Timing & trends

Gold & Silver: Timing and Targets From One of the Best



Continue to look to take delivery of the physical metals on further weakness. The gold/silver snake is coiling. The ‘gangsters’ at the Plunge Protection Team, JP Morgan Chase, and the CME will do their best to drive prices lower, but will get ‘bit’ by a venomous and revengeful market. There will be no tears here.

Gold and silver were recently knocked down to distract from the Greek bond default and that there is a huge movement away from the U.S. dollar as a trade settlement currency. The United States is waging economic nuclear war against Iran and threatening to do the same against India and is likely to suffer similar counterattack against its own vulnerabilities, and a lot more.

We may have hit support levels in both gold and silver, but I am awaiting further confirmation that lows are in place. Such lows may only be trading lows. Recall, we’ve entered a negative ‘seasonal’ time of year for gold and silver that could carry into the summer. There is, however, the possibility of another shot higher into May, but I would hope upside volume would confirm the advent of that move. Except for those of us who are long-term holders or for those who have no positions whatsoever, there is nothing to do here without a renewed upside trigger.

I urge you to subscribe to my VR Gold Letter for much greater detail at www.vrgoldletter.com. Call our office, we can offer you a discount for subscribing to more than one service.

For now, I am as psychologically prepared to see silver at 20 as to see it at 60 in the next twelve months. The big numbers for silver are 26 support and 37.60 resistance. The big numbers for gold are 1521 support and 1792 resistance – above which we could see 2500. As Ed Hart used to say on the old Financial News Network in the 1980s, ‘we will know in the fullness of time’.

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Gold, Silver, Oil and the Fear Index Trends

 This week may provide some trading opportunities for us if all goes well now that most traders are investors are all giddy about stocks again. Last week we saw money move out of bonds and into stocks and the bullishness vibe in the air reminds of many market peaks just before a 5%+ correction in stocks.

Depending how the SP500 unfolds we may be going long or short equities, long precious metals, long bonds, and our VXX trade may spike in our favor.


Bonds: After last week’s strong move down in bonds as the HERD moved out of bonds and into stocks it may be providing us an opportunity to catch a dip or bounce in the price of bonds. If the stock market sees strong selling this week money will run back into bonds.


Looking at precious metals it looks as though gold, gold miners and silver may still head lower this week. The charts are still bearish and pointing to another multi percent drop in value. Gold will look bullish around $1600, Gold miners (GDX) around $48, and Silver around $30 but we need to see one more wave of strong distribution selling for that to take place.


Crude oil has recovered nicely from its 5 wave correction which shook us out of the trade for a profit. I still like the chart for higher prices but with it trading at resistance and a high possibility of sellers stepping back in at this level I am not getting involved here.


The SP500 made a new high last night but has run into sellers early this morning taking prices straight back down. The chart in pre-market looks as though we will see lower stock prices later today and with any luck the fear index (VIX) will continue to rise in our favor.


Watch Live Video Analysishttp://www.thetechnicaltraders.com/ETF-trading-videos/

Chris Vermeulen

Screen shot 2012-03-19 at 6.32.18 AM


Charting The Legacy Of The Baby Boomers

Click Chart for Larger Version: While it is difficult to properly attribute blame for the collapse of the US economy, which commenced in the early 1980s, on either the Fed’s policy of easy money starting with Alan Greenspan (and terminating with today’s statement by Goldman that merely a suggestion of “not easing” may be equivalent to “tightening” – a symptom of a terminal junkie), or the resultant self-indulgent lifestyle of the maturing baby boomers, one thing is certain: the paradigm downturn of the United States began in the early 1980s.


Walmart Shoppers

1069339 origIn February 2012 urban flippers filled with brio managed to persuade equally jacked up buyers to bid up prices on detached dwellings. New highs were set in Toronto and really new highs in Vancouver. The chart above shows the detached housing prices for Vancouver, Calgary, Edmonton, Toronto, Ottawa* and Montréal (*Ottawa are combined residential).

