Da Bear Rant  
Da Cember Edition  
 
 
There was a broad based rally today at the corner of broad and wall as the powers that be cornered the shorts and stonewalled market justice. In other words, just your typical boo-ya bull crap. But it wasn't all bad for the contrarian cynical investors out there among us. Gold did ok. On Thursday the yellow metal to beat all other yellow metals (is there another yellow metal? if there is it would look odd), finishing the day near $800 an ounce mark. so apparently the One 800 (dollar) Gold Bull is still hanging tough.  
Stocks had a huge up day, but even the dollar was up. Leave No Market Left Behind Day just left behind us.  
 
At the beginning of the week, i did a poll (many are called, few do polls, most people usually hang up) about where gold would be by the end of the week.  
 
here are the results:  
What will gold do this week?  
Go up.  
32%  
32% [ 8 ]  
Go down.  
32%  
32% [ 8 ]  
Stay the same.  
36%  
36% [ 9 ]  
 
 
 
one more person said that gold would go up this week, but the vote was just about split. dare i say that this board is smart, savvy and understands markets well. i bet that if i did a poll of your typical wal-street traitors, similar results would no doubt show up...  
 
as i have mentioned before gold had a great run-up a few months ago after it broke out of the critical $666 an ounce price range, which i had commented on, and promptly went up nearly 200 dollars--nearly in a straight line. then gold hit $846 an ounce which was in spitting distance of its 1980 all-time nominal high. then gold corrected (see my Gold Topping thread by searching through the archives) to $782 an ounce, went back to $820 or so, sold off some more again, and as it stands is at $801.30.  
 
looking at a short term chart, gold has come a long way fast. looking at a five year chart, gold has made a nice five wave bull market advance. so a short term correction here which would put pressure on the weak hands and doubt-a-bulls would be a nice way to set the stage for the next stage of this secular gold bull.  
 
on a long term chart it looks as if gold possibly made a double top meeting its 1980 nominal high and apparently backing off. so its 27 years later. which is a long time. but in a great bear market after the stock market crash of '29, it took 25 years to recover its old highs. so this could be par for the course. of course, stocks didnt go in a straight line after that but it damn well went up for lots of time after that.  
 
Bobby Prechter has said that the stock bear market of the thirties and beyond did not really end until 1949, that the upward advance off the 1932 lows was still in the bear market channel i guess, and only went beyond that after 1949. well that was 20 years after the high. so you could say that 20 or so years later was when a new gold bull was being born.  
 
however, this gold bull looks back asswards. the first decline in twenty-nine was short and fast and horrible, then it based for a long period of time. this time in gold perhaps the long way winding down will now be the first part of the bear with the run since 2002 being a simultaneous secular gold bull and also a way to put the finishing touches on the old gold bear. so, after this top we could see a short and fast and horrible correction that would be a sharp bear and set up for the real big mega bull leg for gold.  
 
in other words. the sharp A wave down in stocks was '29 then the '30 B wave upwards correction (suckers rally) then the long C wave down that didnt end until 1949.  
 
... and for gold the long wave down in the bear market was the A wave from 1980 to 2002, the B wave is currently ongoing and near and end, and the sharp C wave down is coming up...  
 
so am i saying that gold is both in a secular bull market (wave 1 of the new bull with wave 2 coming up) and wave B of the old bear market (with wave C coming up)? yes. does that wave count exist as of now? i doubt it. but it will when all is said and done!  
 
downside targets are still a maximum of $450, a likely target of $550 which was last years low and the spot of my great buy gold thread, or the $666 level which has been a critical price level for gold over the past year or so...  
 
so we are due for a cyclical downturn that will be a wave 2 if you are counting the new secular bull or a wave C that would put the finishing touches on the old bear. it depends on if you are glass half full person, or a glass half empty person. but either way your glass is made of gold and you are drinking the kool-aid and the kool-aid is good!  
 
so the next correction would be gold's 1987 event, a quick bear that would separate the first stage (1982 to 1987 for old stock bull, 2002 to 2007 for gold) from the second stage (1987/1988 to 2000 for old stock bull, 2007/2008 to 2020 for new bull market). so that means we have a long way to run. 2020 means 13 years more to go (or more).  

- da bear