Here is the update of my recent charts for gold and rates:






Interestingly they share pretty similar characteristics:
- both issues were recently rising strongly which may seem contradictory, but as Jim pointed out might suggest inflation expectations
- both reached 1.27 external retracement of their respective smaller Kane patterns
- in both cases 1.27 retracement of their bigger Kane patters is still much higher what suggests that gold and rates should continue to rise together for some time to come

Amazing battle right here at this spot that we can so clearly see on our charts. I thought it would have been up and over, running hard, long before now. This is interesting. When this coil goes, it should really have some energy. I still think the odds favor an explosion up to the upper areas I mentioned. If they roll it off here that will really say something.

Here's a little known factoid that I haven't seen discussed hardly at all, with the obsession with the S&P. The NASDAQ 100 is now up over 100% off the low, and very close to the .886 of the entire bear market. In other words, up a little more and it is about to be higher than the top in 2007! That is just incomprehensible to me. Just over a year and it is over the 2007 highs. I would never, ever have thought that even remotely possible.

But, you say, Jim, the Naz is so far below that 2000 high, who cares. Okay, look at the Midcaps, the Russell, and the Transports. The Midcaps are up well over 100% off the lows, in the same position right before the .886, and that 2007 high was the all-time high. Same with the Russell. The Trannies are up 123%. This is just insane.

Originally posted by jimkane

I think the battle will resolve to the upside here, shortly.

Boink! Took it long enough...

No reaction, though. Makes me think stop run, 5-wave sequence, and maybe they kill it... I'm just going to stay long side bias here, and let it play out. It will do whatever it does.

I'm getting very cautious here, this is acting like my above sell scenario may play out.

It may also just be headfake chop up and down, sucking people in on both sides and chopping them to ribbons. But, when an area holds something as long as this did, and then does a 'W5' up and over and then fails, it can really flush. So, I'm getting very wary with how it's acting.

Looks like all it did was a test of upper ML from this natural set:

And notice the line in here now.

And off it like a rocket it goes.

Originally posted by jimkane

And notice the line in here now.

This line was also a lower ML from another natural set:

Yes, nice. And there are other lines. It just went line to line to line to line, making an even bigger coil. It looks to me like this is just preparation to go up. At this pace very soon the Midcaps, Russell, Transports, and many, many other things will be at all-time new highs. Not highs for this 'bull#$%@' market, but the entire multi-hundred year secular bull market. Don't bet against America. Meanwhile, new all-time records are being set in many sentiment indicators, surpassing levels from the dot.com era, the 2007 high, the 2008 selloff, the 2009 low, and so on. Lotsa bulls out there. But never fear, this has a long ways to go on the upside. Just ask Bernquacke, Tiny Tim, any analyst, anyone. And I believe them, 'cause they know best. They know an undervalued, low-priced market when they see one.

The point of my above post? Only to say that I've never seen such a disconnect with reality as this in the entire experience of my life. In any area, in or out of the stock market. Not even close during the dot.com mania. When I look at what I think is underlying the world economy right now, the ticking timebombs, I think this dwarfs the dot.com bubble. This is well into the end stages of tulip mania, South Seas bubble type stuff. And it is just bizarre to see it happen, to live in such a world, to see so many people not see this point. It's truly a 'Bizarro' world now. And I'm just blown away seeing it.