Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Gold and Silver Stocks and Related Commentary -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (2211)	1/2/2005 12:52:20 PM
From: loantech	Respond to of 18308

Soros, Here are some long term charts from cycle pro. He thinks as do some others that we may be in a gold and silver bull run until 2013 or a bit longer: geocities.com geocities.com geocities.com CyclePro correctly used these cycles to pick the bottom of the "e" wave as depicted in the 2nd chart above. As such, CyclePro called the bottom on April 2, 2001 which was the next day after the lowest low had been made. Wave "e" also completed the larger (pink) wave "B". In the big picture, I see gold trading in a very large 3-wave structure of which wave "C" started in 2001 and should progress much higher, and well above the "A" wave high. Our current outlook is a target of $2000 oz with a possible brief panic spike near $3000 oz. The Elliott Wave outlook after completing the 5-wave series: a-b-c-d-e is usually followed by a very impulsive move in the opposite direction. This is what we are seeing in the current gold chart. While wave "C" will not move up in a straight line, the fact the we are currently in the timeframe for the 3-year up cycle suggest that a pause may be necessary. Is the pullback from January, 2004 to March enough of a pullback? The timing of the January peak is close enough, but the duration of the correction is probably too brief. The March second peak ($432) forms a double top formation. Also, because it is a better fit for the completion of the 3-years up cycle, this is a much higher probability to be the top that CyclePro was looking for. It is still possible that a higher high can be reached in the next few weeks, but from the viewpoint of a 25-30 year chart, a few weeks is almost insignificant. Also, I believe that the strength and reliability of the 3 & 5 year cycles has ended. I expect to see cycles form, but they are more likely to be skewed away from precise 3 years and 5 years. Further, I sincerely doubt that any selloff in gold & silver will get low enough to come close to test the April, 2001 low. If my Elliott Wave analysis is correct, then a breach of that low will not occur. As we discussed above, the stock market is extremely vulnerable to an extreme downturn (ie: a resumption of the decade-long bear market that began in 2000). As such, physical gold & silver may be vulnerable to a brief selloff if the stock market selloff is anywhere near a panic. Quality Gold stock are also briefly vulnerable. Lower-quality gold stocks should be largely viewed as general stocks and are more likely to suffer greater losses along with general stocks. In the big picture view, DJIA is expected to reach the 3000 area by 2010-2014 timeframe. At the same time, gold is expected to reach $2000 or higher. The DJIA/Gold ratio is expected to reach a low of about 1.5 to 1 (thus: 3000 Dow, $2000 Gold). The Gold/Silver ratio is expected to reach a low of about 16-20 (thus: $2000 gold, $90-110 Silver). Inflation should be well into double-digits and high quality dividend-paying stocks should be yielding double-digits. High-quality dividend-paying gold stocks should be paying double-digit yields well before the stock market bottom. The long term trading strategy remains unchanged... (this is my personal strategy) hold a core position of physical gold & silver until no earlier than 2010 and allow market conditions to dictate. These core holding will not be sold, regardless of what happens to the stock bear market over the next several years. An additional holding of gold & silver will be held but can be used for trading purposes along the way. The higher speculative holdings of lower-quality gold stocks will be scaled back to reduce the downside loss risk of a panic selloff in general stocks. Having cash on hand in this event will be a good thing. In the 2010-2014 timeframe when the core physical gold & silver is to be sold, the proceeds are to be placed into quality high dividend-paying stocks and long-term bonds. This is a good strategy for setting up a retirement fixed-income stream. The stock and bonds will generate income while the market value of the stocks should rise as the general stock market recovers, further increasing the overall net worth of the strategy. geocities.com