Big Moves Coming in December, January & February

IMG Auteur
Published : November 26th, 2012
533 words - Reading time : 1 - 2 minutes
( 6 votes, 4/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Gold and Silver

 

 

 

 

Well how was that for the start of a new intermediate cycle? While many analysts were calling for continued losses or even a market crash I repeatedly warned traders that an intermediate degree bottom was coming and that markets routinely rally violently out of those bottoms, often generating 5-8% gains in the first 12 to 15 days. This particular intermediate bottom has already gained 5% in just the first five days.

As I've been saying all along, I think the market will easily make new highs in the next two or three months, possibly even significant new highs, or a test of the 2007 top as QE3 starts to work its magic.

That being said, stocks and gold are now due for a short-term breather. Why is that you ask, if all markets have just formed major intermediate cycle lows? The reason has to do with the daily dollar cycle. Friday marked the 24th day in the current daily cycle. That cycle generally runs about 18-28 days trough to trough. At 24 days the cycle is well into the timing band for a bottom and bounce.




That bounce should force stocks into a short-term correction, or sideways consolidation, and gold into its next daily cycle low.




However, don't be fooled by any short-term corrective move as stocks and gold have all clearly formed major intermediate bottoms. There are always corrective moves along the way, nothing goes straight up, but intermediate cycles don't usually form a final top until sometime around week 12-15. As last week was only week 1 of a new intermediate cycle, we probably don't need to look for a final top until sometime in February, or early March.

Coincidentally, that is when the dollar is due to form its yearly cycle low. A yearly cycle bottom is the most severe cyclical decline other than a three year cycle low (the next one of those isn't due until mid-2014). I think we can safely assume that QE3 is going to complete the head and shoulders topping pattern for this particular three year cycle, and just as I said months ago the
dollar topped back in the summer when the CRB index formed its final three year cycle low.




The dollar should now head generally lower over the next year and a half with brief bear market rallies similar to what we just experienced. This will drive an inflationary phase that should drive all asset prices higher into mid-2013, and commodities into a super spike in mid-2014 (this is when I expect gold to reach its next C-wave top at roughly $4000).

By mid-2013 inflation will start to take its toll on the economy, and stocks will stagnate and begin an extended topping process as inflation continues to surge, similar to what happened in 2007/08.




I think we will experience the same phenomenon this time as QE3 eventually generates the same unexpected consequences and spikes commodity inflation.




Traders need to be prepared next week for some kind of corrective move. Understand this is not the beginning of another leg down, but a second chance to get positioned for what should be a very profitable intermediate degree rally over the next 2-3 months.



 

 

<< Previous article
Rate : Average note :4 (6 votes)
>> Next article
Toby Connor is the author of Gold Scents, a financial blog with a special emphasis on the gold secular bull market. Toby's premium service includes daily reports and an extensive weekend report.
Latest topics on forum :
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
2018's 'Short' of the Year
23 Aprpearsallmarc
I really like the idea of this trade. Is there any way to execute this trade with long dated options (on SLV & GLD) or do you have to buy and s...
State of Failure
11 AprThe Recusant1
My, my...James's article almost sounds as if Trump himself might have gassed the people as a deflection and not Syria at all! Why...why...that's co...
State of Failure
09 AprGypsy
The STOCK MARKET trend has been DOWN. In fact, the word after Friday's Crash was "Standby for Monday." In a Moment of Severe Stress, the so-calle...
Flat-Earther FINALLY Launches Himself Into The Air, Crashes, Goes T...
05 Aprsirqitous
Seen realistically, however, this was money well spent for TPTB, even if they never get that loan repaid! As free advertising for the MSM cover st...
Flat-Earther FINALLY Launches Himself Into The Air, Crashes, Goes T...
03 Aprprljr
The really really really really unfortunate thing is that there are people and i use that word "people" lightly, are for no other explanation that ...
Flat-Earther FINALLY Launches Himself Into The Air, Crashes, Goes T...
28 Marprblmsolved
The really unfortunate thing about this story; For that kind of money he probably could have hired someone with access to a modern performance ...
Drums Along the Potomac
23 MarGypsy2
I see there's a HUGE market for Conspiracy Theories and FAKE NEWS in the U.K. ~ from the Top down. Theresa May runs her Conspiracy Theory up her f...
Drums Along the Potomac
18 MarThemis-1
While I, too, don't give a hoot about the Skripals, the UK cannot tolerate foreign agents running amok and potentially endangering innocent British...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS