I’ve been of two minds recently regarding the current Cycle picture in equities. So this week I focused more attention on finding secondary evidence to support a more definitive position on direction. As I suspected it might, my research provided an almost endless array of contradictory evidence and facts.

The internet and social media are a mixed blessing to researchers – they can lead to a huge number of hypotheses and points of view, but the quality of information is generally pretty low. At its best, however, the internet can lead to ideas and links to compelling analysis and primary sources. The point is that there exists online a mass of data points, ideas, opinions, analyses and thesis that can occasionally help to bring real clarity of thought, but more often, the information serves only to confuse, and even obfuscate. From a trader’s perspective, the information is generally unable to answer the questions that are of greatest import.

Longer term, remember that the March ICL held above the October ICL. With our newfound Cycle clarity, we no longer need to be concerned with the possibility of an early IC failure, so we can once again at least entertain the possibility that the bear market double bottomed in March. I believe that we’re about to see a Short covering rally from the speculators, one that will drive price up to the declining trend-line that marks the place where the last 5 bear market ICs topped. Beyond that, further upside will require that speculators turn bullish and begin buying Long positions again. If that unfolds, we should expect to see Gold cleanly break and exceed the trend-line, and eventually push into the $1,300 range, perhaps as high as $1,375. And if that happens, if Gold has a double bottom ICL followed by a higher IC top, it will be an exciting development for long-suffering bulls!