Considering that Gold has risen $80 off its low and the precious metals Miners have screamed higher, it's surprising how little bullish cheering we've heard.  My discussion forum, Bull & Bear Talk, is very sensitive to Gold, but has barely seen an uptick in traffic during this move.  In past moves out of Investor Cycle Lows, Bull and Bear Talk has had an immediate surge in traffic and a significant rise in the number of excited posts.

This is just a small sampling of sentiment, but I think it's telling.  We've had a 3 year bear market in Gold that has battered and beaten the bulls into complete submission.  All speculative interest and fond memories of the past bull market have been completely erased.  This lack of interest was evident in the recent 3^rd test of the bear market low - the volume and volatility was much lower than during the first two retests.  The bear market has achieved its goal - to clear sentiment on a longer timeframes and lay the foundation for a real change in trend.  The view of Gold and its sentiment on longer timeframes is a picture perfect example of the ebb & flow of Cycles.

The $40 "recognition day" last week was obviously more than enough confirmation to declare a new Daily Cycle (Daily Cycle is 24-28 trading days), but it was powerful enough for declaration of a new Investor Cycle (Investor Cycle is 22-26 Weeks) as well.  This is the development we’ve patiently waited for.  However, on shorter time frames, Gold has pushed the Daily Cycle into an extremely overbought state, so a $20 or more retracement is possible.

This is only a problem for short term traders; a decision to take a new position now at such overbought levels could mean entering just as the market cools off.  Nobody ever said that trading is easy, and determining when to enter a fast-moving asset is a frequent dilemma.  Getting the trend right is only part of the challenge.  Gold's 1st Daily Cycle typically rallies until day 18-20 before topping, so on day 13 here we’re likely to see another push higher before Gold turns down into its 1st Cycle Low.  There is no way of knowing how powerful the remainder of the Cycle will be, but the average 1^st Daily Cycle adds 10%.  If that happens this time, Gold will top at around $1,364.

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