McClellan Cycle Suggests Gold Now Near Cyclical Bottom

321Gold.com has reprinted an excerpt from Richard Russell, also linked to by LewRockwell.com, which focuses on a 12 1/2 month cycle earthed up by the MacLellan Market Report.

McClellan has discovered that there's a cycle low appears for gold roughly every 12.5 months. The cycle lows have run as follows: Jan 6, '06, Jan 8, '07, Jan 7, '08, Jan 5, '09, Jan. 4, '10, Dec. 31, '10. McClellan puts the next cycle bottom for gold at February 8, 2011. Which means that the cycle low for gold should arrive at any time between now and February 8, give or take a few weeks before or after that date.

Interestingly, the McClellan cycle bottom for gold is due to arrive amid a good deal of professional bearishness regarding gold ("gold overdue for a major correction"). Thus, many traders have traded out of their gold positions, just as we near the date for the McClellan cycle bottom.

Here's the accompanying chart which marks the cycle lows:



Russell ends with his usual caveat about the market wanting to take as few people up with it as possible. A climactic sell-off after buyers are lulled into thinking the downtrend's over would do that trick - especially if it hits stop-loss orders along the way.