Stock market trends: bearish

Transports broke below their August 16 support today -- but Industrials closed 455 points above their own August 16 critical low of 12845.78. If Industrials close below that figure, the great primary trend of the market will have turned down, and -- we'll be in a primary bear market.

If a bear market is signaled, it will be imperative to be off margin and light or out of all common stocks with the exception of top-quality gold shares.

If or when a bear market is signaled, there is absolutely no way of knowing its duration or extent. It could conceivable be a short-lived affair or it could be an extended and crushing disaster. There is just no way of knowing in advance.

Is there an ideal position to be in if it turns out we're in a primary bear market? None that I know of, since every situation is different. But if I had to pick an ideal situation, it would be one half of liquid assets in gold and the other half in cash. What kind of cash? For most people, the kind of cash they are familiar with -- US dollars.


The VIX was up an amazing 5.10 to 26.49 as panic was in the air.

"When a stock or a commodity (GOLD) advances into new territory or to prices which it has not reached for months or years, it shows that the force or driving power is working in that direction. It is the same principle as any other force which has been restrained and breaks out. Water may be held back by a dam, but if it breaks through the dam, you would know that it would continue downward until it reaches another dam, or some obstruction or resistance which would stop it.

"Therefore, it is very important to watch old levels of stocks and commodities. The longer the time that elapses between the breaking into new territory, the greater the move you can expect, because the accumulative energy over a long period naturally will produce larger movements than if it only accumulated during a short period of time."

If gold can close above its 1980 peak price of 850 -- it will have overcome a resistance level that has held it back for 27 years! Thus, a decisive closing about 850 could bring about at least a doubling of the current dollar price for gold.

If gold can close above its 1980 peak price of 850 -- it will have overcome a resistance level that has held it back for 27 years! Thus, a decisive closing about 850 could bring about at least a doubling of the current dollar price for gold.

Suddenly gold is in the news. The public is reading about gold an actually asking questions. "Why is gold going up?" "What's the meaning of the rise in gold?" "Should I buy gold?" "Is there something wrong with the dollar?" "Where does one buy gold?" "Is silver related to gold?" "How much does it cost to buy a gold coin?" "What is GLD?" "Who sells gold coins, and if I buy a few, where should I keep them?"

Yet our citizens have been kept in the dark about gold for generations. Instead, Americans have been touted on the value of fiat money, rudderless money. This fiat money is created by a private banking cartel (the Fed). This transfer of US money-creation has never been authorized by a Constitutional amendment.

I've said this before, but I'll repeat it -- the whole system of fiat (paper) money is the greatest fraud ever perpetrated on the American people. Our defense against this "counterfeit" money is, and always has been, Constitutional money -- gold and silver. Federal Reserve Notes (currently termed "dollars") are a blatant lie. Today, rising gold is dragging that lie out into the open.

From: DowTheory news