This happens pretty much like clockwork every 20-25 weeks (currently on week 23).
Invariably when stocks move down into one of these major cycle bottoms the selling pressure infects everything. It finally grabbed the miners today even though gold has barely budged. Not to worry though, we’ve seen this happen dozens of times in the past, and the miners always snap back violently once the selling pressure in the stock market exhausts.
More importantly than where things are going tomorrow or the next day is where they are headed over the next intermediate cycle. As I have diagrammed in the chart below the dollar is due for a move down into a yearly cycle low around mid February or early March. Roughly the same time as last year. This will drive the next intermediate rally in gold (and stocks) for about the next 12-15 weeks. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!
I’ll say it again. Buying anywhere around these levels will deliver big gains over the next 3-4 months. Probably largest in the miners, but certainly significant in virtually all sectors.
This is that period of time that comes only once or twice a year when the chartists get fleeced (the charts always say the market is going lower at intermediate bottoms. This is why chartists always miss these major bottoms. You need different tools to spot these kind of buying opportunities.) and the smart money positions for the next leg up.
The choice is yours. Do you want to sell at the bottom again, or will you be a buyer this time and make some money? (I think big money.)
Related: Dow Jones Industrial Average (INDEXDJX:.DJI), S&P 500 Index (INDEXSP:.INX), SPDR Gold Trust (NYSEARCA:GLD), iShares Silver ETF (NYSEARCA:SLV), Miners ETF (NYSEARCA:GDX).
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.