Heck, here's the whole damn thing! These people called the top in July.
Princeton NY Spot Gold Report for Thursday 11-05-1998
SHORT-TERM
Gold attempted to rally on Wed, but did nothing to alter the current bearish posture. Rallies falling short of 293.6-294.7 will be
unsustainable. The next area of support lies at 287.3. Failing to hold this level will result in a drop to major support at 283.3.
LONG-TERM
While Gold has been touted as the safe-haven that will shine with the first crack in the stock market, once again the hype has
fallen far short of reality. All things do come to an end, and Gold will surely have its day as well - it just might not come before
the year 2000. In the short-term, the demonetization of Gold will be bearish and could drive it down to the $190-$200 level by
early 2000. However, the more central bank selling that takes place, the less resistance we will see long-term once real demand
returns. For these reasons, we must be concerned that Gold might still decline sharply back to $199-215 going into early 2000
before any reversal in the long-term trend emerges. As long as a monthly closing back above $338.20 fails to unfold, Gold
remains very bearish going into 2000. A year-end closing below $342.50 will leave Gold in a bearish mode for the following
year and a year-end closing below $280.50 will ensure new lows next year as well. We also see the $326 spot level as another
key resistance point for year-end and potentially throughout 1999. Quarterly models are warning that if Gold cannot make a
new high above $314.70, than as long as this high holds intraday, there will be little choice but declining into the 2nd quarter of
2000 before a major low is established. Yearly models are now warning that without a significant rally above $342, Gold may
follow the course of its natural 8-year cycle with the next target objective in the year 2000. A low in 2000 will be finally
followed by a very significant 3-year reaction to the upside. A weekly closing below $278.40 on NY spot will signal that new
lows are indeed possible. Weekly models show support at $273.50 and only a weekly closing below $273.50 will warn that
the next break to $235 will develop.
Princeton NY Spot Silver Report for Thursday 11-05-1998
SHORT-TERM
Silver was rejected by the 508.0 daily bullish reversal and continues to sell-off. Major resistance stands at 528.5. Only a
weekly close over this level will shift our models into a positive mode. Support now starts at 484.0 and 482.6. Weekly timing
models show a temporary low may be in place as of last week with a sideways patterns until early Nov and perhaps a new low
for the year by the week of 11/23. As long as Silver remains below 528.0 on a weekly closing basis, then the potential to close
1998 below 415.0 remains high.
LONG-TERM
Our computer models continue to warn that Silver has made a 7-year high and as such this is the culmination of a trend and the
beginning of at least a 2-year correction. The Sept rally moved up to test our 5.47 yearly resistance and it has bounced off of
that level with a vigor. The global liquidation by hedge funds is having a negative effect in Silver since the majority were outright
long. We continue to focus on our yearly bearish reversal at $4.15 and a year-end closing beneath this area is likely to confirm
a drop to the $2.75-3.25 area. Technical support on the yearly level remains at $1.77-1.97. Such a move would perhaps be
possible perhaps if we see liquidation by Buffett, hedge funds, and/or Arab holdings in Zurich from the 1980's. We must be
very careful in this market. The outstanding positions among long-term bulls could become a devastating factor in SIlver. We
are in a liquidity crisis - not a flight to quality crisis.
Princeton T Bonds CBT Report for Thursday 11-05-1998
SHORT-TERM
Bonds sold off sharply, electing the 12709 daily bearish reversal and making new reaction lows. More importantly, Bonds are
now in position to elect its 12625 weekly bearish reversal. Bonds need to quickly rally from here to avoid an intermediate-term
sell signal. The next area of major suport lies at 12426.
LONG-TERM
Our long-term models still warn that the US 30-year bonds are capable of rising into 1999 to test the next yearly bullish
reversal at 15610 basis the nearest futures. We have been warning that our long-term models on the US 30-year bonds are still
indicating that we could see new highs extend into as late as 1999 before a bear market emerges. One last blow-off to the
upside would be indicated by a year-end 1998 closing above 12827, which would then point to extreme target objectives at
15618 or 16917. Technical resistance for 2000 stands at 17500, which would take US long rates back to the 1966 level!
