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To: Jim McMannis who wrote (914)	9/10/1998 3:49:00 PM
From: sea_urchin	Read Replies (1) \| Respond to of 81867

Jim : The Toms (Drake and Byron) are the "professional cyclists"! I was just interested in your opinion about the graphs. In my opinion, the reasons why a market does anything are always found afterwards . Everything is always discounted --- well, almost. In the present instance, all the markets were simply far too high and too speculative --- they all had to come down. When they did, reasons were found. And, as it see the markets, the show (debacle?) has only just started. The realization of world bear markets is only now becoming apparent. And, I am sure the Abby Cohen myth, that the US markets can resist what is happening elsewhere, is now seen for what it is. In fact, I believe the downside will be greater, of longer duration and more painful and most people realize now. What the given reasons will be when the Dow is at 6000, 5000 and, possibly, 4000 is anyone's guess! And, I'm not trying to be sensationalist by saying this --- a 50% fall from the market tops is conceivable in all the markets --- not only in Russia, Asia and South America. Accordingly, there will be massive destruction of "capital" --- or whatever one calls stock-market paper values. Unless, there's some reason for printing enormous amounts of money --- like a war! The melt-down must have a ripple-effect leading to institutional, bank and brokerage insolvencies etc. Like in Japan. I believe they call this deflation. Widespread unemployment. The $64 question, which is of interest here, is "Can the gold price rise under conditions of severe deflation?". I don't believe it can --- and, if it does, it can't be by too much. All the same, XAU (and to a lesser extent XOI) is the only market index which is rising. So, as you say, gold may well be assuming "safe haven" status again. But, does that presuppose a new bull-market has begun?! Returning to details, my opinion on the present POG and XAU is demonstrated on these graphs Daily --- decisionpoint.com The XAU has clearly penetrated the resistance line and is on its way to previous recent highs at about 90. The "turnaround spike" is also very positive for future price increases. Weekly --- decisionpoint.com XAU shows the long-term resistance line at about 90. The resistance on the POG chart is about $295. In my opinion, these values will have to be significantly penetrated before one can speak of a new bull market. What do you think?

To: Jim McMannis who wrote (914)	9/12/1998 1:59:00 PM
From: Tom Byron	Read Replies (1) \| Respond to of 81867

Jim: Regards the XAU and the 38 weeks cycle. It's true that the XAU started this recent move prior to the ending of the 38 weeks cycle which began Jan 12, 98. This is not unusual. Looking back at Yauger's XAU Cycle charts for the last several years one can see that sometimes the price move vs the TIME cycle starts early by a few weeks and sometimes a few weeks late, and then, the move begins right on the start of the next cycle. What I noticed about this last cycle was the following. If one does a count of the Weekly XAU chart starting immediately following the LOW of the Slow Stochastics indicator in early December, 1997 (one might want to use another technical indicator such as Williams) the 19th weeks ends right at the TOP of the April, 1998 price high for the XAU and guess where the 38th week from the December technical lows ends up??....:)