Gold Price Close Today : 1681.30 Change : 21.60 or 1.3% Silver Price Close
Today : 32.754 Change : 0.790 or 2.5% Gold Silver Ratio Today : 51.33 Change :
-0.593 or -1.1% Silver Gold Ratio Today : 0.01948 Change : 0.000222 or 1.2%
Platinum Price Close Today : 1555.00 Change : 28.00 or 1.8% Palladium Price
Close Today : 612.00 Change : 6.00 or 1.0% S&P 500 : 1,207.25 Change : 11.71 or
1.0% Dow In GOLD$ : $141.63 Change : $ (0.55) or -0.4% Dow in GOLD oz : 6.851
Change : -0.027 or -0.4% Dow in SILVER oz : 351.68 Change : -5.48 or -1.5% Dow
Industrial : 11,518.85 Change : 102.55 or 0.9% US Dollar Index : 77.00 Change :
-0.590 or -0.8% The GOLD PRICE and SILVER PRICE confounded me today once again.
I was interpreting yesterday as gold's third failure to pierce $1,675, but today
it closed Comex at $1,681.30, up $21.60. I ain't nothing but a natural born fool
no way, so I got no reputation to protect. Still, that little hook up to $1,681
just looks like a sidlin' move from Monday and Tuesday, and not a determined
rise. Tomorrow gold will prove me clean wrong if it trades up to $1,700. A break
thru $1,655 will drag gold down like concrete overshoes on a New York gangster.
Even if the GOLD PRICE breaks upside tomorrow and reaches $1,700 or $1,725, I
will still be suspecting it's no more than a rally in a correction. A close over
$1,775 would slap my jaws and prove me wrong. The SILVER PRICE stole another 79
cents on Comex to close at 3275.4c, breaking that pesky 3250c resistance. The 20
dma stands slightly higher, at 3357c, and crossing above that would turn silver
up, if only temporarily. SILVER could trade clean up to 3950c and still not
prove it's going higher. But the MACD indicator says silver will move higher for
a while, so it probably will climb for a few days. Big question that the SILVER
PRICE and GOLD PRICE will answer here is, Have they made their lows for the
correction? This rally will tells, either by shooting moon-ward or climbing and
falling back. Ours is an Age of Illusion in which we elect actors as presidents
and governors and pretend they can rule. Appearance is all, reality nothing. But
appearance can kill you. Doesn't matter whether a fire really is blazing in the
crowded theater, if a little smoke sends the crowd stampeding out, they can
still run over you and kill you. So markets today run on illusion. The
illusion's effect is further amplified many-fold by the huge degree of leverage
available in every market. In gold futures, for instance, you put up about 6.25
cents to control a dollar's worth of gold -- your 6.25 cents controls 16 times
its value, the illusion of wealth. I seek to pinpoint why Our Age so frustrates
rational and realistic people, namely, illusion overpowers reality and reason
everywhere. Thus a rational and realistic bank examiner would slap his briefcase
together, put his fountain pen in his pocket, stand up, brush the bank's dust
off his feet, and leave to report that the European and American banks are a
hopeless case, dead on arrival. But the banks own the illusionists we call
"government officials," and those worthies are constantly creating the illusion
that somehow or other, the banks and the financial system will all muddle thru,
if we hoi polloi will only suck up our guts, tighten our belts, and pay for the
bailouts. Which brings me to Europe and its basket case. EC President Jose
Barroso, who resembles a very worried toad, called for reinforcing (a.k.a,
bailing out) the banks, paying out the 6th loan to Greece (altho Greece admits
it can't meet the criteria), and a fast start for the permanent rescue fund
(sovereign debt bail out fund or "bucket"). Meanwhile, Slovakian legislators,
urged no doubt by muffled phone calls explaining how likely they were to jump
out of windows spontaneously if they didn't change their votes, agreed to vote
again on supporting the euro bailout fund, and get it right this time, after
they failed to approve it yesterday. Now y'all bear in mind that none of this
offers a genuine, effective solution to the crisis. It's all feckless illusion.
On the basis of these Illusionists' performance, the Stock Market Illusion
jumped today, along with the euro. Stocks did not overnight somehow secure a
more profitable outlook, the euro was not backed by gold or goats or fava beans.
Nothing changed but the illusion, but Ahhh! That was enough. Have y'all ever
seen that movie, Lars and the Real Girl? This fellow orders a life-sized blow-up
doll then walks her around town introducing her as his new girlfriend.
Everybody, even his family, plays along. Folks in his church throw a birthday
party for her. Even have a funeral for her near the movie's end. Happens right
there in Minnesota. They ought to make a sequel, Ben and the Real Economy.
STOCKS rose 102.55 or 0.9% to 11,518.85. S&P500 rose 11.71 or 0.98% to 1,207.25.
The Dow has now climbed thru its 20 day moving average (11,135) and 50 dma
(11,204) and crossed above the bottom jaw of the Jaws of Death topping
formation. 200 DMA, a possible target, stands at 11,968, which roughly coincides
with support/resistance about 11,860. If the Dow can pierce that 11,860 and the
S&P500 the 1,250 level, stocks could rally to 12,750. I doubt that, but if
stocks don't crumble at that resistance, it's possible. More likely is that the
mad-dog leveraged traders are driving the move by the latest wave of
illusion/optimism out of Europe, and their manic-depressive mood will swing
again on the next bad news. All this holds true, too, for the Franken-currency,
the euro. Off the 1.3164 bottom it has risen to close at 1.3787 today, up on the
day 1.03%, and at the bottom of the trading range (May-September) it broke down
from. In making this leap it has left two gaps behind so it looks like a strong
runaway move, but I've learned to distrust the euro's gaps some what. It left
them on the way down too, and thru the summer. They run a little way, then fizz
out. BICBW, and if the euro crashes thru the resistance at the bottom of the
channel, call it 1.3950, it might rise to 1.4000. Go ahead, Illusion-eaters!
Y'all buy a bunch of 'em. Y'all might get rich doing it, or you might just pick
your own pocket. Me, I wouldn't buy euros with stolen money, recalling that this
rally only marks a 50% retracement of the fall. The yen dropped today 0.76% to
129.46c/Y100 (Y77.26=$1), a big fall that sank it beneath the 20 dma (130.41)
but still rides atop the downtrend line from August. Breaking, but not broke. US
dollar index today lost 59 basis points and is now trading at 76.995. This
remains within the range of a normal correction, and stubborn fool that I am, I
still expect a costlier dollar. Argentum et aurum comparenda sunt -- -- Gold and
silver must be bought. - Franklin Sanders, The Moneychanger The-MoneyChanger.com
© 2011, 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 in
a bubble, primary trend way down. Whenever I write "Stay out of stocks" readers
inevitably ask, "Do you mean precious metals mining stocks, too?" No, I don't.
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.
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