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Last week, our headline was for a defining week in markets and the big question we implied was: Continuation or Change? We got continuation for most of the week, but change came suddenly and decisively Friday, on the back of a lower than expected GDP number coming in at 1.6%, as perhaps the lowest quarterly growth in years and may not be a good omen for the economic outlook going forward. And who do we blame for this? One Ben Bernanke Chairman of the Board of the Federal Reserve System, who while he has succeeded thus far in engineering a mid-decade slowdown and admirably managing many high-flying stocks and the Dow Composites, Utilities and Dow Jones Industrial Averages to new all time highs, regrettably he may have already gone too far: Not by the fact that he stopped raising rates, but by the fact that he may not have started lowering them in time to avert the longer term bite into economic growth that these now fairly high sustained interest rates, have increasing impact.   A few months ago, in a satire of the movie Wall Street, coincident with the proclamation of Ben Bernanke Day with his new found popularity: We headlined our report, with the code word for The Street: "Blue Horseshoe" Loves Ben Bernanke serving to highlight how much Wall Street not only approved of Ben Bernanke, but was falling for him hard, along with Treasury Secretary Paulson and with good reason: At that time, the breathtaking bull run of the past few months was only just beginning so our astute observation was prescient enough, but is the party now over for a while? As expectations are not lived up to and: What can Wall St actually do for an encore..? While any encore of the past few months might be bordering on fantasy and with a correction now seemingly inevitable, this could be the pause that refreshes, if Bernanke comes to his senses and decides to give the World a Christmas present, with an early rate cut in December and the first of a series of rate cuts that could take interest rates back to 1% or less.    He might actually find himself being forced to cut rates decisively over the next 9 months or so to prevent the possibility of skirting some negative growth in a harder than anticipated soft landing... On the other hand, the surge in stock prices over the past three months, may buy him some time and growth over the next 6 to 12 months, if the stockmarket is a harbinger of stronger growth ahead, and it could be. And should that be the case, we could be in for a near perfect soft landing, by the skin of our teeth, but that does not preclude the need to lower rates aggressively and soon... Fortunately, the US economy has benefited from a War stimulus and export led boom to the fastest growing World economy ever, but that too may be slowing along with the domestic economy that is being hit increasingly hard on the housing front and that could have psychological implications for consumer confidence if homeowners suddenly feel a lot less rich and their home equity loans begin to bite where it really hurts, in the wallet.   Last week we also warned of the danger of getting carried away with stock prices exploding higher and even MODAR succumbed to the market's seductive ways, in the fireworks show it put on Thursday, right ahead of what turned out to be Friday's let-down. Stocks like former dot.com high flyer and later Lazarus Microstrategy MSTR burst through a heady $110 and soared 10% in only two days and so far its still up there above $120, but that was not the case for medical monster performer Intuitive Surgical ISRG, which got hammered down 10% to under $100 on a downgrade, following better than expected results. Travelzoo TZOO came in for the same treatment as it was summarily whacked down from a $40 blowout result surrendering all of its gains back in 3 days.    We have in fact being counseling readers to buy dips in Gold and Gold stocks as well as average down for those who are long term holders and so far this strategy has been working well. In particular, we nailed the exact lows on Goldcorp GG, in the early part of October and most bellwether Gold issues have been acting well since then, including Newmont NEM, Anglo American AAUK, Royal Gold RGLD and a host of others. The most important point being, Gold stocks have quietly been rallying ahead of the Gold price itself which closed the week out at $602 with Silver at $12.10 and the most important Gold stock perhaps being Goldcorp itself may be foretelling of significantly greater things to come for Gold and Silver and other metals in general, because it has traced out a gigantic three wave ABC correction this year since the May 11 high that potentially portends what could be third wave of awesome dimension in the making that could put Goldcorp on its way to being a $50 stock initially and perhaps down the road a $100 issue. Its most recent three wave ABC correction, a classic runaway bull market continuation pattern, is kind of a whole lot like the last ABC correction that GG's stock price formation displayed back in 2001 between $5 and $3 prior to a furious price explosion from just under $3 to $18 in December 2003 and then corrected back to $11 in an uncannily similar ABC structure to the most recent. This is how technical analysis can often predict not only the future direction and movement of stocks, but also they can quite often lend themselves to calculation of measured moves, the  dimensions of which can be absolutely staggering as is already clearly proven in the runaway bull market performance of Goldcorp. And when you see multiple ABC's as in the case of Goldcorp, it usually means you are dealing with a series of multiple 1 - 2 waves or impulse wave 1's followed by corrective wave 2's that are by their nature more often than not 3 wave in nature, also known as ABC 2 wave correction. The resolution of these is almost always a breakout and strong continuation to the upside, usually described as a third wave pattern, as the longest and the strongest of impulse bull waves and the heart or mid-part of a major bull wave run. As in the case of GG, the 3rd Wave ran from $3 to $18, for a 600% gain. The next impulse move took Goldcorp from $10 to $40 for a 400% gain in half the time indicating very strong acceleration of sorts and therefore, extrapolating out one could argue a blowoff run to $60 or so could be next for Goldcorp.   The good news for Gold investors is, Goldcorp may be a microcosm for the Gold price itself along with an even more very bullish looking Silver, both of which are sporting very large ABC formations indeed... Conclusion, Silver, if it can clear $12.50 ~ $13 could be headed for a new trading plateau around $25 and Gold could be headed to around $1,050 or so or certainly towards old highs.   We have been saying for some time that Gold and Silver could accelerate higher without warning or news and that has very much been the case over past weeks as both of these metals have shown a distinct reluctance to remain subdued or down for too long. Trade Well From the Desk of Savant

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