And the scoop on gold.

I had reported to you the predictions from the Cycle people. According to them, the Stock Market will hit top in 2010 (around April) and crash later like it did in the 20's. Gold will rally by then and hit a top (maybe 1300) in July. The ultimate top gold is predicted for 2011. Details will follow. Let's look at graphs so we can see some data. The first graph is the head and shoulders pattern in the S&P500. The red line is the 200 day moving acreage, while the black line is the 50 day moving average. You see the head and shoulders? (three bumps). It would forecast a drop. The drop did occur, but the graph bounced off the 200 day moving average, negating the formation. Stocks have been advancing ever since.

Now look at the weekly average of gold. It has a reverse head and shoulders which forecasts a rise in gold prices. This predicts a rise in gold prices. But! The reverse of what happened with stocks could occur (gold bouncing down from the 200 day moving average) and the formation will be aborted. The most likely scenario is gold moving to 1,300 soon then move beyond 2,300 by next year.

Silver is said to be slower than gold. Note, though that silver stocks are dropping while demand for silver coin is increasing.

Let's look at the dollar next. The value of the dollar is dropping and that alone will push gold and silver prices higher.

Here are actual gold prices of a gold exchange traded fund. Note that the 50 day and 200 day moving averages are getting further apart. This indicates a long-term continuing rise in gold prices.

Will gold prices bounce off the $1,000/oz resistance again? We will see in the coming weeks.