The Elliott Wave count has been presented in other articles and the double bottom of the recent long correction at about 163-165 is evident for all to see. The larger numbered waves of 1 and 2 shows us that a marvellous prospect lies ahead for gold equities and those who are prescient enough to own them.

So, wave 3 is now with us and being a statistically longer wave than wave 1, it has wasted no time in displaying its superior bullish credentials.

Those who see no value in the impulse wave theory of Elliott Wave ought to compare it to the three stages of a bull market that is often touted in various gold discussions. The first move up is classed as the "smart money" and those who are in the know quietly accumulating their positions. This is a quiet event on Wall Street and known only to a very small band of investors. This equates to the Wave 1 we saw run from 2000 to 2003.

The second bull move is where the institutional investors realise there is more to this market than a passing spike and they begin to move in too. This is the wave 3 which we are currently starting.

The final phase is when the guy on the street gets wind that there's "gold in them thar mutual funds" and begins to diversify or even totally commit their savings to gold and silver equities in a blow off reminiscent of other sector manias such as the Nasdaq in the 1990s. This equates to the as yet unborn Elliott wave 5 a few years down the line.

So, we see a harmony between Elliott Wave Theory and the fundamentals of investor evolution and psychology.

So, we will now make an assumption based on the fractal nature of Elliott Wave and make some calculations. Fractal means that a price pattern is made up of smaller patterns of the same structure. In that light, take a look again at the now finished Wave 1 from 2000-2003. It decomposes into three bullish waves - 1, 3 and 5 - each bigger than the previous one. This is how we see this whole gold stock bull panning out - one big move upwards outdone by another bigger move upwards. We think that this past three-year move up will reflect the entire three-phase bull market that will extend for at least a decade.

What can we learn from mapping this three-year move to the whole bull? First we break down the price move from November 2000 to the end of 2003.