Sherlock Holmes and Dr. Watson went on a camping trip. After a good meal and a bottle of wine they lay down for the night and went to sleep. Some hours later, Holmes awoke and nudged his faithful friend.

"Watson, look up at the sky and tell me what you see."

Watson replied, "I see millions and millions of stars."

"What does that tell you?"

Watson pondered for a minute. "Astronomically, it tells me that there are millions of galaxies and potentially billions of planets. Astrologically, I observe that Saturn is in Leo. Astrologically, I deduce that the time is approximately a quarter past three. Theologically, I can see that God is all powerful and that we are small and insignificant. Meteorologically, I suspect that we will have a beautiful day tomorrow. What does it tell you?"

Holmes was silent for a minute, and then spoke. "Watson, you idiot, some crook has stolen our tent."

The monthly chart of the Dow Jones Industrial Average is talking in Elliott Wave language loud and clear. The year 2000 was greeted by a 34 month long bear market. The bear went into hibernation starting in October 2002. The bull has been in charge for the last 55 months.

"A triangle always occurs in a position prior to the final actionary wave in the pattern of one larger degree, i.e., as wave four in an impulse, wave B in an A-B-C, or the final wave X in a double or triple zigzag or combination." ……… Elliott Wave Principle

The triangle on this chart is in the wave B position of the large A-B-C bear market rally. The fact that a 5-3-5 wave movement appears to be complete or nearly complete at the same time that a 55 month bull move appears to be complete is not a coincidence as far as I am concerned. It is not magic. It's just the way people active in the markets collectively function. That is what the wave theory is measuring.

Can the bull market in the precious metals be held back permanently? No, it is not possible to permanently hold back a bull market in the precious metals once it has started. If there were any one thing or combination of things that could hold back a bull market in the precious metals it never would have started until it had discounted those factors. Since the bull market in the precious metals has started we should know that it can not be stopped until it discounts everything that it is going to happen in the future. It can temporarily be held back by various holders of gold dumping their holdings in order to slow down the progress of the bull. That means the price will go higher than it would have if they had not dumped their gold on the market. By selling their gold, if and whenever they do, they will be adding to the fundamentals of the gold bull market and the price will eventually go higher than it would have if they had not dumped their holdings. The bull market will in due time discount the fact that they now have less gold then they did before. However, when it comes to governments and politicians, appearances are everything. As long as the numerical stock averages do not collapse, "The economy is doing fine. Optimism abounds."

There are certain factors that can not be influenced or held back if they want to be expressed. Those factors are the actions of other governments.

The manipulations necessary in order to make a bear market in stocks not appear as bad as it really is will mean that the ultimate price of the precious metals will go abnormally high. If the manipulation of the stock averages is abnormal, the ultimate price of gold will be abnormally high. There is no way out of that. If you conduct your personal finances in abnormal fashion there are consequences. This is true for cities, states, countries, and all businesses and professional practices. They can not indefinitely cover up the truth about their finances. That appears to be an awfully difficult lesson to learn for certain people and entities.

Silver is in a similar position to gold in that we can't tell if Delta Long Term # 1 will be a low or invert to a high. However, we will have an excellent clue that Delta Long Term # 1 is a low if the rising trend line is broken and silver trades below $12.50. The $12.50 price was reached soon after I suggested the purchase of puts on silver. That was a great winner if you sold fast. Since then we have had one loser in dollar calls. I have not suggested trading gold or silver for a very long time and for a very good reason. They have been too erratic in their behavior for the multi-week or multi-month type of trading that I suggest. Once the price passes the current Long Term time inversion window we will have much smoother sailing and trading.

Delta Long Term # 1 is not likely to be a high when stochastics are nearing a low. If the price can break below the $12.50 level that means Delta Long Term # 1 will be a Low. I would not be concerned about a break below $12.50 even if it is a wash out type of drop. The next move up to a Delta Long Term # 2 should be a very powerful rise. A decline below $12.50 means the correction that began in May 2006 will be over. We silver aficionados should be rooting for a drop below $12.50. We don't need a close below $12.50, just a drop below $12.50. The price, as of today's close, is only 38 cents above the $12.50 level. The daily chart which is next shows us that there is a good probability that the decline below $12.50 may be here very soon.

The monthly chart of the HUI is our true treasure map. Since the bull market in the HUI began in November 2000, no corrective low has gone below a previous low. All minor and major waves have stayed above the peak of the previous wave. This is absolute bull market perfection. As long as the HUI monthly chart continues to unfold the way it has, it is telling us to stop worrying and fidgeting about the price of silver and gold bullion. The HUI would not be painting the picture it has, and is, if gold and silver were in any serious danger of aborting their bull markets.

Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen is not a registered investment advisor Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.