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The Silver and Gold Price Rose This Week, The Dow, S&P, Dollar Index, Platinum and Palladium Fell, But What Does It Mean?


Gold Price Close Today : 1,408.70
Gold Price Close 18-Feb : 1,388.20
Change : 20.50 or 1.5%

Silver Price Close Today : 3289.8
Silver Price Close 18-Feb : 3229.8
Change : 60.00 or 1.9%

Gold Silver Ratio Today : 42.82
Gold Silver Ratio 18-Feb : 42.98
Change : -0.16 or -0.4%

Silver Gold Ratio : 0.02335
Silver Gold Ratio 18-Feb : 0.02327
Change : 0.00009 or 0.4%

Dow in Gold Dollars : $ 178.01
Dow in Gold Dollars 18-Feb : $ 184.52
Change : $ (6.51) or -3.5%

Dow in Gold Ounces : 8.611
Dow in Gold Ounces 18-Feb : 8.926
Change : -0.32 or -3.5%

Dow in Silver Ounces : 368.73
Dow in Silver Ounces 18-Feb : 383.65
Change : -14.92 or -3.9%

Dow Industrial : 12,130.45
Dow Industrial 18-Feb : 12,391.25
Change : -260.80 or -2.1%

S&P 500 : 1,319.88
S&P 500 18-Feb : 1,343.01
Change : -23.13 or -1.7%

US Dollar Index : 77.234
US Dollar Index 18-Feb : 77.642
Change : -0.41 or -0.5%

Platinum Price Close Today : 1,803.30
Platinum Price Close 18-Feb : 1,835.30
Change : -32.00 or -1.7%

Palladium Price Close Today : 790.55
Palladium Price Close 18-Feb : 850.50
Change : -59.95 or -7.0%

The GOLD PRICE closed yesterday at $1,415.30, then in the aftermarket lost nearly $20. Today's Comex close, though down $6.50 from Thursday at $1,408.70, in fact stood $12 above yesterday's aftermarket low. Same thing for the SILVER PRICE: closed Comex at 3289.80, down 26.8c but 95c above yesterday's lows. What meaneth this moil?

'Tain't as good as it looks, and probably isn't more than a bounce off yesterday's fall. If you look at yesterday as the first half of a Key Reversal (break into new high territory with a lower close) then today put the other half into place (lower close next day).

The road forks -- whither lead these forks? Both to correction, but may be the Shallow Road or the Steep Way. If Shallow Road, then the GOLD PRICE will stop at $1,390, mayhap $1,380, then roar back into a rally and cut through the 3 January old high ($1,422.60) faster than an earthquake wakes a weasel.

Steep Way stretches out much longer and further down, back perhaps to $1,325, perhaps further, and lasts several months. It will announce its presence when gold falls through $1,370, then $1,355. Fall is likely to be fast, triggered by who knows what impertinent event.

What worries at me like a terrier at a rat is the possible island reversal on gold's six month chart. (An island reversal leaps up leaving a gap, trades sideways forming the "island", then gaps down out of the island, leaving it isolated above the other trading.) Gold can nix that island by trading down (not gapping down) through $1,390, or by trading higher than $1,418 and rising more. Oddly, the weekly chart sports an island, too.

On the other hand gold's 20 DMA is about to rise through its 50 DMA, hinting gold will rise.

SILVER, silver! Silver rose to a new high -- 3433c -- on Monday when the big US market was closed. Tuesday it backed off that, but Wednesday and Friday bumped up on 3380c. Yesterday it fell out of the plane along with gold.

Both silver and gold look like they will spend several days recovering, whichever fork in the road they eventually take. First couple of days next week ought to see them move sideways or lower, but of course if they blow thru the last tops -- 3433c and $1,422.60 -- then they took the Shallow Road and are running down it.

Summing up the week is a binary task: it's either higher or lower than last week, and no argument. Silver rose, gold rose, Dow and S&P fell, US Dollar Index fell, platinum and palladium fell. But what does it mean??

Let's clean the dollar off our plate first thing. It dropped 1/2% from last week, and smashed hope of a rally soon by dropping out of its upside-down head and shoulders. However, it didn't follow through by crashing further. Low for the week came today as the dollar flirted -- if a scrofulous old hag like the dollar can be said to flirt -- with support around 77. This paints a double bottom with the last intraday low at 76.88, and gives the buck the chance to rally up off this double bottom. If the dollar falls through 77, then it will keep on falling to 75.63.

Any other clues anywhere else in the universe? Yep, the euro appears to have double-TOPPED around 1.3820. Lending force to that conclusion is today's 0.56% drop. Go euro, one of the great Trash Currencies of the world, next to the yen and dollar!

No confirmation of anything in currencies yet, but next move for the dollar ought to be up.

As the proverb says, "The Market is NOT benevolent," and stocks learned that in bleeding, bandages, and iodine this week. BEHOLD! How long a-building was that fatal rising wedge! Behold, how patient a wedge is to wreak its vengeance. Behold! How sore sharp the breakdown!

Today the Dow bounced 61.95, almost as rubbery as a dead cat, rising to 12,130.45. S&P 500 bounced, too, 13.78 points to 1,319.88.

As yesterday I expected, stocks rose a little today. This corrects the fall this week from nearly 12,400 to 12,000, but 'twill probably rise a bit more, perhaps to 12,200.

Lest y'all misunderstand, gaze upon the 6 month chart, and see how much damage the fall out of the wedge hath wrought. Ugly, ugly. Support lurks at round number 12,000, but next fall will cut clean through that like an acetylene torch through tinfoil. 'Tis already below the 20 DMA (12,154.97) and the 50 DMA at 11,877.74 is too close to help much, altho some lateral support dwells at 11,800. First strong lateral support appears at 11,451l, the last high. The chart is saying, shouting, screaming, "Lower! Lower! I must fall lower!"

Y'all enjoy your weekend.

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

- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
Phone: (888) 218-9226 or (931) 766-6066

© 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.
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