Da Bear Rant: May Edition Part 1

Da Bear Rant
May Edition
by da bear


Congrats to gold! New all-time nominal highs! Which is very fun. Shoulda broken out my
"GOLD $1,225!" hats but I left mine at home... The See 'n Be Seen bug is showing gold at around $1,231 so the run-up the past several trading sessions has been absolutely breathtaking. Gold was at $1,125 not too long ago but then Greece happened again and Stocks Crash happen again. And gold bounced. GOLD is the investment for people who think that VIX is a vapor rub. GOLD is the investment for people who think that OIL is just a little too slick. Gold is the new money. If it is not the new money yet at least the ghost writer to Addison Wiggin's new book is writing the forward for MEET THE NEW MONEY. SAME AS THE OLD MONEY. as we speak. Speaking of which, Wiggins (aka the 'Wigginator') last book The Once And Future King or Money or something was borrowed from one of the old Daily Reckoning forum posters methinks, if I am not mistaken. Well, the future is now here, or it is on the way. And gold is king.

Silver had a very nice day today as well. Silver up over 80 cents. Last Friday it was up close to a dollar an ounce. So the precious metals are in mini-blowoff mode. Which is exciting. Usually what happens at the end of P.M. runs is that silver's gains in percentage terms outpaces those of gold. And that is what is happening now. Which either means that the run is nearly over, or if it is not over then the precious metals bullish run is running on Only Momentum, Fear, and Greed (OMFG!). So now I wanna see $20 silver taken out like a blonde floozie cheerleader on prom night. FAST. AND. HARD. Likewise, I wanna see gold maintain its momentum, gaining at least 9 or 10 bucks a day. Otherwise, the gold bugs could become exhausted. Gold could pull back some, but not too much. Gold above $1,200 is bullish. Below that I would get worried. Below $1,187 I would get more worried. Well, not really. What that would tell me -- what a weakening in the paper price of gold would tell me -- is that we can all back up the trucks at nominally lower physical gold prices. Like $1,000. Or $900. Which would be nice. As I posted on this blog earlier today, gold could very well run to $1,300 and still be within the confines of a bear market of cycle degree that began in the Spring of 2008. For gold to hit the lofty level of $1,300 I would believe that gold will have to close above $1,250 within the next 8 to 13 trading days. See, it's a momentum run now. What if some hot money wants to leave? What if the dollar rally starts to spook gold bugs? Maybe they wanna take some money of the table (so they can put it into cash. LOL. Great idea there, Cash for Money! Turn in your 'real' money and get 'fake' paper money -- at 38.2 cents on the dollar no less... but I digress) and shove it under the mattress.

Anyone who manufactures penny banks that are fitted only to take Silver Eagles will make a mint...

The dollar is running up nicely. Now it is above 84. Should run to at least 90. I am gonna say that it goes to 100. Well, after that it goes to about 50, but hey, before that it is gonna go to 100!
So there. There is your temporary bull market in paper fiat currencies.

"There's always a temporary bull market in paper fiat currencies! My job is to help you find it!"

My thinking is that hot money will hop into the US dollar aka the paper front of the Federal Reserve Note shadow monetary matrix, and perhaps siphon money out of either gold/silver or oil/nat. gas. This will happen to gold/silver if either $20 SILVER fails to hold or if GOLD breaks below $1,200. If the metals hold up then oil and nat. gas will fall. Hey, here is a point about fundamentals. Huge oil spill should be bad for the price of oil, well if this was 2007 or the summer of 2008 (basically anything that had any remote, tangential application to oil was bullish for the price of oil), but now this kind of news gets barely a bump from the bullish oil shills. Where are you now Bush-Cheney???? ... oil will go down until it gets to be a relative bargain for summer driving season. where is that? who knows? Maybe I will send an email to Hank Kissinger. He should know!!!!! ... last point on oil. Someone on the inner-nets mentioned that oil may have found the price that put the finishing screws on the consumer. I would think that he is right. Happened in the summer of 2008...

Here is the chart of gold that I have been looking at. I have a wave count for it so if I get my scanner working I will post it here or something.

link: http://jsmineset.com/wp-content/uploads/2010/05/May1110Gold.pdf

Ok. Let me explain this chart. On the far left is the $1,219 high. I would argue that that is a corrective high following the Spring 2008 orthodox high for gold. So that would be the B wave high. Then you have a five wave correction into the $1,040 low. I would count this five wave decline as an a-b-c-d-e decline. That would be the C wave low. And if you remember the A wave low into November of 2008 was around $690-$700ish. So the C wave low was quite a bit higher. Ok, so off that C wave low you get a nice bounce up to about $1,140-$1,146. I would count that as wave 1 of D up. (D waves are the bastard children of the Elliott Wave cult. Actually, the bullish bastard children -- which would make E waves the bearish bastard children of the Elliott Wave cult. Yeah, check out that in wiki or something. I have a copy of an old Prechter book that explains it. I will copy said section verbatim here. At some point. Kinda feel lazy this week.) Then you get a wave 2 down to $1,080. That's a two. If I am a two I am saying to attack the defender and drive right into the paint. Wait, sorry, I just channeled Hubie Brown for some reason... Then gold rips the face off the Gold Men Shorts and rallies to $1,168.50. So that is wave 3 of D. Then the minor a, b, c correction into $1,120 or so. That there is your '4.' I think it was $1,125. So yeah now gold is at $1,231 or so. That is your wave 5 of D. But I am basically counting five waves off the '4' low and the channels have been hit on the upside so this run is near over unless momentum carries it forward. $1,187 to $1,200 are the short term support levels to watch for. Ok, after wave D is over then we get a Wave E decline. Could be higher highs. $1,146 looks good. Once wave D is in place, CYCLE II is over and CYCLE III up is here. Could happen as early as late July or as late as early September. What about August? Fuck August, I just wanna go to the beach...

Ok. This concludes Part 1.
Part 2 will come out tomorrow.
I will post this part of da Rant (Part 1) on da board tomorrow.

Next up: Stocks. tomorrow and beyond. HINT: FAT FINGERED BULLS told to lose weight. bulls losing momentum. hard to stop a bear going full steam.

Finally, wow! A Da Bear Day today. A Da Bear Day is one where stocks decline and gold and silver rise with silver rising more in percentage terms. Full-fledged da bear day with the dollar up and oil down too.









da bear