fall took the dollar only to its 20 day moving average (DMA, 80.09). More, the dollar index is still reacting downward to its touch of the 200 DMA. Then I look at the euro chart and wonder strenuously why anybody would want to own euros. Aren't dollars bad enough? Euros are clearly -- in spite of today's rise slightly above the 200 DMA and to the ten day moving average -- locked in a downtrend toward the centre of the earth.

Dollar's slip today may have condemned it to a trip to 79, but maybe not. Dollar's most likely path remains upward.

STOCKS did well today, passing that historic 11,722 year 2000 high and closing up 83.56 at 11,755.44. S&P rose 11.48 to 1,285.96.

Dr. Robert McHugh at techincalindicatorindex.com last night noted that in the 11 years beginning in 2000 the Dow has topped and declined from 4.43% to 29.81% at the beginning of every single year for 11 years in a row. Oddly enough, a lot of technical evidence suggests that's about to happen again.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Tuesday, January 11, 2011

Is The Gold Price Rise to $1,380.70 Something to Get Excited About?

Gold Price Close Today : 1380.70
Change : 7.00 or 0.5%

Silver Price Close Today : 29.560
Change : 0.709 cents or 2.5%

Gold Silver Ratio Today : 46.71
Change : -0.905 or -1.9%

Silver Gold Ratio Today : 0.02141
Change : 0.000407 or 1.9%

Platinum Price Close Today : 1767.20
Change : 22.20 or 1.3%

Palladium Price Close Today : 787.00
Change : 38.50 or 5.1%

S&P 500 : 1,271.50
Change : 4.73 or 0.4%

Dow In GOLD$ : $174.75
Change : $ (0.35) or -0.2%

Dow in GOLD oz : 8.454
Change : -0.017 or -0.2%

Dow in SILVER oz : 394.85
Change : 1.07 or 0.3%

Dow Industrial : 11,671.88
Change : 34.43 or 0.3%

US Dollar Index : 80.79
Change : -0.089 or -0.1%

Should we get excited about the GOLD PRICE $7.00 rise to $1,380.70 today? Well . . . Maybe, if it can clear $1,385 and climb again over $1,405. Last Friday's down spike to $1,353 has contributed a bottom, but will it last? Can it hold?

On a longer term chart the dollar has merely rallied to its 20 dma ($1,387.47) today and backed off to close below its 50 day moving average. High today was $1,386.25, low $1,364.45. Right now we still have to characterize this as merely sideways churning. Now if gold can close above that 20 dma tomorrow, that would raise better prospects.

For right now, gold has a series of lower lows and higher highs, and that spells "downtrend." Trend in force remains in force until broken.

The SILVER PRICE looks perkier than gold, with the same V-bottom on Friday. Low today came at 2904c and high at 2966c. Resistance to beat is now become 2960c.

Silver's 50 day moving average stands at 2820c and low came Friday at 2832c. Today it barely closed above its 20 DMA (2953) when it rose 70.9c to a Comex close at 2956c.

GOLD/SILVER RATIO today fell to 46.71, and below its 20 DMA (47), but that piercing of the 20 dma (from experience) is sort of like having your ears pierced: they don't grow back together too well. Generally once the ratio rises above the 20dma, the ride has ended. Of course, maybe "this time it's different."

We need to get something straight. No matter what my expectations from the market -- and I always attempt to tell y'all as truthfully as possible -- I NEVER tell anyone NOT to buy SILVER or GOLD, whether I think they're at a peak or not. Here is why:

I don't know everything.

On any given day there is a 50% chance I am right, and a 50% chance that somebody with the opposite outlook is right. Markets are simply that unpredictable. So if a customer asks me what I think, I will tell him, but my worst nightmare is that I tell someone to hold off and instead of dropping, the market rises, runs away, and they never get in. So trying to save them a few bucks, I cost them their entire investment.

I found some work papers not long ago where back in 2002 or 2003 I was trying to decide whether gold, which had reached the atmospheric height of $340, would correct to $320 or $300. Do y'all have any idea how ridiculous that $20 - $40 looks today with gold at $1,380?