Toronto might be the real deal as sales volumes were positively positive; but in Vancouver although the M/M sales looked robust, the Y/Y numbers continue to deflate down 15-21% …and that’s a definite trend (Scorecard). Calgary and Edmonton scratched together a solid rally with SFD’s up 7.1% and 3.4% M/M but their peak prices happened years ago in the Spring and Summer of 2007 (Plunge-O-Meter). Ottawa and Montreal put in marginally higher prices.

The party is being refreshed with mortgage rate come-ons as long interest rates dip and the 10yr less the 2yr spread continues to narrow (33rd month). The last time this happened was the spread narrowing from Spring 2004 to Summer 2007 which set up the crash in the summer and fall of 2008. It’s an interesting comparison; we shall see if the summer of 2012 sets up the same. 

3116368 orig

SunSpot Activity & Its Remarkable Predictive Effect

In the last 150 years there have been several papers published demonstrating correlations between these natural phenomena and the financial markets and the macro economy, largely ignored by the financial and business media. I will provide evidence that solar phenomena are the underlying cause of several financial and macroeconomic phenonema, and therefore deserving of a more central role in trading stocks and commodities.

Trading the Sun, Economic Rot and the Emerging Housing Stealth Bull Market

John Hampson of www.solarcycles.net has made available to our readers a 26 page analysis of the influence of the sun on the financial markets and the macro economy.

Trading the Sun

John writes: There is an 11-year (average) cycle of solar activity, measured in sunspots. Solar activity causes geomagnetic disturbance on Earth. The sun is also responsible for a cycle of nocturnal lunar illumination on Earth that lasts approximately a month.

Psychological and behavioural research links geogmagnetism and lunar phasing with human mood, and sunspots with human excitability. Studies also link altered moods to more cautious behaviour, including financial decisions. In the last 150 years there have been several papers published demonstrating correlations between these natural phenomena and the financial markets and the macro economy. However, perhaps due a lack of scientific consensus over causality, solar phenomena remain niche disciplines in trading and economics, largely ignored by the financial and business media. In this document I will attempt to provide evidence that solar phenomena are the underlying cause of several financial and macroeconomic phenonema, and therefore deserving of a more central role in trading stocks and commodities.

The broadly accepted classification of disciplines used in trading the financial markets is four-fold: (i) fundamental analysis including macroeconomics (ii) technical analysis, (iii) financial astrology and (iv) quantitative analysis. From (i) I will demonstrate the influence of solar phenomena on growth, inflation, demographics and asset cycles (stocks and commodities), and from (ii) I will explain how solar phenomena drive sentiment, stock market seasonality and waveform. I will also demonstrate the link between financial astrology and solar phenomena, and explain the decennial cycle.

History Of Research In 1843 the German astronomer Schwabe discovered the solar sunspot cycle. By 1875 William S Jevons published his theory (1) that business cycles were related to these sunspot cycles, arguing that sunspot activity affected weather which affected agricultural output and prices which affected overall economic activity. As his supporting evidence contained flaws, he was largely discredited. However, Garcia-Mata and Shaffner (2) reworked Jevon’s theory in 1934 and concluded that there was a clear statistical correlation between the major cycles of non-agricultural business activity in the U.S. and the solar cycle.

Meanwhile, Alexander Tchijevsky wrote the paper Physical Factors of the Historical Process (3). He compared sunspots records to major historical events in 72 countries from 500BC to 1922, and found a concentration around solar maximums. He divided the solar cycle into 4 periods and found correlations between human behavior and these periods: 1) a three year period of minimum activity characterized by passivity and autocratic rule; then 2) a two year period during which masses begin to organize under new leaders and one theme; followed by 3) a three year period of maximum excitability, revolution and war; and lastly 4) a three year period of gradual decrease in excitability until the masses are apathetic. He considered these variations as Mass Human Exitability.

