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Thursday, February 21, 2013

The Silver and Gold Price Must Not Close Below the Last Two Days' Lows

Gold Price Close Today : 1578.20
Change : 0.60 or 0.04%

Silver Price Close Today : 28.695
Change : 0.080 or 0.28%

Gold Silver Ratio Today : 54.999
Change : -0.133 or -0.24%

Silver Gold Ratio Today : 0.01818
Change : 0.000044 or 0.24%

Platinum Price Close Today : 1618.90
Change : -27.10 or -1.65%

Palladium Price Close Today : 733.20
Change : -2.80 or -0.38%

S&P 500 : 1,502.42
Change : -9.53 or -0.63%

Dow In GOLD$ : $181.81
Change : $ 7.50 or 4.30%

Dow in GOLD oz : 8.795
Change : 0.363 or 4.30%

Dow in SILVER oz : 483.73
Change : -2.97 or -0.61%

Dow Industrial : 13,880.62
Change : -46.20 or -0.33%

US Dollar Index : 81.48
Change : 0.392 or 0.48%

You'd think the silver and GOLD PRICE had stayed home in bed today judging by their Comex Closes. Gold closed up sixty cents (spell it out it's so small) at $1,578.20 while silver gained eight cents to 2869.5c. However, other charts don't tell that story.

Overnight the GOLD PRICE hit a lower low, about $1,558 but from midnight forward (NYC time) rallied as high as $1,584.70. This has the look of a key reversal.

What's that? When a market trades into new low ground for the move, then closes the day higher, that's the first half of a key reversal. Second and necessary half is a higher close the next day, i.e., tomorrow. All this plainly shows on an EOD (End of the Day) chart. With sentiment dragging the bottom, the RSI at a 12 year low, and gold trading below its lower Bollinger Band, gold is screaming time to slam it into reverse.

But screaming won't change gears. That takes market action, and I want to see some proof, like higher closes tomorrow for both silver and gold.

The SILVER PRICE looks much the same as gold, but didn't quite make a lower low today. Hit 2832c at the bottom and 2884.2c at the high.

However, silver's three day chart shows a double bottom yesterday and today, and a rise out of that bottom most of the day. Needs to close above 2884c tomorrow to make that look like a bottom.

Be patient. Better days are coming soon, as long as silver and gold don't close below the last two days' lows. Let's watch.

If the object of the FOMC manipulation was to drive down the euro against the dollar, it worked today. Euro dropped 0.75% to $1.3186, while the US dollar index (about half comprised of the euro) rose 0.5% or 39.2 basis points to 81.475. The euro gapped down and closed beneath its 62 day moving average. Euro's momentum indicators are screaming in freefall. Test will come about $1.3150. If it falls thru that, 'twill fall much more, say to the 200 DMA at $1.2827. More bad economic news out of Europe today will speed that fall. Surprise. European economy is not recovering. Euro fell 1.21% against the yen.

Yen gained 0.45% today to close at 107.38 cents per 100 yen. For better than two weeks the yen has traded sideways, but now has risen high enough to approach its 20 DMA (108.04) and the first sign of a reversal.

US Dollar index's close yesterday took it above the 200 DMA (80.92). Today it added to that gain 39.2 more basis points to end at 81.475. Dollar index has a minimum of 82 targeted, and perhaps higher. Of course, given the hyperactive Nice Government Men, that could change at any time.

The day wasn't kind to stocks. The Dow broke 13,900 to close down 46.92 (0.34%) at 13,880.62. The day was less kind to the S&P500, which lost 9.53 or 0.63%, closing at 1,502.42.

Right now 13,800 is the magic number for the Dow. It must hold that or tumble at least another 150 points.

AHA! Both the Dow in Gold and the Dow in Silver gapped down today, leaving yesterday's high isolated above and looking much like an island reversal. If so, both ought to follow through with lower closes tomorrow.

If confirmed, that implies stocks have peaked against silver and gold, and will cheapen against them.

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

- Franklin Sanders, The Moneychanger
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© 2013, 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.