Bear's Lair

Bear Markets always follow Bull markets and a severe stock market correction is long overdue. Bears Lair will spot, monitor and analyze the stock market correction as it develops.

 

We discussed Warren Buffett's illogical opinions about gold in our 15th February 2012 report under the heading "Buffett's Blind Spot".

We've supposedly got Greek elections coming up this weekend, or do we?

Gold stocks have recovered sharply following last month's panic-like capitulation plunge.

Its been a slow day so I thought I would get the Wednesday stock report finished early.

To paraphrase Einstein, not everything worth measuring is measurable and not everything measurable is worth measuring. The purchasing power of money falls into the former category.

The past couple months have been a roller coaster ride for investors and traders.

What a whippy week it was.

On Friday the price action in gold caught the attention of most market participants as gold put in a monster move to the upside in light of risk assets such as the S&P500 selling off sharply.

As of the end of May 2012, gold suffered the indignity of its first "bearish" year after its long-term bull market began in 2001.

I really don't have much to bring your way this week beyond charts.

Tonight I want to bring everyone up to date on the many H&S top patterns that have been forming for sometime now.

There is a lot of lopsidedly-bullish analysis on China in the mainstream press and in the "blogosphere".

"When Injustice becomes Law, Resistance becomes Duty." -- Thomas Jefferson



IT'S TIME TO FACE THE TRUTH

We're still up in the air as to what is going to pass in Europe but perhaps this week we will see.

The fortunes of Europe's beleaguered euro currency have been heavily influencing US markets. Both stocks and commodities have been battered down recently by overwhelming euro bearishness.

Gold's biggest problem since February has been one of relative weakness. This weakness in turn has kept the market-moving hedge fund players away from gold.

It's time to update our long-term weekly charts showing how the gold sector, as represented by the Barrons Gold Mining Index (BGMI), has performed in US$ terms, gold bullion terms and S&P500 (SPX) terms

"Has gold finally bottomed?" That is the big question we are going to attempt to answer in this update.

With a bank run in near full force in Greece and the country on the verge of exiting the Euro while still searching for a leader the world markets are reeling but gold and silver are finally catching a bid.

Gold stocks have been pummeled mercilessly this month, their price action looking almost apocalyptic.

Normally catching a bottom is not difficult. Bottoms tend to occur instantly while market tops form during a process. Yet, I've found that bottoms of long-term significance do not occur instantly.

It was a decent down-week early on but then things stalled Thursday before it was announced that JP Morgan had a small trading loss.

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U.S. ranks third in world gold production with 240 tons per year