Our Market Historian Extrordinaire Plunger …. Posted this at the Chartology Forum over 1 Month Ago .

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Long ago in a far away galaxy there was another epic bull market—-Is History Rhyming?

One advantage of getting older is the broader swath of history one can recall. I have to say that yesterday this current jump in the gold stocks brought back memories of another market. And that was the pop in the Dow in August 1982. I remember it well. Although not too knowledgable at the time I was an avid follower back then. I had just returned from a tour of duty as a young fighter pilot in Korea where during my one year remote assignment I purposed to read every book on finance and investing in the base library, as opposed to “running the ville”. We didn’t have Amazon back then. So my antenna were tuned to the market and I got a chance to see up close the start of an epic bull market and remember the “feel” at the time. I have to tell you knights, after the action in the market over the past two weeks this feels like what I recall in August 1982 in the stock market.

Now after a grinding 5 year bear market, Most beat up bugs would like to see another bull market entry like we saw in 2000-2001 in the PM stocks. It has occurred to me that we may not see that type of market and there is a reason why. The bull in PM stocks which started in Nov 2000 came after a 20 year grueling secular bear market. There was no more life left in the sector and at that time there were still perceived alternatives as the POR in the general stock market bear had not arrived yet. The public still thought we were in a bull market. We were believed to just be in a “correction”…it was still buy the dip in Cisco and Intel. So the genesis of the PM bull was slow and labored. There was plenty of time to get ones entry as we can see in this weekly chart below. Note we had a classic Weinstein style Stage 4-1-2 transition with plenty of retests of the 30 EMA, each providing a good chance to get in.

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Knights, I am proposing that from what I am thinking its not going to be that way this time. So what is it that might be in store? What I am saying is if this is the start of the bull and I am getting that 1982 feeling on the back of my neck (aviators term) that the beginning may model the start of that bull back then. I recall the feeling of disbelief shared by everyone. After all we were supposed to go back and possibly revisit the lows of 1974 in the DOW. Furthermore once the market got going it simply would not pull back to allow anyone to get a lower price entry. Maybe thats what we have here…let’s take a look at the analog.

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Note the powerful breakout on volume and the initial resistance at the previous high (hump). See how that compares with the action we see in the GDX and all other gold indexes:

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Now one can see why the feeling is the same.. OK so how did it progress from there? Unlike the PM stocks in 2000-2001 the market never looked back. It just simply never even thought about retesting the 30 EMA for another year. This was a powerful powerful move. It was so frustrating for anyone on the sidelines as you just couldn’t get in at a lower price and remember that EVERYONE was a sceptic since they had been bludgeoned by false hope so many times in the past. Here is a look keeping in mind the market just wouldn’t correct!

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And the daily chart, remember September historically is the markets weakest month. “So since its September I will just wait until the market corrects or does a double bottom before I enter”- good luck with that.

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Now recall what the last 17 years in the Dow had looked like at the time. This is called coiled spring action:

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And this level of potential energy resolved itself into this:

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Knights, I don’t know if this is just another bounce of false hope in this ongoing bear market,…just another false bottom in a deflationary world. But this seems to have a different scent this time and gold performers better in a deflation so its about time (read the Golden Constant”- Roy Jastram