Next month marks the 3-year anniversary of the bear market in silver that started in May 2011. Later this summer we will hit the 3-year anniversaries of the bear markets in gold and gold stocks. We are now psychologically conditioned for pain and punishment in the gold markets and to beware of the next downward plunge.
In reality though gold has been in a basing phase. It’s not going down anymore, it’s going sideways where the downward plunges are muted and the upward rallies are still fake bear market rallies. What’s interesting about this base is that it started right at the height of bearishness in the gold market. That two day massacre in gold back in April 2013 when gold plunged below $1400 actually started the left hand side of the base. So right when everyone was panicking about gold, in reality it was starting to form a major bottom!
The ideal buy point, according to Stan Weinstein, author of one of the best book ever on trend trading, is when gold would breakout above the resistance of its base and above the 30-week moving average on above average volume.
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