The next bubble – precious metals

Gold is now the only market that reached new highs. It is a quiet bull.

The gold bull

The gold bull

Every major bull market has 3 phases. The first phase of a bull market is the
accumulation phase. It’s an early phase when informed investors accumulate
the item because it is underpriced. The second phase of a bull market,
usually the longest phase, involves the funds, the pro-s, and smart money to
take positions. This phase is characterized by many abrupt reactions and corrections
that cause the public to dump. The third phase of a bull market is the speculative
mania phase, when we see sharply rising volume as the public enters the market and
Wall Street “experts” start hyping gold. Gold had the manic phase in 1977-1980.
I believe we are currently in the second phase of the gold bull, about to enter the
third phase. Expect gold to perform like technology stocks in 1999.

Sunday, November 15th, 2009 Precious metals

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