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0920 EDT Thursday April 06 2006

Good Morning: Long term readers will know that we have been calling the multi-decade bull market in stocks: "The Biggest Bull Market Ever" long before we coined the phrase in January 2004 that we were in what has unquestionably been "The Best Economy Ever", even if not everybody feels that it is, it is and has been without historical equal, in terms of record productivity, record corporate profits and record cash levels for many corporations, it's almost never looked better and we likened the Global Bull Market as a 200+ car train representing each country being pulled along by the mega-economies of the United States, China, India, Latin America and Europe and more recently Japan and Germany, now pulling along after being derailed for more than a decade. The Dow Jones Transportation Index itself is testament to what a great economy this truly is because a staggering increase in the amount of goods being shipped over the past few years is really driving the Transportation Index to dizzying heights like never before and is the engine behind the biggest Dow Theory Buy Signal in history as predicted by the Dow Theorist himself: The famed Richard Russell. The theory being that the Transportation Index is a true barometer of economic health of the nation, because if record amounts of goods are being shipped, the economy is strong and likely to remain strong. It also implies that a Dow Transportation Index and Dow Jones Composite Index streaking to new all time record highs as they did again just yesterday, means that it is only matter of time before the Dow Jones Industrial average itself also soon soars to new all time record highs.

The Biggest Bull Market Ever or Mother of all Bull Markets is not just what we have seen for three straight years, it is in our view a bull run, that began by some counts as far back as 1975 or 1982, in what we have foreseen for some time as a 40 year bull market in the making. That would put the ultimate highs between 2015 and 2022 and it could even be a 50 year bull and stretch out into a Century repeat in 2029.

We have felt for a while, that from the origins of the Intel chip in the mid 1970's, that Moore's Law: The theory devised by Intel's co-founder, Gordon Moore, that dictates that every 18 months or so, chip performance doubles, (and it's been adhering to this principle quite accurately ever since and according to industry experts and Gordon Moore himself this trend could remain constant until the year 2018 or thereabouts) could potentially continue to drive this megabull market all the way until that time and the giant Elliot wave count tends to support this very view, in terms of the megawave structure. The primary 1 - 2 waves of which there were many, (a very long term very bullish sign) being: 1975 ~ 1977, 1978 ~ 1980, 1982 ~ 1984, 1985 ~ 1987 and 1988 ~ 1990. The third wave began in 1991 and lasted all of the 1990's peaking out in 2000 beginning the first of the 3 ~ 4 Wave corrections and subsequent upwave we are now currently in. Another corrective wave is coming, but not for a while just yet, although it is due this year and then we should see a very strong upmove from late 2006 thru 2008 and this could either extend for years beyond, or we could have punctuated corrections into 2012 and then a dream run into 2015 ~ 2018, which could in essence be a 5th wave or even superwave of some dimension or in the event that there are a series of many additional 3 ~ 4 counterwaves that balance out the 5 initial 1 ~ 2 formations in terms of time being 15 years, then it could potentially take us to a point that might initiate the Grand Supercycle 5th wave that could start as late as 2015 and could potentially last as long as 10 years or more taking us close to the anniversary of the previous Century's Dow high of 1929. Since the Dow rose almost 1000% from its early Century low of 41, a high approaching 70,000 could be envisaged by that time and that could prove to be conservative. As we have said here before, we are exceedingly bullish on the Japanese Nikkei, expecting that it could reach 100,000 by that time and even at a stretch by 2020, especially if it runs to new all time highs over the next few years. It is important to recognize how rapidly the Nikkei rose over just 40 years from 1950 to 1989, almost 100 times higher before peaking out and it went from 10,000 to 40,000 during the latter part of the 1980's, so we don't want to underestimate the Nikkei's potential to run up very rapidly as it has, since it bottomed out a few years ago. The same can be said of the Russian market. It has risen faster than any market in history and even today they are calling it cheap, up 100 times since the fall of 1998. Incidentally, two other mega-performers of recent years and of late Brazil and Mexico, both set new all time record highs just yesterday...

But that's not the whole story we wanted to write about today, as we first proclaimed yesterday, this megabull market in stocks could now be giving rise to what may become a new Greatest Bull Market Ever, the recently emerging bull market in Gold and Silver that is beginning to go into hypergrowth. It is very important to keep in mind what happened in the 70's where after decades of inactivity in the Precious Metals arena and post a super strong 20 year stock bull market run, reminiscent of the near 20 year bull run in stocks of the 80's and 90's, Gold and Silver emerged from a slumber to rise 20 fold and 50 fold respectively within just one decade. The 1970's. Gold and Silver have been rising similarly with stocks over the past few years, just as they did in the early 1970's and if Gold and Silver continue to rise almost exactly as happened 30 years ago, it could mean Gold rising from a low of $255 to a high of $5,100: Sounds unreal, but Never say Never...

Trade Well
From the Desk of Savant

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