New research by Morgan Stanley Europe and Merrill Lynch Asia confirms old moving average based research by Stan Weinstein that the on-going upswing in the S&P 500 and other market indices around the world quite possibly has much further to go in this current bull run albeit with some volatility along the way. That could well have negative implications for the short-term price of gold bullion but, fortunately for the ‘gold bugs’ to be found in every room, continuing bright prospects for the stocks and warrants of gold and silver mining and royalty companies are expected.

Below is this week’s table showing the relatively poor performance of gold YTD (albeit not so for silver!) as compared to the HUI, GDM and CDNX in spite of closing above $1000 for the second consecutive week. Also note that the relatively unknown and misunderstood asset class of long-term warrants associated with commodity-related companies …

Merrill Lynch Asia (Bank of America) strategists Sadiq Currimbhoy, Arik Reiss, and Jacky Tang suggest that the S&P 500 could soar another 40% by December 2010 before it collapses completely based on a unique comparison with the Nikkei 225. (Before you reject this possibility out of hand please read the entire article.)

Were the S&P 500 to indeed rise by 40% then, by extension, precious metals stocks (as represented by the HUI and GDM indices) and their associated warrants (as represented by our proprietary PreciousMetalsWarrants Index) would top out at record highs as would gold and silver.

Uncanny Relationship Exists (with a Twist) between the Nikkei and the S&P 500.The strategists have identified a pattern that supports the likelihood of major additional gains in the US stock market even without a strong economic …