Wednesday, November 07, 2012

The Gold Price Reached a New High Stop Waiting and Buy

Gold Price Close Today : 1713.20
Change : -0.90 or -0.05%

Silver Price Close Today : 31.651
Change : -0.368 or -1.15%

Gold Silver Ratio Today : 54.128
Change : 0.594 or 1.11%

Silver Gold Ratio Today : 0.01847
Change : -0.000205 or -1.10%

Platinum Price Close Today : 1535.50
Change : -18.80 or -1.21%

Palladium Price Close Today : 509.55
Change : -9.80 or -1.89%

S&P 500 : 1,394.53
Change : -33.86 or -2.37%

Dow In GOLD$ : $156.05
Change : $ -3.68 or -2.30%

Dow in GOLD oz : 7.549
Change : -0.178 or -2.30%

Dow in SILVER oz : 408.60
Change : -5.08 or -1.23%

Dow Industrial : 12,932.73
Change : -312.95 or -2.36%

US Dollar Index : 80.74
Change : 0.116 or 0.14%

The silver and GOLD PRICE both kissed their old support good-bye, both reached new highs. Yes, both closed lower, too, but all lower closes are not equal.

The SILVER PRICE lost 36.8 cents to end at 3165.1. Low came at 3135, which, not coincidentally was it had been stymied climbing up from below, and where it broke out and gapped up on Tuesday. Same holdeth true for gold, but the bottom was our well-known old friend, $1,706.60.

Likely silver and gold have one more leg down in this correction, but that may be truncated. They cannot close below $1,700 and 3135, without demolishing my interpretation.

Both silver and gold pierced their 20 day moving averages (3229c and $1,722.24), so they are trying to break that tripwire for a higher move. Both have successfully pierced and remained above their downtrend lines.

Unless the silver and GOLD PRICE gainsay all these up-pointing signs by closing lower, we have a sinewy, scrappy, leather-tough rally in our future.

Stop mooning about not buying Tuesday or Monday at the lows and BUY. Sooner or later you have to take a risk, and the odds just don't get no better than this.

Colorado and Washington voted to legalize marijuana. I find that enlightening. Neither these states nor any others will challenge the federal tyranny on the police state or unconstitutional money or foreign wars or interference in the economy or the liberties of the citizen, or assassinations or torturing prisoners, but that smoking dope, now that's another matter. We'll fight the feds down to our last roach, Buddy! We believe in freedom, after all. Got to get that head right! Wonder what they do when the feds flex their muscles and withhold their highway funds and other subsidies? That'll be fascinating.
I don't think this can be fixed.

An email arrived in my box early today with the single word "Election" in the subject line. I opened it to read, "Hold on to your seat, Dorothy, because Kansas is going by-by."

To such prophetic genius, what could I possibly add?

Markets are not, contrary to what some economists contend, rational, any more than the people who make them up are rational. Today, for instance, the US dollar index rose and stocks fell on the news that Bernard O'Bama had been re-elected. If people had any foresight, they'd see that O'Bama's policies will gut the dollar, and they'd sell that dog. On the other hand, to the extent that stocks represent underlying real assets, the dollar depreciation will send their price up. Those gains will be illusory, due only to inflation, but they'll probably gain, unless, of course the prospect of another four years of government regulation, ethanol schemes, green pipe dreams, and stimulus packages to nowhere drives stocks down to the earth's core.

I look at the Dow chart and am impelled to burst out the same thing my mother blurted out the first time she visited our log house here, before we renovated it and doubled the size: "I don't think this can be fixed!" Turned out she was wrong, but I believe I am right.

Dow chart is green and puking sick. Dow today dropped 312.95 (2.38%, huge!) to 12,932.73. It sliced through the 200 DMA (12,991.63) like the guillotine through Marie Antoinette's ivory neck. Its jaws of death are eating jaws of death: it has formed a broadening top formation within a broadening top, offering a two-fold witness of its intent.

S&P500 sank 33.85 (2.37%) to 1,394.53. It looks no better than the Dow.

And measured in Gold, stocks broke down emphatically. The Dow in gold formed a long-lived diamond, broke down out of it in August, fell like your glasses out of your shirt pocket down a well, caught, rallied a little, then today collapsed through the uptrend line of that little rally, AND traded below the last low. I don't think this can be fixed.

US dollar index jumped up again today, as high as 80.924, nearly that 81 I've been looking for, and is trading now at 80.742, up 11.6 basis points (0.15%). That boosts the buck slightly above its 200 DMA (80.64). Either it will stall here, or clear 81 and head for 82, maybe 81.50. Momentum indicators are headed up, but technical indicators are chancy, chancy when a market is manipulated by central banks.

The euro saw no joy in Comrade Obama's election, socialist as it is. Euro sank through the crucial 62 DMA (127.87) and ended at 127.79, down 0.27%. I don't think this can be fixed, either.

Yen gained 0.53% to 125.09 cents per 100 yen, and appears to have turned up. Oh, not for any big rally, just turned up instead of sinking like an anvil in quicksand. I don't think the yen can be fixed, either.

Watching markets, sometimes things are really hazy. You can peer and peer and simply can't make out any form. The last year or so has been that way. Other times, all the klaxons blow and the bells ring and you'd have to be blind and deaf to miss what's going on. Today was one of those latter days.

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.