I have also watched the really successful investors I have served. They take my breath away, buying big chunks whenever they get ready. What do they know most folks don't? They are buying the primary trend, and if they are right about the trend, whether they buy higher or lower, the trend will carry all purchases up skyward.

US DOLLAR INDEX today slowed its rate of descent, losing only 8.9 basis points (0.11%) to 80.792. Hanging around here at 80.80 - 80.70 works just fine for a correction, although the Dollar must not drop below 80.40 if it wants to sustain a rally. Expect higher dollar prices.

STOCKS today rose , wobbling back and forth without much enthusiasm. Dow gained 34.43 to 11,671.88, S&P rose 4.73 to 1,274.48. Stocks remain the green-tinged baloney in the investment refrigerator. Eat at your own peril.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Monday, January 10, 2011

Gold Price Trading Sideways, is it Consolidation or Reversal Pattern?

Gold Price Close Today : 1373.00
Change : 4.50 or 0.3%

Silver Price Close Today : 29.010
Change : 0.349 cents or 1.2%

Gold Silver Ratio Today : 47.33
Change : -0.419 or -0.9%

Silver Gold Ratio Today : 0.02113
Change : 0.000186 or 0.9%

Platinum Price Close Today : 1745.00
Change : 9.20 or 0.5%

Palladium Price Close Today : 748.50
Change : -3.40 or -0.5%

S&P 500 : 1,269.75
Change : 3.75 or 0.3%

Dow In GOLD$ : $175.21
Change : $ (1.12) or -0.6%

Dow in GOLD oz : 8.476
Change : -0.054 or -0.6%

Dow in SILVER oz : 401.15
Change : -1.33 or -0.3%

Dow Industrial : 11,637.45
Change : -37.31 or -0.3%

US Dollar Index : 80.90
Change : -0.250 or -0.3%

The GOLD PRICE today closed Comex at $1,373, up $4.50. The SILVER PRICE closed at 2901c, up 34.9c and above the psychologically important 2900c line, but not by enough to crow about. After five down days, one 34.9c up day doesn't count for much. It's below its 20 DMA (29.31) but above the 50 (28.10).

Rats! I misspoke. On Friday I wrote, "Those who have already swapped gold for silver have locked in big gains against gold and are ready to swap back when the time comes in the next four months." Clearly (or maybe not so clearly) I meant, "Those who have already swapped SILVER for GOLD." Sorry, sometimes my tongue plays tricks on me, especially when it's typing.

I feel really good about gold because big time analysts are talking about the end of the gold boom, gold rolling over, and so forth. Whenever you hear those tales, you know you are far from a long term top, because at the top you won't be able to find a radioactive pessimist with a Geiger counter.

Today gold again traded sideways and rangebound, between $1,375 and $1,365. Gold's refusal to break down further leaves me somewhat antsy. Construing gold with the GOLD/SILVER RATIO leads me to expect gold and silver to fall, because after a ratio low they usually do, and fast.

The ratio hit a low and has since clearly broken through its downtrend line. This sloth in rolling over and bouncing up leaves me scratching my head. For obvious reasons I would like to see the ratio re-visit its 200 dma, now at 60.32. It remains above the 20 dma tripwire, but below the 50 dma at 49.32.

Time to re-think the fundamental expectation. The SILVER PRICE and the GOLD PRICE should have made a higher high, but failed on 3 January 2011 at a level lower than gold's last high, but not silver's. Ergo, both ought to drop. Silver dropped about 300c, but that is nothing as dramatic as it has done after past ratio lows. Since October gold has traded sideways between $1,315 and $1,430. Is it a consolidation for a continuation, or a reversal pattern? Don't know, but the question keeps buzzing around like a pesky fly. Silver vastly outperformed gold over the past 5 months, which typically happens toward the end of a long rally. Yet the sharp reaction after the ratio low hasn't occurred. So far, that indicates great strength, but a break below $1,350 would change that. If gold jumped above $1,430, that would also change the outlook to "rally mode," but this correction surely has more time before it.

