It Can’t Wait Any Longer – It's Deja Vu in the Markets

The stock market tends to repeat itself on a regular basis. Why? Because it moves mainly based on the emotions of market participants, with the exception of extreme times when the masses are moving the market with extreme fear or greed, at which point they are flooding the market with buy or sell orders to create a final pop or drop in the market just before a major market reversal.

As with everything in the universe, everything moves in cycles, periods of expansion and contraction, and there are regular wave like patterns that happen on a regular basis no matter the time frame one is reviewing on a stock chart.

Here are three charts, each showing a similar price pattern of extreme washout lows, followed by roughly a 1 1/2 month rally taking investors on a roller coaster ride from fear and complete panic to greedy "know it alls". In short [no pun intended] U.S. large cap stocks look and feel toppy here. I feel a correction is likely to take place any day now, and the big question is “how much will the stock market pullback? Will it be another 4-5% correction similar to the chart examples above? Or will it be something larger 8-15% correction?

Chris Vermeulen


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Here's What the Next Gold Bull Market Will Look Like

By Jeff Clark

We measured every bull cycle of gold stocks and found there have been eight distinct upcycles since 1975.
We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)
Even more enticing is that the biggest one—a 601.5% advance in the early 2000s—occurred just after a prolonged bear market.

And our current bear market is longer than that one.

To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks.

We can’t show you our entire portfolio out of fairness to paying subscribers. But look what those gains would mean to GDX, the Gold Miners ETF (based on the June 1 price).

Gold ETF	Current Share Price	1976– 1980	1982– 1983	1986– 1987	1989– 1990	1993– 1994	2000– 2003	2005– 2008	2008– 2011
		554.2%	205.1%	141.8%	51.5%	99.9%	601.5%	206.4%	272.5%
GDX	$19.49	$127.51	$59.45	$47.14	$29.53	$38.96	$136.72	$59.72	$72.60

Keep two things in mind about this table:

1. The percentage gain from each past bull market is calculated using an index. The stronger companies will perform better than a static ETF.

2. It’s not unreasonable to think that the gains in the next bull market will be similar to some of the higher returns listed above. That’s because stocks will be rising from the depths of one of the more severe bear markets.

Here’s what the price for popular royalty company Royal Gold would look like if it matched past bull markets.

Royalty Company	Current Share Price	1976– 1980	1982– 1983	1986– 1987	1989– 1990	1993– 1994	2000– 2003	2005– 2008	2008– 2011
		554.2%	205.1%	141.8%	51.5%	99.9%	601.5%	206.4%	272.5%
Royal Gold	$64.23	$420.21	$195.93	$155.34	$97.30	$128.38	$450.56	$196.79	$239.26

You might think royalty stocks won’t show similar gains going forward. It’s true they’ve already performed well. However, it’s more likely they’ll be wildly popular than anything else. That’s partly because there are only a few of them in this industry.

Now take a look at the prices our top silver pick would hit.

Silver Producer	Current Share Price	1976– 1980	1982– 1983	1986– 1987	1989– 1990	1993– 1994	2000– 2003	2005– 2008	2008– 2011
		554.2%	205.1%	141.8%	51.5%	99.9%	601.5%	206.4%	272.5%
Top BIG GOLD Silver Pick	$3.71	$24.27	$11.32	$8.97	$5.62	$7.42	$26.02	$11.37	$13.82

If silver rises along with gold in the next bull market—something we think is extremely likely—this small niche market will absolutely soar.

No other sector is as depressed as the mining sector. A return to anything close to some of the stronger past bull markets will hand us tremendous gains.

The June issue of BIG GOLD focuses on the top silver pick listed in the table. I’m convinced it will at least triple from current levels in the next precious metals bull market.

We have two very specific reasons why it will do so. And these two factors are unmatched by almost any other mid-tier or major producer.

Get our analysis along with the name of this stock in the just-released BIG GOLD.

We also include a special offer on bullion that has numismatic potential. These coins sell at bullion prices, yet will likely return much greater profit than standard bullion. And they come at discounted prices you won’t find elsewhere.

It’s “The Two Best Silver Plays to Buy Today”—a highly actionable issue that tells you exactly what to buy and why. Get it now.



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GOLD’s Elliott Wave Analysis Bear Cycle Coming to a Close in December

When it comes to the actual trading aspect in gold our trading partner David A. Banister Market Trend Forecast has been our go to guy. Very interesting what he is bringing us this morning.....Is GOLD’s Elliott Wave Analysis Bear Cycle Coming to a Close in December?


Our Last major Elliott Wave Analysis of Gold came in early September when Gold had touched the 1434 area, and in that analysis we called for a re-test of 1271-1285 levels. This was based on our Elliott Wave Analysis of the patterns involved since the 1923 spot highs in the fall of 2011. Our clients of course were updated on a regular basis since that public analysis and we have been looking for clues to a bottom in this Gold bear cycle from the 2011 highs.

