Toby Connor: In my last post I hypothesized that the bear market in stocks had finally sunk its teeth into the precious metals sector. I was looking for a final move down into a true D-wave bottom, coupled with the HUI dropping down to test the 200 week moving average. I could not have been more wrong!

Instead gold (NYSE:GLD) formed a double bottom at $1600 and yesterday confirmed a trend change to a pattern of higher highs and higher lows.

As is usually the case the miners (NYSE:GDX) played follow the leader and reversed their downtrend also.

It is now clear that gold put in an intermediate degree bottom on September 26. The double bottom is a much stronger basing pattern then a V-shaped rebound and should launch a test of the $2000 level at some point during this intermediate cycle.

Related Tickers: SPDR Gold Trust (NYSE:GLD), Market Vectors Junior Gold Miners ETF (NYSE:GDXJ), Market Vectors Gold  Miners ETF (NYSE:GDX), PowerShares DB Gold Double Short ETN (NYSE:DZZ), iShares COMEX Gold Trust (NYSE:IAU).

Written By Toby Connor From Gold Scents

Toby Connor is the author of Gold Scents, a financial blog with a  special emphasis on the gold secular bull market. Mr. Connor’s analysis  skill of the markets is largely self-taught, though he admits to being  an avid reader of Richard Russell and Jim Rogers, among several others.

Related posts:

1. A New Intermediate Cycle Confirmed In Gold (GLD, IAU, GDX, GDXJ, SLV)
2. Stock Market Intermediate Cycle Top Is Here; Investors Need To Move To Cash (UUP, UDN, TZA, SPXU, SPY)
3. Gold Price Drop: Nouriel Roubini Taunts Gold Bugs Asking “Where Is $2000?” (GLD, SLV, GDX, GDXJ, IAU)
4. Gold Technicals: More Downside Expected For Gold (GLD, IAU, GDX, DZZ, GDXJ)
5. A Look Into The DOW:GOLD Ratio & The Secular Bear Market (GLD, GDX, IAU, GDXJ, DZZ)

NYSE:DZZ, NYSE:GDX, NYSE:GDXJ, NYSE:GLD