These types of extreme targets are possible given the phase II of Japanese Big Bang, continued destabilization in emerging
markets and the question about the success of the Euro in the face of Russian turmoil. While a year-end closing above 12827
will warn of a very sharp breakout to the upside raising the possibility of a 1999 high, a more modest closing simply above
12210 would point to perhaps a more sustainable rally into 2000. In order to see an inverted pattern that would produce a low
in 2000 with a high in 2002/2003, the bonds must close 1998 at least below 11728 to place them in a neutral position. This
type of closing combined with a monthly closing under the 11617 area would raise the possibility that a major low could
develop for 1999/2000.
Princeton S&P 500 Index Report for Thursday 11-05-1998
SHORT-TERM
S&P's opened sharply higher, penetrating 1129.40 resistance. However, by the end of the session, the rally had fizzled and
S&P's were below the 3 weekly reversals at 1125.20, 1127.90 and 1129.40. A failure to close above these levels by Friday
will strongly suggest a high is in place. The prior resistance area at 1100.00-1108.00 will then become critical short-term
support. A failure to hold this area could result in a sharp conrrection toward 1073.00-1070.50 as a 1st leg.
LONG-TERM
The decline in the S&P met our 1st downside objective of 934.00 in October. Under the worst conditions and assuming a full
bear market decline into 2002/2003, perhaps the Dow Jones Industrials might reach 3805, which is where the yearly bearish
reversal resides. So far, basis the S&P500 Futures, we have elected 4 weekly bearish reversals down to 1001.00 leaving the
primary target at 934.90 and 844.00. Our first monthly bearish reversal at 1001.00 was also elected leaving us now focused
upon the next reversal at 844.00. Massive overhead resistance is now building at 1125.00, 1127.00 and 1129.00. Given our
yearly model's forecast that 1997 would most likely produce the highest annual closing with July 20th, 1998 providing the
intraday high, we must consider that 1998 may close below 979.10 at year-end basis the S&P500 Futures. Timing models
continue to show that a penetration of the Oct low would lead to a further decline down to at least 903.00-899.00. A low in
Jan could produce a 2-month reaction into Mar/Apr. However, a high in Jan would be followed by a low in Mar/Apr.
Princeton NY Crude Oil Report for Thursday 11-05-1998
SHORT-TERM
Dec Crude continues to hold above its 14.00 support, but Crude's trend is down and rallies failing to close above 14.95 will be
unsustainable near-term. Crude needs to close above 15.52 to turn the short-term trend up and suggest a retest of the highs.
System resistance stands at 14.69 and 14.95. Support begins at 13.83. A retest of the lows that holds above the 13.50 area
will expand a potential base for a more sustainable recovery.
LONG-TERM
We still see that a potential decline just below 10.00 is still possible before this bear cycle is complete. Yearly models are
warning that even a year-end closing below 17.45 will leave Crude in a vulnerable position suggesting that it too could decline
and complete its final low by 2000 before resuming back to the upside. At this time, only a monthly closing above 18.06 will
suggest that a major low is in place. A Sept reaction high suggests that Crude could turn back down and the next low might not
develop until Jan/Feb 1999. A failure to establish a low under 10.00 by Jan/Feb of 1999 could result in an extended decline
into April/May of 2000, which is starting to line up more with our yearly model projections. We do see that 1999 will mark the
beginning of a new cycle in volatility that should move into a major high culminating with a panic cycle in 2002. The major
support for Crude lies at our yearly bearish reversals at 9.81 and 9.55 followed by 8.80, 3.29, 3.14 and 2.90. Crude is
capable of penetrating the 1986 low of 9.75 yet still holding on a broad long-term basis. We do have a minor yearly bearish
reversal at 13.75, which warns that a year-end closing below this area will signal that this bear market could extend into 2000
before a reversal in trend appears. Weekly models show major resistance at 18.70 while initial resistance begins at 16.20,
16.30 and 16.97. As long as Crude remains below 18.70 on a weekly closing basis, then new lows are still possible. A weekly
closing above 18.70 will warn that a temporary low is in place. The main support lies at our quarterly bearish reversals at
(double) 13.25, 10.30, 9.81 and 7.06. This clearly warns that a quarterly closing below 13.25 will have dire long-term
implications.
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