Monday, October 25, 2010


I've stated before that I expect this secular bull to continue until the Dow:gold ratio drops to at least 1:1. Considering how much further the ratio stretched on the upside (42:1) than any other time in history it's entirely possible that we could briefly see gold become more expensive than the Dow.

As it pertains to the current C-wave I want to point out that we still haven't even seen the ratio hit new lows yet. Every C-wave so far has managed to drive the ratio to new lows before topping.

The current C-wave still hasn't accomplished that goal. I'm confident it will eventually. Possibly even driving the ratio down to 6. If we assume modest new highs on the Dow of 12,000 we could be looking at $2000 gold before this rally tops (probably next spring).

It looks like we are going to form the swing low I mentioned in my last post this morning so the odds are now high that gold has put in the daily cycle low and the short term correction has run its course.

If one doesn't have a position it's probably a good idea to get one and if one was waiting for a pullback to add to positions it looks like that's all we are going to get.

Depending on how the dollar reacts and how long it takes to reach the 74 pivot will determine how far and how aggressive the next leg up will be.

I will elaborate in tonight's update for subscribers.


  1. If the Republicans can win enough seats in Congress, is there any risk that it impacts gold's daily cycle

  2. Why would you think a republican house would have any effect on gold. The first 8 years of the bull market the government was conttrolled by republicans.

  3. I guess the damage is already done to the dollar

    I'm wondering if Ben will fire up the presses because of a Republican win.

  4. Toby I think they've got a sneak attack sell off coming here and there's something about the post election period of time from Nov 2nd to around mid to late November that's got me a little uncomfortable. I think what we've got on our side here is a market that feels very resilient and strong so these takedown attempts just aren't getting the momentum they used to. But.... Do you see anything in the wave/cycle charts or patterns that could be dangerous in terms of the timing of this period after the elections? I swear everybody's talking about this being where the metals get into trouble. I'm probably just going to hold on and not get shaken off. Maybe it will just be a non-event. What do you think?

  5. Gold isn't going to top until the yearly cycle in the dollar bottoms. It's still too early for that bottom. We should have at least one more daily cycle down potentially into the last week of November before the dollar bottoms and gold tops.

    This is the period when the largest declines will be had in the dollar index and gold will mirror that be moving into a massive parabolic move higher.

    My guess is the dollar will test 71 within the next 5 weeks.

  6. Toby,

    I may be wrong, but I thought that you felt that the Dollar would get down to 71 next spring? Or was it that yo thought it would BREAK 71 and bottom in the spring somewhere down in unknown territory?? I would definitely then expect gold to go parabolic when the supports for the dollar are taken out. thx

  7. Well Toby.... It's just about confirmed that there has been a concerted effort to manipulate and suppress precious metals prices. Key up "CFTC's Chilton raises alarm about silver market". I'm thinking somebody's goose is just about cooked. Are you a believer now?

  8. I've still never heard a logical reason for why the fed or government would want to manipulate gold or silver? Until I do I'm going to ignore all these nonsense conspiracy theories.

    Hell if the government felt the need to maniplulate something why not the price of oil. That is what will bring down the global economies not the price of a shiny metal that is virtually meaningless as no currency is even backed by it anymore.

    I suppose this makes for great shock and awe news to draw in indignant gold bugs but no amount of manipulation will change or even slow down the bull market.

    As a matter of fact any force that depresses price below the natural market equilibrium will only accelerate the move as it will increase demand.

  9. Well Toby the news of the day is that it has been discovered that manipulation of the silver market by JPMorganChase and the crew is all but obvious. This activity has been scoffed at as conspiracy theories for a long time but I have always believed in it. I guess there's a natural tendency for people to say "Nah... That's just a conspiracy theory!" Maybe people are just conditioned to believe like this, but I just wish people would be more suspicious. Why would they manipulate the price of the metals? Think about the way guys like Larry Summers and Rick Rubin think, and you'll get some answers. Toby they control everything and the main driver pushing the metals higher is because the gig is up and large buyers are demanding physical delivery. Why manipulate and suppress prices? Confidence in the fiat system. Oil is a different market and keep in mind there are much more connected big players in that arena who have stronger grips on world governments. The last thing the master planners want is every American pulling their money out of the bank and buying physical gold and silver with it. This would be the end of their plans and return the power to the people. The fiat system is a system of control and without it many political views would not even be possible. Control of the metals is a vital part of their strategy to make sure more people don't wake up and start to understand that they've been enslaved with monopoly money. Remember.... Fiat money being issued to us allows someone else to tell us what our monopoly money is, what it is worth, how much we can borrow, etc. How many more generations of people around the world will allow themselves to be robbed like this? Let the gold and silver revolution begin! I hope more information comes out soon regarding this so that we can get the final story once and for all!

  10. All I've seen is a story that an investigation may be forth coming. that's hardly proof. Show me irrefutable proof that the trend of silver was successfully altered.

    Hint you won't be able to since silver is in a bull marekt and going up. In a successfully manipulated marekt that shouldn't be possible.


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