In 1965 Charles Collins found that, based on 93 years of data, a major stock market top is due when the average yearly number of sunspots rises to over 50 (4). Edward Dewey in 1968 found 43 activities that fluctuated with the sun’s 11 year cycle, including commodity prices, stock prices, banking activity, business activity, industrial production and agricultural productivity (5). Bryan Walsh wrote an article in the Cycles magazine in 1993 (6) putting some of Dewey’s claims to the test. By computing the rate of change in the geomagnetic field over the years (using the Ap index) together with the annual rates of for several measures of economic and financial performance (GNP, CPI, stock prices, gold price, bonds), he found the former led the latter by 6 to 12 months and had an average 65% correlation.

Krivelyova and Robotti found strong empirical support in favour of a geomagnetic storm effect in stock returns after controlling for market seasonals and other environmental and behavioural factors (7).

Regarding the sun’s illumination of the moon and its correlation with stock market returns, there have been several recent papers written. Illia Dichev and Troy Janes (8) demonstrated that stock returns in the 15 days around a new moon were around double those in the 15 days around full moons, for all major US stock indices (100 years data) and nearly all stock indices of 24 other countries studied (30 years data). K Yuan, L Zheng and Q Zhu (9) investigated the correlation between lunar phases and stock market returns for 48 countries and found that returns are lower around full moons and higher around new moons by 3-5% per annum, factoring out volatility, volume, and other calendar related phenomena. Marco Hickey (10) found positive correlation between 5 US stock indices and returns around new moons, and the inverse for the 10 year bond (using 10 years data).

In recent years biological evidence has come to light that sunspots and solar cycles do impact humans physiologically, which are supportive of Tchijevsky’s earlier social studies. William Hrushesky, in his 2011 paper (11) noted slight elevations in oral temperature, pulse rate, blood pressure, and respiration rate and a slight decrease in the man’s maximum expiratory flow that peaked several months after the occurrence of solar sunspot maximum.

To bring us right up to date, there is a growing body of evidence that geomagnetic field changes and sunspot maxima affect biological systems, and increasing psychological and biological evidence that the sun’s illumination of the moon affects human behaviour and mood. There are also electromagnetic theories of human consciousness – that consciousness is an electromagnetic phenomenon. However, these are areas in which there is as yet no overall scientific consensus.

Here is a visual of the correlation between moon phase extremes and the S&P500 in 2010-2011:


This article continues in a 26page PDF file (2meg) direct download from the Market Oracle website (will remain available until at least end of March 2012).

John Hampson, UK / Self-taught global macro trader since 2004
www.solarcycles.net (formerly Amalgamator.co.uk) / Predicting The Financial Markets With The Sun

© 2011 Copyright John Hampson – All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2012 http://www.MarketOracle.co.uk – The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Stocks Stealth Bull Market 2011 Ebook Direct Download Link (PDF 2.8m/b)

Interest Rate Mega-Trend Ebook Direct Download Link (PDF 2.3m/b)

Inflation Mega-Trend Ebook Direct Download Link (PDF 3.2m/b)

One of the Best Timers Around Changes His Stock Market Opinion


Todd Market Forecast for Tuesday March 13, 2012
The stock market was higher by a little over 100 Dow points when late in the day, JP Morgan raised its dividend and announced a massive $15 billion stock buyback. There is now anticipation that other banks will follow suit.
 There seemed to be little reason for the earlier rally. Yes, retail sales were perceived as being good, but a lot of that increase was at gasoline stations. The Federal Reserve FOMC meeting and announcement was also basically a non event.
One has to ask, was there sufficient leakage of the JP Morgan announcement to tip the scales toward the upside prior to the announcement.
 Regardless of the reason, the major indices broke out above the resistance zone that we showed in yesterday’s update and this is a bullish occurrence.

Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
DOW                                               + 218 on 1550 net advances
NASDAQ COMP                          + 56 on 1250 net advances
SHORT TERM TREND                         Bullish (change)

TORONTO EXCHANGE:  Toronto gained all that it lost yesterday and then some. We’ll be changing our evaluation.