"I believe you've indicated that the bull market in gold has ended and that gold may resume its rise later in this decade. Would you consider this a cyclical bear market within a secular bull market? Come to think about it, how does one differentiate between a cyclical bear and a secular bear? Or to put differently, how does one know when a cyclical market phase becomes a secular market phase?"

David Fuller's view Thank you for a perceptive email from which we can all learn.

Yes, is the short answer to your first question. However, the view I expressed is theoretical at this stage, because while we have seen some capitulation selling which is an ending characteristic, we do not yet have technical confirmation that the cyclical bear in gold (weekly & daily) is over, let alone evidence of a significant support building process, including a sequence of higher reaction lows, which would indicate potential for a resumption of gold's earlier overall advance. We can anticipate these but they can only be confirmed with hindsight following a significant recovery.

In response to your interesting latter two questions, one cannot be certain of a secular (as in very long term) market trend in advance, because we are talking about the future. However, most secular trends will occur in response to lengthy periods of market action that we have lived through, which will create the preconditions for a secular trend which is quite different from what people have become accustomed to.

For instance, among stock markets the first big secular trend which veteran subscribers of approximately my age will recall, occurred during the stimulative monetary conditions and initially low valuations following the Second World War. That ended in the late 1960s, (our Library data does not have the earlier history), with considerably higher valuations and a period of euphoria. Those were the prior conditions for the broadly rangebound, in terms of price action, secular valuation contraction cycle which followed.

Wall Street achieved its lowest valuations for that cycle in 2Q 1982, because expectations among investors were so low, even though the indices were well above their 1974 trough and corporate profits had grown. Those attractive valuations created the preconditions for another secular bull trend, but no sustainable move will occur without good governance and significant technological developments, which we saw. These created an overall environment for significant GDP growth. Inevitably, secular trends will be punctuated by a cyclical bear trend or two, as we first saw with the 1987 crash.

Every subscriber will remember the euphoria and excesses of the late 1990s on Wall Street. In Japan, these occurred a decade earlier. Interestingly, might Japan be leading the bigger markets on the next secular uptrend? It certainly had the prior preconditions of lengthy underperformance; valuations were extremely low, and Shinzo Abe has unleashed a significant monetary stimulus. Much more needs to be done but Japan's current government knows this, so it is certainly possible.

I maintain that we are in the latter stages of the valuation contraction cycle for Wall Street and many other market's. I have also previously stated that we could see clear evidence of the next secular bull cycle for the S&P 500 Index before the end of this decade, led by the accelerated rate of technological innovation. However, I am also wondering if we could first see a cyclical bear market as QE ends, although I doubt that it would have anything like the severity of the big bear trends commencing in 2000 and even more severely in late 2007, leading to a collapse in 2008 and also 1Q 2009 for some stock markets.

Lastly, on this secular versus cyclical trend theme, gold's lengthy secular bear market was the ideal precondition for the secular bull trend which was beginning to emerge in 2001. It may not be over but it has been interrupted by a cyclical bear trend. I also think that a very lengthy cyclical bull market in long-dated government bonds, which was extended by QE, is now in a lengthy bottoming out phase.