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The 5 year massive bull run in Gold and Gold Stocks continues

by: Dave Banister- TheMarketTrendForecast.com

Last August I penned an article predicting a massive five year bull run in gold and gold stocks.  I outlined my reasoning and compared this 13 year period from 2001 to 2014 to the tech stock bull from 1986-1999.  .

In February of this year, I again wrote an article for Kitco.com explaining the 13 year Gold Bull still had a lot more room to run.  At the time Gold had pulled back to 1040-1070 windows and I mentioned that “smart money would be accumulating” and we should look for $1300-$1325 as the objective.  That brings up forward to October of 2010, with Gold running to $1350 as recently as this morning.

We have a huge rally because we are in the 2nd year of this final 5 year run I predicted, and this is when the general investing public becomes “aware” of the bull market.  They miss the first five years from 2001-2006, and then while we consolidate for three years from 2006-2009 they fall asleep.  It is not until Gold breaks all time highs that people wake up and start buying.  This is typical in a super bull cycle, the behavioral patterns are always the same with the herd.  I based my forecast on herd mentality, whether bullish or bearish.

I am now looking for Gold to continue to run during this trampling into the asset from the herds of investors to about $1480-$1520 on this leg before we have a strong correction. That figure is not taken out of the thin air, it’s an Elliott Wave based pattern that I recognize and forecast in advance.  Subscribers to my website are exposed to my outside the box forecasts on the SP 500 and Gold all the time.  Usually it starts with them not believing, and later they wonder how I arrived at the predictions. To wit, on August 30th I predicted a huge breakout in Silver to $26-$29 per ounce when it was at $18.75 per ounce.  This was purely based on the Elliott Wave pattern and the lack of awareness by the investing public at the time of the Silver bull.  It is also “poor man’s Gold”, and as simple as that sounds, it is what drives the herd of investors to invest. Look for Silver to continue higher to those target zones before correcting.

Many investors who are briefly exposed to Elliott Wave Theory assume that a certain well known forecaster must be the only person in the world who uses it.  Since he is wrong more often than he is right, people toss out Elliott Waves as mad science.  That is a mistake and why I continually write articles for Kitco using my Elliott Wave methods to forecast SP 500 and Gold moves in advance.  Look for Gold and Gold stocks to continue powering higher than people can imagine over the next four years, and pick up some darts and throw them at some juniors while you’re at it.

You can check out our forecast service at www.MarketTrendForecast.com, consider subscribing ahead of our rate increase as well. Best to you and your trading!

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More Forensic Evidence of Gold & Silver Price Manipulation

The following is a summary of an article that was taken from Market Force Analysis’s website where they did a simple linear regression comparing gold and silver for the past 7 years.  The study has definitely confirmed what most traders have known for these past few years…that gold and silver were heavily correlated in these past 7 years, but the data also brings up suspicion that this relationship between gold and silver is actually heavily algorithmic due to the high r-squared of > 0.91 for the past 3 yrs and an r-squared of 0.96 for 2003-2008…almost perfect correlation for two metals that have different functionality and market uses.  It’s a heavily programmed trade that does not correlate the fundamental pricing of the commodity itself, as both metals are heavily “suppressed” by the industry’s heavy algorithmic trading schemes. The regression below displays the cross-plot between silver and gold.  The black line is from 2003-2008 and the green line is from 2008-2010.

Figure 1: Cross-plot of Silver versus Gold 2003-2010 (from More Forensic Evidence of Gold & Silver Price Manipulation by Adrian Douglas of http://www.marketforceanalysis.com)

The current trend that we are seeing in silver might be a first sign of de-leveraging (well, actually de-correlating) from gold, and might finally make for a better trading opportunity than gold.

Read the article here.

Japan Intervenes in the Japanese Yen Currency First Time in 6 Years!

A big news this Tuesday night (here in CA) and Wednesday morning elsewhere in the world, the Bank of Japan directly intervened in the currency markets, selling Yen to stop the Yen’s rise that’s hurting their trade and thus economic recovery.  Reuters said:

” The dollar extended its gains after intermittent yen selling and was up 2 percent on the day and nearly two yen above a 15-year low. But it was unclear whether Prime Minister Naoto Kan’s government had the stomach for a prolonged campaign similar to Japan’s last foray into foreign exchange markets in 2003-2004.