Most recently, we noted that we are seeing patterns commiserate with what Elliott wave theory calls a “truncated 5th wave” pattern. All Bear cycles have 5 full waves to the downside from the highs, and we have been in wave 5 since the 1434 highs. The key then is determining how low that wave 5 will take you in Gold, and planning your investments and timing around that forecast.

To qualify for a truncated 5th wave, you have to have a very strong preceding 3rd wave to the downside. In this case, we had that as Gold dropped from just over 1800 per ounce to 1181 into late June 2013. As we approached the 1181 areas, we also put out a public forecast saying that Gold has indeed bottomed and should rally strong to the upside. Recently, Gold hit a bottom at 1211 spot pricing last week and that is when we began to consider a truncated 5th wave pattern.

We sent our clients about a week ago regarding this possible Elliott wave theory bottom:

If we fast forward a week later, we had Gold running up to 1261 which was the pivot resistance line we told our subscribers to watch for. We hit it on the nose and backed off to 1224 yesterday. We now expect that if GOLD holds the 1211 area, that we will again rally back up and over 1261 and then head to the 1313 resistance zone. We would like to see Gold get over 1313 and if so our targets are in the 1560 ranges for Gold in the first half of 2014.

Aggressive investors should be accumulating quality small cap gold producing and exploration, or Gold itself depending on your preference during these last few weeks of December as our Elliott Wave Analysis is signaling a bottom is near. We would again watch 1211 as a key level to hold for this possible truncated wave 5 to work out.

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Correction near but Bull Market has LONG waves to Go!

Are you using Elliot Wave theory in your trading? Today David Banister of Market Trend Forecast is laying out the Elliot formations in detail. Do yourself a favor and take a few minutes to make sure you are looking at this market through his eyes. Can any of us call the pull back exactly and reliably? No, of course not. But we should all be taking this into consideration.

The SP 500 has been on a tear as we all know especially since the SP 500 bottomed at 1343 several months ago. My work centers around forecasting using Elliott Wave Theory along with other technical indicators. This helps with projecting the short, intermediate, and longer term paths in the stock market and also precious metals. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs. At 666, we had completed a major cycle bottom with about 9 years of movement to retrace 26 years of overall bull cycle. That was a major set of 3 waves (Corrective patterns in Elliott Wave Theory) from the 2000 highs to 2002-3 lows, then 2007 highs to 2009 lows. Once that completed its work, we were free to have a huge new bull market cycle off extreme sentiment and generational lows.

It’s important to understand where we were at in March of 2009 just as much as it is today with the market at all time highs. Is this the time to bail out of stocks or do we have a lot more upside yet to go? Our short answer is there is quite a bit more upside left in the indexes, but there are multiple patterns that must take place along the way. We will try to lay those out for you here as best we can.

Elliott Wave theory in general calls for 5 full wave cycles in a Bull pattern, with 1, 3, and 5 bullish and 2 and 4 corrective. We are currently in what is often the most bullish of all the patterns, a 3rd of a 3rd of a 3rd. In English, we are in Primary wave 3 of this bull cycle which will be 5 total primary waves. We are in Major wave 3 of that Primary 3, and in the Intermediate wave 3 of Major wave 3. That is why the market continues its relentless climb. This primary wave 3 still has lots of work to do because Major wave 3 still has a 4th wave down and a 5th wave up to finish, then we need a major 4, then a major 5.

That will complete primary wave 3. This will then be followed by a Primary wave 4 cycle correction that probably lasts several months, and then a Primary wave 5 cycle to finish this part of the bull market from March 2009 generational lows… and all of that work is going to take time. Once that entire process from March 2009 has completed, then we should see a much deeper and uglier correction pattern, but we think that is at least 12 months or more away.

What everyone wants to know then is where are we at right now and what are some likely areas for pivot highs and lows ahead? We should complete this 3rd of a 3rd of a 3rd here shortly and have a wave 4 correction working off what will likely be almost 300 points of upside from SP 500 1343. We could see as much as 90-120 points of correction in the major index once this wave completes. Loosely we see 1528-1534 as a possible top and if not then maybe another 30 or so points above that maximum into early June. This should then trigger that 90-120 point correction, and then be followed by yet another run to highs.

We could go on but then we will lose our readers here for sure, and as it is… this is all projections and postulations, so it’s best to keep the forecast to the next many weeks or few months. Below is a chart we have put together showing the structure of Major wave 3 of Primary 3 since the 1343 lows. Once that Major wave 3 tops out (see the blue 3) then we will have Major 4, then Major 5 to complete Primary wave 3 since the 1074 SP 500 lows. Whew!



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