Jordan Roy-Byrne: Are Technicals Worth a Damn?
By GCRU Gold News on Sunday, May 11 2014, 10:58 - Permalink
First we ask Jordan why cyclical bear markets almost always occur faster than an ensuing recovery? Jordan points out that this occurs in almost all markets, not just the precious metals sector. What implications does this hold for investors? Since the current pull back in precious metals has lasted 24-30 months, investors can expect a saucer shaped recovery which takes at least 30 months to reach previous highs.
Jordan believes that the upcoming bull market in junior resource stocks will be quite long and spectacular in terms of gains. He runs through some historical markets in the S&P 500 and Dow Jones to show how different corrections lead to different style recoveries. With respect to where we are now, Jordan points out that the two nasty bear markets in 2008 and 2011, have cleaned out a lot of speculation and excess.Jordan's historical research shows that multiple bear markets compressed into a short period facilitates the ability for a market to have an elongated, uninterrupted rise.