The S&P 500 has been on a tear as we all know especially since the S&P 500 bottomed at 1343 several months ago. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs.
Many heads have rolled trying to call this recent near two-year downdraft in gold in terms of bottom callers, me included. I thought we would never get much below $1,440 or so from the $1,923 highs, but alas we all know we did
We are seeing patterns in gold commiserate with what Elliott Wave Theory calls a “truncated 5th wave” pattern. All bear cycles have 5 full waves to the downside from the highs, and we have been in wave 5 since the $1,434 highs.
We have been writing about the bottoming process of the Gold Bear Cycle since Dec. 4, 2013, and our most recent article on Dec. 26 reiterated that the best time to accumulate the Gold/Silver stocks was in the December and January window.
Let's make one thing clear; nobody I know including myself predicted that gold would drop from $1,690 to $1,625 inside of 48 hours this week. That was not in the charts and so I won’t even pretend I was going to see that train coming through the tunnel.