Today the US DOLLAR INDEX gave up 25 basis points to close at 80.895. Considering that it climbed last week from Wednesday, it has earned a rest. It bobbled along 80.8 at the day's end, so tomorrow may push down toward 80.40, but dollar gives no indication of turning back its decision to rise.

Dollar nearly reached its 200 day moving average, now at 81.66, and 'twas probably that nearness that turned it back. Once it clears that mark it should run strongly for 83.50 if it truly intends to keep climbing. 20 DMA stands at 80.13, so dollar must hang on above that.

STOCKS today were confused. Dow and S&P500 dropped, Nasdaq Comp rose. Nothing about stocks attracts me: they have traced a bearish upward wedge, come off of shockingly overbought RSI (above 70), and have an MACD turning down and sputtering. More than that, this next year will not be kind to the economy. More corpses will float to the surface in the Banking Swamp, all in states of advanced decomposition. The real estate bodies have not been buried, only put on the ice in the Fed and the basement, and they must be interred yet. Municipalities are likely to begin going white side up like so many poisoned alligators, taking muni bond holders with them. None of this makes me cheer for stocks. They remain the e. coli lettuce lurking in the investment supermarket's produce section.

The Dow dropped 37.31 points today to 11,637.45. S&P500 lost 1.75 to end at 1,269.75. Dow in Gold Dollars jumped back from that 200 DMA like I did this morning when I picked up a hot cast iron skillet by the handle. Naaw, I didn't burn myself. It just doesn't take me long to look at a hot skillet.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.



Friday, January 07, 2011

Gold Price Correction Likely, Watch For Buying Opportunities

Gold Price Close Today : 1,368.50

Gold Price Close 31-Dec : 1,421.10
Change : -52.60 or -3.7%

Silver Price Close Today : 2866.1

Silver Price Close 31-Dec : 3091
Change : -224.90 or -7.3%

Gold Silver Ratio Today : 47.75

Gold Silver Ratio 31-Dec : 45.98
Change : 1.77 or 3.9%

Silver Gold Ratio : 0.02094
Silver Gold Ratio 31-Dec : 0.02175
Change : -0.00081 or -3.7%

Dow in Gold Dollars : $ 176.35
Dow in Gold Dollars 31-Dec : $ 168.35
Change : $ 8.00 or 4.8%

Dow in Gold Ounces : 8.531
Dow in Gold Ounces 31-Dec : 8.144
Change : 0.39 or 4.8%

Dow in Silver Ounces : 407.34
Dow in Silver Ounces 31-Dec : 374.42
Change : 32.92 or 8.8%

Dow Industrial : 11,674.76
Dow Industrial 31-Dec : 11,573.42
Change : 101.34 or 0.9%

S&P 500 : 1,271.50
S&P 500 31-Dec : 1,257.52
Change : 13.98 or 1.1%

US Dollar Index : 81.141
US Dollar Index 31-Dec : 79.173
Change : 1.97 or 2.5%

Platinum Price Close Today : 1,735.80

Platinum Price Close 31-Dec : 1,768.60
Change : -32.80 or -1.9%

Palladium Price Close Today : 751.90

Palladium Price Close 31-Dec : 802.00
Change : -50.10 or -6.2%

The GOLD PRICE had a rough week. It hit a high on Monday, but not a new all time high, at $1,422.60. Tuesday the attack began overnight, and in the US gold fell from $1,408 to $1,375. Gold has spent the rest of the week trading sideways, from $1,380 to $1,353.95 today. If $1,350 - $1,360 support holds, then gold will make one more leg up. Otherwise, and more likely, is another drop. Gold already stands below its 20 and 50 DMAs, and has exceeded its December intraday low at $1,362.30. This leaves us looking at targets with names like "$1,330" and "$1,315.50" and "$1,300."

What a difference a week makes! Clearly, silver, gold, and the white metals hit a snag this week, if they haven't topped for this move. Stocks managed to rise nearly 1%, but remain the ptomaine poisoning on the investment steam table. Dollar Index, as I have been hinting, rose a hefty 2.5%.

