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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.


The Dow Jones Co. shocked the financial world last week when it announced it was de-listing four of the 30 components that make up the famous Dow Jones Industrial Average.

The plot thickens: Along with currencies and interest rates, central banks add gold to their list of manipulated markets.

The war being fought between paper and gold has already been decided. It was decided when European central banks announced they would sell a limited amount of gold over the next five years and end leasing.

We wrote in last week's commentary that a bottom may have been in place and that accumulation appeared to be broad-based.

I have been a student of the market umteen years.

Irregular price behavior . . . dominated Wednesday's action most of the day, with a "relief rally" of sorts in the "interest rate sensitive" areas as the afternoon progressed.

Time to dip into the mailbag, since it's been a year-and-a-half since Market Directions last fielded questions and comments from readers.

I have been affiliated with Wall Street more years than I care to remember.

We turned temporarily bearish in last week's newsletter, but it is beginning to appear as though our bearishness was unjustified.

Chart Symmetry is designed around the observation that prices tend to change direction along certain preferred gradients. New readers are advised to read the first article in this series to discover how Chart Symmetry works.

1998 was another banner year for equity investors. The major indices finished the year close to their all time highs and double-digit gains were again the norm.

The blue chip averages pulled back around 10% during the last few months, but the overall damage is more serious than that. Several sectors are down sharply and many high quality issues are down 30%-50% or more.


His Excellency The Governor

Sheikh Salem Abdul-Aziz al-Sabah

Central Bank of KUWAIT

The gold price has fallen sharply over the past few months, and the market has been gripped by fears of large ongoing future sales by central banks.

Conviction in technology . .

The Bank of England's (BOE's) ridiculous second 25 ton gold auction took place on September 21 ( basically giving it away at $255.75 within a few bucks of the 20 year low).

Today's reports of stronger than expected productivity gains and less than expected unit labor costs will only incite more giddy chatter of a "new era" miracle economy.

We have to go somewhere we haven't been before. We started writing about markets in 1967, seven years after becoming involved in world financial markets.

The explosive reaction of the Gold market to a sudden policy shift by the European Central Bankers has brought to limelight the "hedging" activities of the Gold producers.


Technical, fundamental and monetary factors . .


As expected, it was another very unsettled week in the stock market and financial markets generally.

Don't be confused by self-serving outcries from various parties trapped in the gold short squeeze.

Options trading and bungee jumping have a lot in common. Both can slam you into the ground ... and both can send you flying into the stratosphere. So why attempt such extreme sports?

Gauging the wind .

It seems unanimous: the economy is booming. Presidential candidates allude to it in condemning their opponents for not proposing more spending for education, or housing, or whatever pleases their current listeners.

During the first part of this year, I wrote an article for Gold-Eagle titled GOLD, COMMON SENSE AND PATIENCE.

In "A Peek at Smaller Golds" (Part I) I presented a group of successful advanced stage exploration companies that should offer substantial upside gains in a gold bull market.

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