It's been a long time since my last update, however I haven't really needed to make any updates because my thesis from way back in november of 2012 remains in tact. We are still in a secular bull market. I hope you all have been able to participate fully in the 25%+ rise in the S&P 500 over the past 10 months.
Unfortunately for Gold investors, it has not been a pretty time to invest. I considered selling many times, but have decided to remain invested and average down.
As my analysis below shows, it looks like the paper Gold market and the Gold miners are close to forming a bear market bottom. Also, as a side note, Dow theory is pointing to higher highs in the broad US markets. I'm not sure how much longer that will last but there you have it! More below ...
In 2009, the Gold miners bottomed out while internally, their Relative strength was growing.
As of August 2, 2013, we have a similar situation brewing. It looks like the Gold miners are in the process of putting in a bottom. I would expect one more low before they make a move to the upside.
Gold exhibited similar patterns during its 2009 bottom.
As of August 1, 2013, Gold looks to be putting in a bottom, but again I am expecting one more low before Gold moves into a new bull phase.
In 2007, the S&P 500 topped out, giving clear warning signals in the months beforehand. Internally, the RSI of the market weakened while the market made new all time highs. In 2009, the S&P 500 bottomed in a similar fashion to Gold and the Gold miners.
How is the S&P 500 fairing today? The answer is that all signs are currently pointing to a sustained bull. However, there could be some cracks forming. One way we will know if the cracks are forming is to watch the relationship between price and RSI over the medium term, and to follow the Dow theory relationship.
but again, the dow transportations are confirming new highs along with the Dow industrials.
Happy investing!
R
