Thursday, May 12, 2011


Despite my bias to see new all time lows in the dollar index, I think the dollar probably put in the three year cycle low last week. Sentiment at the time had reached multi-year lows and as of yesterday the dollar had moved back above the 50 day moving average.

If I'm right then this should usher in the next deflationary period just like the rally out of the `08 three year cycle low signaled a coming recession, the next leg down for stocks in the ongoing secular bear market, and a collapse of the CRB into it's 3 year cycle low.

This should also drive gold down into it's D-wave decline. Yesterday the miners made a lower low and this morning silver made a lower low. It's probably only a matter of time before gold breaks below the $1462 pivot. That would confirm that gold is now in an intermediate decline and this late in the C-wave that would almost certainly turn out to be a D-wave correction.

The good news is that sometime in late June or early July we are going to get the single best buying opportunity we will ever get for the rest of this bull market.

At this point the goal is to preserve capital and get to that major D-wave bottom with plenty of dry powder.


  1. LOL that's what the dollar bulls said back in mid 2010 when I said the dollar was going to crash into a major low in early 2011 also.

    Those guys are no where to be seen now are they?

    If you understood how these cycles work you wouldn't get caught by these major turns, you would be expecting them.

  2. THIS is what I've been waiting for since last year, due in part to this blog and others. My only question is . . . how low will it go? Even if you miss some of the timing, the coming lows will be excellent, excellent buying opportunities for PM's.

  3. Gee Whiz Gary, youze is weally smart. Let's see if this GUESS pans out any better than this ancient relic you penned some 9 whole days ago.

    After what should be a brief pause this week commodity markets will move into the greatest rally of the last decade. As usual I will stay focused on the precious metal markets. They have been the leaders during this entire move out of the `08 bottom and they will see the largest parabolic move of all commodities during the final leg up.

    I've noted in the past that consolidation size is usually a good leading indicator of how large the following rally will be. Gold just consolidated for 5 months. That is going to produce a massive rally. It's already produced a large move and it's just started."

  4. Yep certainly missed that one. I was expecting the dollar to have one more leg down and break the 08 lows before putting in the three year cycle low.

    Win some, lose some.

  5. Gary

    how can you be certain that you were wrong and are now right. if you ignore the mad silver market, gold pretty much did what you said it would, so why change your opinion so completely

  6. Hmmm... exact opposite of my analysis. One of us will be right, I see a major rally over the next 2 1/2 weeks in gold that will propel it to new record highs. Then one last sell off in June before the major bull. If you look at the 10 year "Big Picture" Gold has broke above its 45 degree angle of ascent on a monthly closing basis (April) Has now back and tested this breakout and is short term over sold. We shall see.

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  8. The USD has been rallying for a while now and Gold has not made any new lows since the start of the USD rally. When this dollar rally ends, as I think it will soon, do you think gold will still move lower?


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