Wednesday, August 29, 2012

The Gold Price Gave Up $6.70 Today Gold Remains in Primary Uptrend and Will Usually Resolve Upside

Gold Price Close Today : 1659.80
Change : -6.70 or -0.40%

Silver Price Close Today : 30.837
Change : -0.038 or -0.12%

Gold Silver Ratio Today : 53.825
Change : -0.151 or -0.28%

Silver Gold Ratio Today : 0.01858
Change : 0.000052 or 0.28%

Platinum Price Close Today : 1516.60
Change : 0.10 or 0.01%

Palladium Price Close Today : 630.55
Change : -4.85 or -0.76%

S&P 500 : 1,410.49
Change : 1.19 or 0.08%

Dow In GOLD$ : $163.25
Change : $ 0.73 or 0.45%

Dow in GOLD oz : 7.897
Change : 0.035 or 0.45%

Dow in SILVER oz : 425.06
Change : 0.67 or 0.16%

Dow Industrial : 13,107.48
Change : 4.49 or 0.03%

US Dollar Index : 81.56
Change : 0.185 or 0.23%

I saw something new in the silver and GOLD PRICE charts today. Gold gave up $6.70 today to end at $1,659.80 while silver lost only 3.8 cents to 3083.7c. Silver's last three days' lows have been 3055c, 3058c, and 3059c. Clearly, 3055c has drawn its line in the sand.

But here's what I saw new in the 4-month silver chart: a pennant. At least, it's a pennant until it proves it's not a pennant by falling down out of the formation.

Pennants and flags work about the same way. They spurt up and sketch a flagpole, trade sideways a few days, then spurt up again, usually the same distance as the first rise, hence the saying, "Flags always fly at half mast."

The SILVER PRICE formation is a pennant, barely above its 200 DMA (3044c) and bumping against the downtrend line (about 3100c). If silver doesn't drop below 3044, maybe 3025c, then it's a flag and another upside jump looms. If it falls lower than 3025c, that gainsays the flag and sends silver back toward its breakout point at 2820c.

If this is a pennant, silver has its sights on 3445c.

The GOLD PRICE formation is more a flag, with slightly lower lows, bounded above by the downtrend line (from the 2011 highs). If this is a flag, gold will reach for $1,740. If not, it will fall toward the $1,625 breakout point.

And I don't know which it is, flag, pennant, or exhaustion, any more than a hog knows what a sidesaddle is for. Market will just have to tell us. Here's a hint, though: GOLD and SILVER are in a primary uptrend (bull market) and since they are primarily trending upwards, bull markets usually resolve to the upside, especially after they spent a year or more in a correction.

But what do I know? I'm nothing but a natural born fool from Tennessee, and ain't never wore pointy-toe shoe like them Wall Street fellers and central bankers a day in my life. If I wasn't a plumb fool, I wouldn't put myself up against Great Ones like them. Why, I'd jes' do what they tell me and let them steal my land and pick my pocket as much as they wanted, 'cause they're my Betters. It sez so in their Bible. Me, I've worn out three Bibles trying to find that part, but it has clean eee-scaped me.

The Great Ones Who Will Save Us did nothing much today. Many of TGOWWSU are meeting at Jackson Hole, where our own American Criminal Central Banker, Bandit Ben, will speak on Friday. Ooooo -- just before a 3 day weekend. Not good, as the Great Ones like to slam their traps shut -- the traps that catch us -- before 3 day weekends. That warning aside, what can Ben the Bloviator in fact say? More "we're thinking about inflating, but we're also thinking about not inflating"? Nothing worth hearing. Central bankers are like cockroaches. It's not so much what they steal and carry off as what they fall into and mess up that bothers you.

Thinking about that US dollar index, I looked at it another way. Up 18.5 basis points today, down 29.8 yesterday, up 11.3 day before, up 19.5 before that, down 14.9 day before. Think of letting steam out of an overheated boiler -- bleed it off a bit at a time. Look at the chart for the last 6 weeks, since the dollar's high at 84.10, and you will see that controlled fall. Nice Government Men in action.

Euro fiddled again at $1.2600 resistance. Dropped 0.29% to $1.2529, but is trying to break through that $1.2600. Friend pointed out to me a half-completed upside down head and shoulders reversal pattern in the euro. May be.

Yen is bouncing like a pin ball between the downtrend line and its 20 DMA. Dropped today 0.23% to 127.09c (Y78.68). I can't imagine the Japanese NGM really like this, or will accept it long term. They need a lower yen.

I apologize: I posted the wrong closes for the Dow and S&P500 yesterday, but wasn't off much. Sorry.

Stocks today rose without conviction, unable to retain the day's gains and closing nearly unchanged. Dow gains 4.49% (0.03%) to 13,107.48 and the S&P500 raced right along, up 1.19 (0.08%) to 1,410.49.

Both indices remain stalled in their rising wedge formations, biding time until they collapse again. Closes below 1,400 and 13,000 suck them down like the Great Maelstrom, Moskstraumen.

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

- Franklin Sanders, The Moneychanger
10:00am-5:00pm CST, Monday-Friday

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

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

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

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

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

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

One final warning: NEVER insert a 747 Jumbo Jet up your nose. No, I don't.