Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold - Surviving The Last Few Months Of The Bear Market

Commodities / Gold and Silver 2015 Jun 09, 2015 - 10:56 AM GMT

By: Gary_Savage

Commodities

In my previous article yesterday I tried to stress the importance of getting to the sidelines before gold begins the final decline into its eight-year cycle low. Today I’m going to show you what I think is in store and why.

First off let me dispel any notion that this was a natural bear market in gold. On the contrary, this has been a manufactured bear market brought about by intense paper market manipulation by the bullion banks ever since Germany asked for their gold back. It’s been my theory for almost 2 years now that the bullion banks are trying to force the gold market as far down as possible in order to maximize the potential upside once the secular bull market resumes. It’s also been my feeling that the manipulation would continue until gold at least retraces back to the $1000-$1050 level, and we may, and probably will, get a panic overshoot for a few days below that level.


Let me explain. Let’s assume that on the conservative side the bubble phase of gold reaches at least $5000. Well if the final phase of the bull market starts at $1500 and goes to $5000 that is a 230% gain.  On the other hand if the bullion banks can artificially depress the price of gold to $1000 or even $900 then the potential gain increases to 400% or more. And if you think that’s some juicy profits wait till I get into what I think is going to unfold in the mining sector.

The next thing I need to show you is a long-term chart of the HUI mining index. Notice how the bottom last November got far enough to test the 08 lows. Also notice that the bounce off of that bottom has been extremely weak, signaling that this was unlikely the final bear market low.

08 bottom

I think I can say with a great deal of confidence the bullion banks have every intention of breaking through that support zone in the next couple of months.

A major eight-year cycle low is usually characterized by complete blind panic. That’s not what we saw back in November, and a pretty good indication that the 8 year cycle low did not form last year like many are hoping. Blind panic is what we had in 2008, and it’s going to be even worse this time because the bear market has lasted much longer and damaged investor sentiment to a much greater degree. The panic at this 8 year cycle low is going to be more intense than it was in 2008. During the final two weeks into the 8 year cycle low traders will be selling at completely irrational valuation levels simply because the emotion of fear is in total control and all logic will have gone out the window. This is the “blood in the streets” phase. I think this phase is coming sometime in the next 8 to 12 weeks.

HUI 8 YCL

I can tell you that when the support at 150 breaks we are going to see panic selling like we haven’t seen since 2008. The bullion banks are counting on this. Why? Because they want to buy at the lowest price possible.

Now if you think the percentage gain from $900 gold, or $1000 gold to $5000 is big, imagine the profit potential to buy the HUI mining index at 100, 75, or 50 for a ride up to 1000 or 1500.

The bullion banks are trying to manufacture an opportunity like we have never seen before, and they are well on their way to doing it. All they need to do now is break that support level at 150 and trigger the final waterfall decline.

Now you see why I stress the importance of being on the sidelines. Almost no trader in the world will be able to survive when that support level at 150 breaks and the panic begins. The bullion banks are counting on it. They want you to puke up your shares at the lowest price possible. We are talking in the neighborhood of a 30% – 50% decline or greater in a matter of weeks. A drawdown like that is emotionally impossible to weather. You have to be on the sidelines when it occurs. More importantly you have to understand what is happening, why it is happening, and be ready to take advantage of this once-in-a-lifetime opportunity.

I have my subscribers on the sidelines waiting, and I think with the use of cycles analysis and some intuition I should be able to call that bottom when it arrives within a day or two of the exact low. Those traders that are on the sidelines protecting their emotional capital are going to make the trade of a lifetime this summer.

The most important thing right now is to protect your portfolio and your sanity by getting out of the way of this final move down. If you get caught in the final bloodbath phase you are almost certain to lose both.

Gold should bounce a bit this week before continuing lower. I would suggest using that bounce to exit positions and get to the bleachers if you haven’t already.

gold bounce

For those of you that have gotten kicked off the bull, and killed by the bear, and want to make your money back I’m going to run a subscription special for the next week. 15 months for the price of 12. So for a normal one year subscription you will get an extra 3 months free. Click hereto subscribe. I will automatically add three months to your subscription.

Gold bugs your redemption is almost at hand. I’m getting close to calling the bottom of this 4 year bear market. We just need to complete the final move down into the 8 year cycle low.

Gary Savage
The Smart Money Tracker

Gary Savage authors the Smart Money Tracker and daily financial newsletter tracking the stock & commodity markets with special emphasis on the precious metals market.

© 2015 Copyright Gary Savage - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in