Tuesday, November 24, 2009


Gold is setting the stage for what I expect will be an incredible move into late spring.

Gold is now in a fairly strong momentum phase of this C-wave. A small percentage of the public is starting to take notice. Everyone in the investment community is obviously aware of what's happening.

Now let me show you a weekly chart.

At twenty weeks gold has now rallied longer than any other intermediate leg of the entire bull market. Usually this cycle rarely lasts more than 20 weeks. The current long cycle was set up by the preceding short cycle. Have no fear this cycle will top and roll over.

Actually it's critical that it do so. Gold needs to wash out the euphoric sentiment that has now taken hold of the precious metals sector. All the late comers, especially the small percentage of the public that is starting to stick a toe into the water need to get washed back out of the market.

A sharp correction into the now due intermediate low will reset sentiment. Hopefully the correction is sharp enough to turn sentiment pessimistic. I'm starting to hear stories in the media about the gold bubble. A correction will confirm that theory for the gold bears and shake up the gold bugs.

However the consolidation from March 08 to the recent breakout is way too massive for the C-wave to be ending yet. So once the intermediate cycle bottoms gold is going to head higher again. All those players that got knocked out of gold during the correction are going to start questioning their decision to sell. Once gold starts making higher highs those players are going to come back into gold.

As I've said before all the energy bulls are going to start jumping ship and move that hot money into the precious metals market. Heck they've already started to do that now. But it's really going to crank up during the next intermediate cycle.

A much greater percentage of the public is going to notice and jump in as the second stage of this C-wave matures. (They of course will lose huge when the C-wave tops and rolls over into the next D-wave decline)

The end result is going to be a momentum move that is going to make the current rally look like kids stuff.

I expect we will see gold rally 50-80% from the bottom of the correction to the top of the C-wave and I expect it's going to happen in less than 4 months.

Now all we are waiting on is the correction that will separate the first phase of this C-wave from the second and set the stage for what will be the the most incredible rally of the entire bull market.