Olddog writes, “My definition of a bull is a market making higher highs and higher lows. This market hasn’t done that for 3 months. All the issues you are following are down at least 10%, some over 50%(AG). What will it take to be considered a bear?” That’s a most excellent question, and one which should be answered for everyone.

I responded to Olddog as follows, “A bull market, despite the many different ways folks try to describe one, goes like this, to my way of thinking. It revolves around the standard Wall Street 50-day and 200-day moving averages. 1.) Price will rise thru a down-trending 50-day, 2.) the 50-day will turn up, 3.) Price will go up thru its down-trending 200-day, 4.) The 50-day will pierce the down-trending 200-day, making the “Golden Cross,” , 5.) the 200-day will then turn up, 6.) the 200-day will then begin to act as strong support, though it may be sometimes be pierced temporarily.

Right now, 1.) price has fallen thru its 50-day, 2.) the 50-day has turned down, but, price has not pierced the 200-day, the 50-day has not fallen thru the 200-day in a “death cross,” the 200-day has not rolled over to go down… and, most importantly, to my case, the 200-day is acting as good price support… hence, I see a correction, now consolidating and basing around the 200-day moving average.” There are other ways that other people delineate between a bull and a bear market, but this has been my definition for years. And, see the price chart for gold around last December and January for the Bull turn upward, and the 6 points I made about it.

The price of GLD advanced thru its 50-day on 1/6. The 50-day turned up by the end of January. The price then proceeded to pierce its 200-day on 2/3. The 200-day then began to turn upward after the middle of February; and the 50-day pierced the 200-day on 3/1. Since then, the 200-day has been acting as price support, as of 10/6, and price is walking right up that slightly up-trending 200-day all month long. As a result of my particular analysis, I still believe that we are dealing with a bull market.

It’s Friday morning, and the metals are just about dead, flat even, for next to no change. The consolidation and basing would appear to continue… the longer it gets, and the more people sell out, having lost all interest, the better for us!

Here’s to your accumulation of real wealth!
Harold F Crowell


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