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Tuesday, November 06, 2012

The Long Gold Price Correction has Ended Time to Jump into Gold and Silver

Gold Price Close Today : 1714.10
Change : 31.90 or 1.90%

Silver Price Close Today : 32.019
Change : 0.906 or 2.91%

Gold Silver Ratio Today : 53.534
Change : -0.534 or -0.99%

Silver Gold Ratio Today : 0.01868
Change : 0.000184 or 1.00%

Platinum Price Close Today : 1554.30
Change : 15.60 or 1.01%

Palladium Price Close Today : 619.35
Change : 17.15 or 2.85%

S&P 500 : 1,428.39
Change : 11.13 or 0.79%

Dow In GOLD$ : $159.74
Change : $ (1.38) or -0.85%

Dow in GOLD oz : 7.727
Change : -0.067 or -0.85%

Dow in SILVER oz : 413.68
Change : -7.76 or -1.84%

Dow Industrial : 13,245.68
Change : 133.24 or 1.02%

US Dollar Index : 80.60
Change : -0.110 or -0.14%

What's happened in the silver and GOLD PRICE the last two days looks an awful lot like a key reversal. The GOLD PRICE rose $31.90 to close $1,714.10 while silver leapt 90.6 cents to 3201.9c.

A Key Reversal takes place when a market breaks to a new low for the move, like gold's $1,672.40 yesterday and then closes higher than the day before, like gold's close yesterday at $1,682.20. But the needful other half of the Key Reversal is a higher close the next day, like gold's $1,714.10 close today, up $31.90.

In fact, the same thing happened yesterday for the SILVER PRICE as well, with a new low at 3064c and a higher-than-the-day-before close at 3111.3. Today silver wreaked vengeance on the shots by gobbling up 90.6 cents and closing higher at 3201.9c.

Let's clinch this down. Gold hit $1,720.33 today and was stopped only by the Kryptonite rays from $1,725 resistance. Once it jumps that lateral resistance at $1,725, coincidentally also the 20 DMA's location at $1,724.65, 'twill run like a scalded dog.

Shucks, it don't stop there. The MACD and the RSI have both turned up, too, and both silver and gold have broken through, pierced, shattered, and penetrated the downtrend line from the early October highs. And platinum and palladium have both turned up.

And the GOLD/SILVER RATIO made its high for the move yesterday and dropped today.

Folks, it don't get no better than this. Of course, the risk you're wrong hovers even over the surest thing and closest reasoning, but still, it don't get no better than this. Buy silver and gold tomorrow, and never mind the price. The ONLY contradiction to that would be if gold opened tomorrow below $1,695 -- the ONLY contradiction.

Here's a little guessing game: Which asset has managed the highest total return since Obama's first election in November 2008? Nope, not stocks, not the dollar, not oil, not even gold, but SILVER, with a 200+% return. Gold came in second a little over 110%.

The long correction has ended. Time to jump back into silver and gold. Don't y'all make me have to tell you twice, as my Grandmamma might say.

Today and yesterday takes place the Election Lottery where people take highly speculative positions anticipating some change arising from the election. For instance, lots of folks are buying stocks, probably anticipating a Romney election which they think will boost stocks. Or they're buying gold anticipating four more years of Obummer. Either way, it's just a bet. The genuine trend will avenge itself come Wednesday.

US Dollar Index fell a squeentch today, 11 basis points (0.14%) to 80.602. Now of all people I would not be suspicious, yea, paranoid enough to suggest that the head of the Federal Reserve, the Bernancubus, would jimmy with international and dollar exchange rates in the run up to an election, any more than I would ever suspect that said Fed-head would announce QE3 to boost somebody's presidential campaign, or that Federal Government bean counters would announce wildly improved employment stats just to further the incumbent's campaign. Nope, not me -- I'd never do that. [The figure of speech is called "praeteritio" or "apophasis," and means to mention by not mentioning. Handy one, that!]

Anyhow, the US dollar index aimeth yet up, and will aim up, as long as it stays above 80.25, whoever gets elected.

Euro filled yesterday's gap and hit its crucial 62 day moving average. Gained 0.14% to $1.2816. I'd as soon own euros as have a root canal done by a diesel mechanic, without anesthesia.

Japanese yen doesn't look much better. It lost 0.14% today to 124.45 cents per 100 yen, not enough to change anything at all on the chart. Remains below its 200 DMA, which resembles drawing to an inside straight at 5 card stud.

Y'all recall that 138.61 points the Dow gained on 1 November and that 139.46 points it lost on 2 November? Well, today it gained 133.24 points, remaining stuck behind the barrier at 13,250. Dow ended at 13,245.68, up 1.02% while the S&P tagged along, adding 11.13 (0.79%) to 1,428.39.

This action is sorry as gully dirt. Both the S&P500 and the Dow remain below the neckline of the Head and Shoulders formed from January to May of this year. Both broke down through the neckline thereof, both made June lows, both formed bearish rising wedges to slightly higher highs for the year.

Back away from that chart a second. Both have formed Broadening Top formations and are hovering a bit above their 200 DMAs. Both now rest right on that old neckline.

I reckon if the Nice Government Men pour buying into the market that might raise it, but nothing in the chart suggests stocks will rise under any other power.

On 6 November 1861 was elected the first president of the Confederate States of America, Jefferson Davis.

For those of you who want to know more about my daughter-in-law, Shawn Sanders, you can read this article from the Vail Daily about her work founding and running Little Chefs of Vail. Love just overflows out of some people, and must find a stream to run in. bitly.com/SzBh30

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

- Franklin Sanders, The Moneychanger
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© 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.