With the sharp recovery in the past few weeks, some analysts have declared
that the gold bear market is over. I would love to agree with that had I not
lived and invested during the last major bear market in gold and gold stocks
from 1981 to 2001.
There were a few sharp rallies but unless you bought and sold with
flawless precision, it was a long and heartbreaking 20 years for most gold
investors.
Here is a closer look at gold during that long and hard 20 years. Those
who made money in gold, please raise your hands.
The recovery rally so far is only 20%, and bears (no pun intended) no
signs of a new bull market unless/until
#1 - speculation according to COT data has returned to bull market values,
and
#2 - the 2015 high near 1300 is exceeded to the upside.
Summary
Gold sector is on a new major buy signal according to our proprietary trading
model, therefore, opening up the opportunity of a new bull market. However,
COT data remains in bear market values and is now at levels of previous tops.
I remain patient and wait for confirmation, which is when speculation
according to published COT data has returned to bull market values, and the
2015 high in gold prices near 1300 is exceeded to the upside.
Jack Chan is the editor of Simply Profits at
www.simplyprofits.org, established in 2006. Chan bought his first mining
stock, Hoko Exploration, in 1979, and has been active in the markets for the
past 37 years. Technical analysis has helped him filter out the noise and
focus on the when, and leave the why to the fundamental analysts. His
proprietary trading models have enabled him to identify the NASDAQ top in
2000, the new gold bull market in 2001, the stock market top in 2007, and the
U.S. dollar bottom in 2011.
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All charts courtesy of Jack Chan.
