After Lunch Afternoon Update

This is the After Lunch Afternoon Update. DOW went up, then down 99, then back up. Now the DOW is fractionally lower (by .15). Could get a reversal, which would be bad news for the bulls.

Gold is having a great day. Earlier in the day it flirted with nominal all-time highs of the $1,224-$1,225 area. That is the good news. The bad news, short-term is that this may be a potential short-term top. The chart I am looking at shows gold in a complex correction with a possible Corrective Double Top (CDT). That is, the orthodox top came in the Spring of 2008. Then the first $1,224 top and now this top could just be corrective double tops. And for this part of the move I am counting a completed five waves. If I can get that chart to you with my wave counts and trend lines drawn I will do so. My scanner is acting up on me...

I want to see a gold close into NEW all-time nominal highs by the end of the week. That would be nice. Last week's mini-spike in gold may have been an exhaustive short-covering rally, acting more like the VIX (fear index) than anything. It is possible that we may need to see that much panic in the stock market to take gold up another fifty to sixty bucks an ounce in short order.
Gold basically ran up from $1,125 to $1,225 in no time. Very impressive. I would say that that was foreshadowing to the next long uptrend in gold -- that will happen when the world's investors stay away from fiat currencies in droves and turn to precious metals. I think that that will happen by the end of the year. Probably September/October. That would then mean that the Last Great Buying Opportunity (LGBO) for Gold and Silver will come this summer.

If gold finds its way below $1,200 then a low in gold between June and July should find our favorite yellow metal closer to $900 to $1,000 an ounce. This scenario will occur once gold breaks below $1,200 an ounce with confirmation of Another Down Move (ADM) at $1,187.
But, if we get another panic crash in stocks then gold could rally up another $50 or so in hours so I wouldn't short the farm or anything. I like the gold bull's target prices of $1662 or $2,000 and higher. I actually think that long-term gold is headed for $10,000 -- but that might take awhile.
However, I don't see a paper gold price higher than $1,300 before we get a substantial pullback.

Ok, so we know that gold needs to hold $1,200 and that the easy money in gold was made last week until now. Gold is running on momentum, fear, and greed now. Which is an awesome combination, but if either of those three Axis of Mass Psychology fails then some air could come out of the gold price. Silver has also had a nice run-up -- but silver also outperforms the yellow metal at the end of precious metals runs. Now I wanna see what silver does at $20. If it hits it and turns down then that is bad news. If it reverses in the next few days without getting any closer to $20 then that is bearish. I would be bullish on silver if it ran up past $20 quickly. Then we will look at $22.50. Gold would be nearing $1,300 in that bullish scenario. But I think that chances of this happening are less than 50-50.

I will post a Rant on here soon. But I kinda want to see the close. Maybe it tells us something.
Maybe it doesn't. Traders are standing near the exits. What will happen if someone yells "FIRE!"?







da bear