Poster’s Paradise

I think you and I are the only 2 here that really believe that there will be an inflationary spiral that will take up everything, including the stock markets. I believe gold is leading the Dow and other stock markets higher in this inflationary spiral as shown by the chart below. When viewing the chart notice 3 things. First, the bullish rising wedges in red. This gives us an Elliot wave count for both gold and the Dow. Gold broke out of its red bullish rising wedge a full 10 months ahead of the Dow. Second, the green bullish rising wedges, as they show how gold is leading the Dow by already breaking out and running while the Dow is still working inside its green bullish rising wedge formation. If there is still a 10 month lag between gold and the Dow then the Dow should stay in this present consolidation pattern,green bullish rising wedge, until July of 2008 before it breaks out and runs. 3rd the purple vertical lines that represent the breakouts of both gold and the Dow. What becomes very apparent by looking closely at the breakout in gold, red rising wedge, was the Dow still stayed in it’s consolidation pattern, the red rising wedge, while gold rallied to new highs and completed it’s wave 1 of III. Next it was the Dow’s turn to rally while gold rested and consolidated in a wave 2, green bullish rising wedge. The green vertical line shows gold breaking out of it’s 5 point reversal bullish rising wedge, while the Dow is just at the beginning of it green bullish rising wedge. So now its gold’s turn to rally while the Dow and other stock market indexes work out their consolidation patterns with a 10 month lag to gold.

Bottom line here is that gold has the green light right now to rally and rally hard while the Dow consolidates over the next 10 months or so in its green bullish rising wedge. This is the part that is throwing everyone off IMHO. The folks that want to see the stock market crash in order for our PM stocks to go up must realize what is happening. They are both going to go up but they are going to alternate each bull and bear phase, while gold is going up the Dow will consolidate and when gold is consolidating the Dow will have it’s bull run. It will be a race to the end in this inflationary spiral and at the end will be a deflationary event that will trigger the final collapse of the global markets. This is when you will be glad you invested in Gold as it should maintain a relative edge to just about everything.
aurum the only part we don’t agree on is the time frame. I believe we have to about 2015 to 2017 for the inflationary spiral to play out. That means there should be alot of good trading to take place before the whole house of card comes tumbling down.
Always enjoy your point of view aurum…Rambus

For all the drama over the last month or so, with the sub prime thingy going on, most US stock market indexes found support right where would expect, right on top of their bullish rising wedges.