Wednesday, October 31, 2012

If the Gold Price Closes Higher Tomorrow Stop Waiting and Buy

Gold Price Close Today : 1717.50
Change : 7.00 or 0.41%

Silver Price Close Today : 32.288
Change : 0.500 or 1.57%

Gold Silver Ratio Today : 53.193
Change : -0.616 or -1.15%

Silver Gold Ratio Today : 0.01880
Change : 0.000215 or 1.16%

Platinum Price Close Today : 1576.00
Change : 23.40 or 1.51%

Palladium Price Close Today : 609.00
Change : 13.65 or 2.29%

S&P 500 : 1,412.16
Change : 0.22 or 0.02%

Dow In GOLD$ : $157.63
Change : $ (0.76) or -0.48%

Dow in GOLD oz : 7.625
Change : -0.037 or -0.48%

Dow in SILVER oz : 405.61
Change : -6.72 or -1.63%

Dow Industrial : 13,096.46
Change : -10.75 or -0.08%

US Dollar Index : 79.91
Change : 0.021 or 0.03%

Look at the GOLD PRICE and silver price charts and report honestly what you see there: a breakout. Yes, a one-day breakout only. Yes, through the downtrend line only and not above lateral support, but it's plain as a wart on your nose.

The SILVER PRICE gobbled up 50 cents to close at 3228.8c, well above that 3200c blockade. Needs now to confirm the upturn by closing higher than 3250c.

The GOLD PRICE pulled in $7 to close at $1,717.50. Now it needs to confirm with a close above $1,725.

If we get the second day's close tomorrow above today's closes, the case is pretty well made that the correction has ended. Translation: if they close higher tomorrow, STOP WAITING and BUY.

One of the highest hurdles trying to read charts is to believe what your eyes see, instead of what your mind wants to see. Today I will ruthlessly talk about what I see.

The dollar index since mid-September has left behind a series of slightly higher lows and higher highs. Looks sloppy, and has been blocked by the 200 day moving average (80.63), but still looks like a market that is turning up. MACD indicator says the same, and it stands above its 20 DMA (79.72). Today it backed off 2.1 basis points to 79.906, but remains above 79.90 and the 20 DMA.

It would be an arrogant error to write the dollar off unless it closes below the last low at 78.93. Most likely next move is up, not down.

Euro is vibrating like a tuning fork but with less purpose and meaning. 20 DMA is $1.2977, and it buzzed back and forth across that line today but closed beneath it at $1.2958, although it rose 0.15%. Trend is down, if you believe the momentum indicators and chart.

Yen lost another 0.2% today to 125.31 cents and stands below its 200 DMA (125.95c). I wouldn't trade that nasty thing with your money. Locked in a downtrend.

Today's score: US$1 = Y79.80 = E0.7717.

Stocks looked sorry as gully dirt today. Every index except the S&P500 and Russell 2000 fell, and those two didn't rise enough to talk about.

S&P500 rose 0.22 (0.2%) to 1,412.16. Dow fell 10.75 (0.08%) to 13,096.46. Day's trading for both was weak as the Democratic Party Platform or Republican pacificism. Started the day off with a little rise, fell below unchanged by 11:00, then struggled underwater until day's end. Not the sort of result that builds confidence.

Look at that chart and admit what you see. Since September the Dow has rolled over, broken support of the rising wedge, traded up for the kiss good-bye, fallen off a cliff in what looks like a 3-wave, and is fixing to break down through its 200 DMA (12,979). Momentum indicators point straight down as a well pipe. Weeping, wailing, and gnashing of teeth in store here.

I'm sorry but I will not be sending a commentary tomorrow (Thursday) or Friday, because I will be in Colorado attending my daughter-in-law's funeral. God willing I'll return on Monday, 5 November.

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.