Toby Connor

With Friday’s employment report a few things began to clear up. The first one is the correct cycle count on the stock market.

Once every year gold and stocks form a major yearly cycle low.

I doubt anyone was surprised by the reversal in the dollar index today.

It may not seem like much happened yesterday, but a very important event occurred.

As convincing as this rally has been I am confident this is an ending phase and not the start a new secular bull market. Actually the bear market began last year in May but was temporarily aborted by massive Central Bank printing. Let me explain.

With the move below $1535 this morning gold has confirmed that it is still moving down into a D-Wave bottom. There has been some question as to whether or not the D-Wave had bottomed in September. The penetration of that intermediate low this morning confirms that the D-Wave did not end during the overnight selloff on September 26.

At this point I think it’s pretty clear the general stock market is now in the initial phase of a new bear market. It’s trying to generate a bear market rally over the last three weeks, but so far it’s been pretty weak. That doesn’t bode well once the cyclical and secular bear trend … Continue reading

I think next week will mark a major turning point in the gold market. Depending on whether the dollar continues higher or turns back down we will either see a resumption of the D-Wave decline or this will just turn into a normal run-of-the-mill intermediate degree correction followed by another leg up in this 2 1/2 year C-wave advance.

A D-Wave decline is a normal, regression to the mean, profit-taking event that occurs when gold gets too stretched above the mean. It is not a take down by an anti-gold cartel. Anyone with a modicum of common sense can look at the long-term chart of gold and tell that this is not a manipulated market. This is just a normal secular bull market, and it is acting exactly like a normal bull market acts.

As I have been warning investors for many months, stocks have now entered stage III of the secular bear market. Gold on the other hand is now in the final parabolic phase of a 2 1/2 year C wave advance.