Finance Minister Yoshihiko Noda confirmed the intervention, saying Tokyo was also communicating with authorities overseas but indicating that Japan acted alone.

U.S. officials at the Federal Reserve and the Treasury declined to comment immediately about Tokyo’s action.

Noda would not say whether the authorities were buying dollars in the first intervention since March 2004, but two traders said the Bank of Japan appeared to have bought dollars around 83 yen at the start of the action.

The Bank of Japan acts on behalf of the Ministry of Finance in currency intervention.

“We will take decisive steps if necessary, including intervention, while continuing to closely watch currency market moves from now on,” Noda told reporters at a hastily arranged news conference.

The dollar had hit a 15-year-low at 82.87 yen earlier in the day but was at 84.78 yen by noon.

Prime Minister Naoto Kan’s government has been trying to talk down the yen but until Wednesday had stopped short of intervening in the markets, apparently worried that acting without Group of Seven partners would not be very effective. “

This is bound to cause big waves in trading around the world on Wednesday.  Raymond Anselmo, aka @RiskCap on twitter & Forex moderator on Hamzei Analytics’ HFT, tweeted this chart of the USD/JPY currency pair (and that is why traders should always use stops! talk about in-your-face-ness…):

A Lesson on Gaps And Homework

It is good to be blogging again. I miss doing it because it is a great way to keep a trading journal. The market has been very difficult to trade this year as we all know. However the opportunities are there if you have patience to wait for the set ups and the fortitude to pull the trigger when the trade set up in your favor. Today was especially difficult being the day that we rolled out of the September contracts into the December. Usually around noon we will see the new month get the majority of the volume but today was not normal due to the fact that the trading was thin all day.

I just wanted to stress the importance of doing your homework every night. Your homework is so important you have to know where we are so you can plan your trades accordingly. If the ES or any other trading instrument for that matter is trading at the bottom of a range or at support and it gaps off of that level, that can be a positive. It shows there are more buyers then sellers and the buyers drove the ES higher right out of the gate. If the gap holds, all the better. That happened two times at the bottom of our range just recently. However Thursday am we gapped up into resistance and reversed immediately.  You have to know where we are so you can give yourself the best opportunity to make smart trades.

Right before the open the pre-market ES December contract hit a high of 1107.  Monday ES put in a double top high of 1106.50. On the open the ES open high was 1106.50. This is the area I wanted to short because it has been 60min RTH (Real Time Trading Hours) and Globex resistance all week. Could price continue up, sure it could, but the probabilities up there favor the short.

I am basically documenting my trading here for my own benefit but I hope it may help new traders realize that you can succeed in this business if you have good risk management and discipline. Also you will blow up accounts it is part of your tuition and it has happened to the best traders out there. I try to keep it simple because I only work off of 1 monitor and I wear my mouse out. Every night I take a look at the markets form the outside in. Meaning longer term into shorter term charts. I Look for the support and resistance areas noticing what price has done at these levels and if the indicators line up for me I have confidence in my system and pull the trigger.

Trade well my friends.

Intel Continues it’s Buying Spree with Infineon’s mobile unit for $1.4 billion

Within 2 weeks of offering to buy the major antivirus software maker McAfee for $7.7Billion, Intel (INTC) is on the prowl again, announcing to buy the German chipmaker Infinion’s wireless (mobile) unit for $1.4Billion:

From Reuters:

Intel will buy German chipmaker Infineon’s wireless unit for $1.4 billion, enabling the U.S. chipmaker to boost its presence in the smartphone market.

The cash transaction is expected to close in the first quarter of 2011 and the mobile unit will remain as a standalone business, the companies said in a statement on Monday.

Three people familiar with the matter had told Reuters on Friday that Intel and Infineon would likely reach an agreement on the business’s future within the next few days.

This is the second major deal for Intel within two weeks after the company announced its $7.7 billion offer for McAfee Inc on Aug 19, its largest acquisition, bolstering the appeal of its chips as it tries to expand further into the mobile market.

Intel’s Atom mobile chips took the low-cost, no-frills netbook market by storm but are rarely found in smartphones where other chipmakers dominate.

Full Article: http://www.reuters.com/article/idUSTRE67Q3J820100830