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Phase Two of the Gold Bull Market Begins!

You are witnessing history. This is day one of phase two of the gold bull market. Yesterday the XAU gold stock index blasted through its 93 1/2 resistance level. It broke its downtrend resistance line! For weeks I have been telling you that this was going to be the pivot point. It has been breached! The gold cartel is on the run! Gold bulls held on and have triumphed!

Everything is lining up for gold stocks. They have been outperforming the metal for weeks now and by breaking through 93 1/2 they have destroyed a resistance downtrend line that has kept gold stocks down since November. The next resistance point is in the 105 area. I think we'll get there within 6 weeks. We'll probably see a pause there and then you can get ready for another blastoff.

Yesterday was one of the most important days for gold I have ever seen.

This is the start Wave Two of the gold bull market. Bull markets usually move in three waves. The first wave is dominated by insiders and professional investors - people who understand the sector and know that there is true fundamental value in the stocks that make it up. In stage two, mainstream investors begin to realize that the fundamentals for the sector are changing and that stock prices are likely to go up. Stage three is characterized as a mania in which people believe that stock prices are going to go higher forever and engage in furious speculative behavior.

The next year is going to be about the mainstreaming of gold. This is what wave two is about. And as someone reading this, you are already well ahead of the curve. Today you know about gold. Tomorrow Jim Cramer will be talking about gold on Mad Money. He'll have to, because people will be calling him to ask him about Newmont.

The great thing about wave two is that it's usually the longest lasting of the three waves that make up a bull market. Everything is lined up for a monster Fall rally in gold.

On a day like this you just have to sit back and enjoy things. Over the next few weeks I will go over how I plan on participating in this gold bull market. I already have a large gold position personally, but going forward new issues will appear on the market. As a bull sector advances companies appear to take advantage of it and we will see dozens of small cap exploration mining companies appear over the next year. They will deserve out attention and scrutiny. There will be a few diamonds in the rough.

But enjoy today. You did it!

To find out what gold stocks Mike Swanson holds and plans on buying subscribe to his free Weekly Gold Report at http://wallstreetwindow.com/weeklygold.htm.

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