Gold's failure to reach a new high with the push that began mid- December suggests this correction may not be as deep as it would have been had it run rally amuck with a much higher new high. We will have a clearer idea as the correction unfolds next week. Keep looking over your shoulder for the outside chance that gold bounces off $1,360 for one last trip skyward before entering a lengthy (6 or more months) correction. Comex gold closed down $2.90 at $1,368.50.

Right along with gold the SILVER PRICE took its whipping this week. Most of the wounds were taken on Tuesday, when silver dropped from 3070 to 2930c. Rest of the week levelled off between 2950c and 2830c. On Comex today silver lost another 44.9c to close at 2866.1c.

During the day silver attempted to rally, and even reached 2935c by 11:00 a.m., but it simply could not hold on to those gains and fell by 2:00 p.m. to 2860c.

Behold! Silver also labours under the burden of falling below its 20 DMA (now 2951), and is not far from its 50 (now 2800c). This brings visions of 2650c, 2500c, and even 2285c dancing in my head.

None of that nags at me as much as the GOLD/SILVER RATIO and it relation to its 20 DMA. Since 25 August the ratio has been under its 20 DMA, and that signifieth much. Whenever it dives under that 20 DMA, big things are liable to happen. Longer it stays under, the bigger the happening. Yesterday the Ratio climbed thru the 20 to 100.1%. Today it is 101.5%. I don't know of any other instance (and I checked back ten years) when the ratio dove under its 20 DMA and then poked above that it did not continue moving up. And "the ratio moving up" also implies "silver and gold move down."

I'm not a cheerleader; I try to be a truth-teller. (Why does English have a word for people who lie all the time, "liar", but no word for people who tell the truth? Would that be a "truther"?) The charts say what the charts say. Shoot not the chartreader.

Take this much home: Whatever depth this SILVER PRICE and GOLD PRICE correction reaches, however long it takes, it amounts to no worse than a correction in an ongoing bull market with much longer to run. Those who have already swapped gold for silver have locked in big gains against gold and are ready to swap back when the time comes in the next four months. I wish I could say that the ratio rebound high always coincides with the price lows, but it's much sloppier than that. Topping for the ratio can last two months or more, with multiple tops near the same point, accompanied by multiple silver and gold lows. When the time comes, we'll just have to pick a point and jump. But if you don't already own lots of silver and gold, watch out for this approaching buying opportunity. And if you own silver and gold, sit back and enjoy the correction, remembering how much your courage in buying them has won for you. Yep, I say "courage," because if you bought silver or gold anytime before the last six months, your neighbours, your financial advisor, your stock broker, and probably your brother-in-law thought you were crazy. But you went for the truth you saw -- rising silver and gold and a dying dollar -- rather than yield to the mob's intimidation. Good job! Now when the mob approaches during this correction to twist down that courage, just smile, wave, and remember.

The Dow in Gold Dollars, which tells you how much gold you need to buy the entire Dow Jones Industrial Index (one share of each component stocks) has nearly hit its 200 day moving average (G$176.60). Since it is a market in a primary down trend (bear market), it spends most of its time beneath the 200 DMA. But typical behavior calls for it to break out to the upside, climb to the 200 DMA, then reverse and resume its fall. This hints that the next week or so won't be kind to stocks. Stay out of stocks.

Dow fell 22.55 today to 11,674.76. S&P 500 fell only 2.35 to 1,271.50.

The US DOLLAR INDEX has boldly confirmed its uptrend this week by pushing through 79.50 resistance, 80.40 and 80.50 resistance, and climbing over 81. Today it floated another 35 basis points to close at 81.141. Not only does that place the Dollar Index above its 50 and 20 DMAs, but also above its last intraday high, and within spitting distance of its 200 DMA (now 81.66). Last trip (in late November) the 200 DMA stopped the dollar. This time it probably won't, so that paints a target at 83.50, the last high (August). A dollar trending higher places heavy weights -- chains, anvils and steel wheels -- on silver, gold, and stocks. Euro is free-falling, closed today below 1.3000. Is there a bottom?

Y'all enjoy your weekend.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 2010, 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.