Ok above is a chart of the GLD. The gray line that you see diving below the GLD candlestick price is the Standard Deviation. Standard Deviation is a mathmatical formula used to show on a graph the distance between a stocks current price to that of its mean average price in a selected time frame.

Now, its not important that you know the calculation details, whats important is that you understand the historical facts, which you know we depend on. The top left corner of the chart shows shows Standard Deviation greater then 2. Statistically a Standard Deviation of 2 only happens 1 in every 22 trading days, and a Standard Deviation of 3 only happens 1 in every 333 trading days. GOLD is close to moving back to the mean price.

This chart shows the relationship between the broader stock market index and the gold index. As you can see, the years the stock market doesnt do so well, GOLD does. We are in a Bear Market as stated before. GOLD should move higher.

This chart takes us back over 100 years of stock trading. This chart shows how the markets go in bull and bear cycles very consistantly. Generally lasting about 15-20 years for each cycle.

Now as you can see, the last cycle was clearly a bull cycle from 1982 to 2000, which followed a bear cycle, which followed a bull cycle, etc, etc.

So, what cycle do you think we are in now? Good guess, Mr. Bear. Per the previous chart, what does good in a bear cycle, stocks or commodites? Right again, commodites.

Notice at the bottom of the chart the calculated market p/e ratios for the bull and bear cycles. The current S&P p/e is at 17xs. Before this thing bottoms, we will see under 10 p/e ratios. However, don't expect the market to go straight down to those levels, that would be too damm easy. If that was the case, what would you need me for?--Jon