Some technicians are claiming that we are near a stock market bottom. I agree with Jim Puplava, who said that this year is going to look like an Oreo cookie. There will be a dark first quarter, followed by two quarters of white creamy filling, followed by a dark fourth quarter. What the optimists are seeing is the coming creamy filling.
We have already seen the dark first quarter. The creamy filling will be the result of the stimuli that the Fed and the government have instigated. But after that, starting in the last quarter of this year and extending into next year, the recession will turn into a depression. With their stimulating ploys, they are trying to put out a fire by pouring more gasoline on it. The effect will only be temporary. The longer term effect will be a worsening of the problem. Like Ron Paul said, how can you expect to fix a problem, by doing more of what you did that caused the problem in the first place.
Coincidently, according to technical analysis, gold and silver are due for huge pull-backs – all a part of a normal secular bull market. The prices of these metals could pull back significantly. This will shake many out of the precious metals market. Many, who bought recently, will lose as they bought high and will sell at the wrong time, when the price will be low. Their mistake will be selling during the pull-back. The correct strategy will be to hold on to your metals, AND TAKE ADVANTAGE OF THE BUYING OPPORTUNITY TO ADD MORE TO YOUR POSITION. For those who have not yet taken a position in the precious metals this will be a great ENTRY POINT!
There will be ups and downs – two steps forward followed by one step backward. But before this bull market is over, gold will be over $3,000 and silver will be over $100 (and most likely WAY over $100.) If you want stocks, the place to be is commodities – ALL commodities, but especially gold and silver and energy.