Saturday, April 25, 2009


I may decide to stay a few more days so I'm going to put the weekly report on the blog this week. Granted this will be a condensed version as most subs already know what we are watching.

As I noted the other day gold completed the 1-2-3 reversal on Thursday. I've also included a weekly chart. Not only did gold bounce off the 75 week moving average, it also completed a weekly swing low. Actually gold completed a weekly swing low last week.

This was one of the things we've been waiting for as a signal that the weekly cycle had bottomed. I'm also leaning toward this signalling the B wave bottom. If this turns out to be the case then gold should now be entering the next C wave advance. I suspect this will ultimately turn out to be a massive rally. The size of the consolidation from March 08 has become extremely large. WD Gann noted that the size of the consolidation is often indicative of how large the ensuing rally will be.

I expect this one to be huge and probably last at least into the fall if not spring of next year.

This is the time to reread Old Turkey as I suspect quite a few investors are going to lose their position during this rally. Remember bull markets get overbought. Then they get more overbought. Oscillators are not going to be our friend during a C wave rally.

Subscribers know what to look for before taking profits on mining positions. At the moment neither of our two signs are anywhere near the "take profit" level and I doubt they will be for at least a couple of months and probably not for many months. Hopefully this rally can drag out long enough to put us into the long term capital gains bracket before we get the sell signal.

A quick word on the miners, which is where we want to be invested instead of actual gold and silver, as the miners are still hideously undervalued.

The move on Friday suggests that the breakdown from the coil was indeed a false move as expected. We should now see a much stronger and more lasting move in the opposite direction. I expect the miners will make new highs for the move in the coming weeks.

I don't have access to my spreadsheet at the moment but a quick glance at the current COT report suggests that the Blees rating on silver is in the low to mid 90's this week. I can tell you from past experience there's no way I want to be selling silver or anything related to silver when the Blees rating is that high.

There will be no changes to the portfolio this week and I kind of doubt there will be anytime soon.