Close X Cookies are necessary for the proper functioning of By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
Gold & Silver Prices in
In the same category

The Beginning of the End

IMG Auteur
Published : April 05th, 2012
505 words - Reading time : 1 - 2 minutes
( 7 votes, 3.9/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...





As convincing as this rally has been I am confident this is an ending phase and not the start a new secular bull market. Actually the bear market began last year in May but was temporarily aborted by massive Central Bank printing. Let me explain.

The last four year cycle that started in 2002 and bottomed in 2009 was the longest four year cycle in history. It was stretched to these extreme lengths by Bernanke's desperate strategy of debasing the currency to avoid the bear market that should have begun in 2006. Instead the stock market cycle stretched all the way into the spring of 2009.

I have mentioned before that often a long cycle will be followed by a short cycle. This being the case the current four year cycle should have bottomed in the fall of 2012.
That process had begun last summer.

However, Central Banks around the world, in the futile attempt to avoid a global depression again cranked up the printing presses. The bear market that had begun in May was temporarily aborted. Amazingly I think we are going to see another stretched four year cycle. And this one is going to end just like the last one when the price of oil spiked far enough to collapse the global economy and create another market crash. The next economic downturn won't be a Great Recession; it will be a Great Depression.

At the moment the stock market is in a runaway move very similar to what unfolded out of the summer 2006 yearly cycle low. These runaway moves are characterized by uniform mild corrections all of similar magnitude and duration. For this particular rally the corrective size has been roughly 25-35 points. This could continue for weeks or months, but all runaway moves end in the same fashion, with a crash or semi crash that wipes out months of gains in a matter of days or even minutes.

Generally speaking, once a corrective move has run 20% beyond the normal correction size that is the signal that the move is over. Unfortunately, at that point you are usually already into the 'crash day'. This is why at some point one has to say enough is enough, and stand aside, or you risk getting caught in the crash.

When this runaway move comes to an end I'm pretty sure it will signal the beginning of the end for this cyclical bull market. That doesn't mean that we won't see a test or even a marginal break to new highs but I think we are clearly in the final phase of this liquidity driven rally that began in March of 2009.

We are now at the mercy of oil and the commodity markets. Bernanke's plan to print our way to prosperity is destined to failure. Ultimately he is just going to spike inflation and collapse the global economy, resulting in a worse downturn than what we saw in 2008/09.

Whether that breaking point is at $120 oil or $160 oil is anyone's guess.



<< Previous article
Rate : Average note :3.9 (7 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.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Slouching Towards Election Day
16:16The Recusant
In a few days we will be standing in those little booths to make a choice between bad and worse. Thank you, Donald for bringing the message to the ...
Slouching Towards Election Day
25 Octaccording
jimmy i know its hard to sell copy but try not to insult us without amuseing us. "They don’t recognize the basic energy equation that has...
Slouching Towards Election Day
25 Octkevthorne-1
WWIII will be a war as totally different from WWII, as WWII was from WWI - 'the Great War'. There will be no hiding place from the nuclear fallout...
Gold Market in Crisis, Risks Col...
25 Octrjs2248
Let the TRUE market value of precious metals come with the "Light of Day."
Trump’s Best Debate Performance ...
23 Octkevthorne0
A vote for that woman is a vote for WWIII. Mr Trump is a builder, not a warmonger - do you want a future on earth for you and yours - or Armageddo...
Silver Bull Market in Force
22 OctS W.
Interesting tech analysis here. Good stuff as I have never looked at 'full bars' closing above or below a 20 bar MA. Only ever the close p...
The Fascist Threat
22 Octsam_site
Your idea that extreme right and left fascism meet is brought out in the Spanish Civil War. The globalists created right wing fascism in Germ...
Trump’s Best Debate Performance ...
21 OctThe Recusant-1
Yes, this WAS his best debate performance! But for all the reasons you mentioned, he failed to deliver. And that's why he will be defeated next mon...
Most commented articlesFavoritesMore...
World PM Newsflow