This week we discuss seasonal market movements in relation to the price of gold, silver, platinum, palladium, and the ratio opportunities available due to these movements.
Seasonal Market Movements - Gold, Silver, Platinum & Palladium Price Movements
Michael Mauboussin: Challenges and Opportunities in Active Management And Using BAIT #MICUS
Welcome back. The golden rule radio we saw France win the World Cup and the last time they did that was shortly before gold put in a bottom. Back in 98. So it looks like we may be seeing the same lineup here not to try to read too much into that because there's no correlation there. But no addictive power of outcome. Well twice is a coincidence three times as a pattern so we'll have to see what happens in four years. We're seeing gold do exactly what it should be doing at this time of year which is coming down and it's come down into the numbers that we've been looking at in the low 12 hundreds and it needs to hold somewhere in here whether it's 12 25 12 12 11 eighty five. But I think it's going to turn around right here in this seasonal pattern that it usually shows. And Silver doing about the same thing coming now into the mid fifteens going to hit another Phibbs level soon. So looks like we should see the metals market turning around before we get to your charts Miles. Just to piggyback on what Robert just said it's uncanny to me the technical numbers that you guys have been coming up with 12 40. I'm sure you're going to explain that a couple of bounces that we had there for 12 25 is what you'd been saying 12 12 very consistently and potentially 11 85. So throw the charts up there and walk us through exactly what price history.
Yeah I mean it really is the difference between coincidence and pattern when you see things play out over and over and over again over long periods of time. You just start to make assumptions. And as long as your assumptions are more likely than not that's perfectly fine. I think it was Richard Russell that said in the equities market you only have to be right 51 percent of the time to make a lot of money and I've always appreciated that statement. So as we see these patterns play out I mean we've been talking low 1200 for quite a while here. So we're excited to see it down at levels where you see trends and you see charts and you see pricing blow off steam that they had. Rebuild a new base and then start moving next towards their next highs. So down here at about 12 20 we bounced 12 20 today Wednesday shot up to about 12 28 12 29. I think we are still coming down a little bit further. Certainly could be proven wrong but you see the way the relative strength index is acting. You see the way the moving average convergence divergence is acting. You see the way the prices acting. Not only do I think we're coming in a little lower but I think when we hit these lower prices you're gonna have a lot of standing by orders in the futures and options market. And I think we could see a reversal down here just above 2200. I'm sticking with 12 12. You mentioned Richard Russell.
And it reminds me about the Dow Theory confirmation or non confirmation and you could be seeing in the metals market right now a non confirmation to the downside with the mining shares the mining shares have not followed gold down proportionally. They've held up they're above their previous lows and that could be somewhat of a non confirmation because the mining shares may be leading here. I love it and you're not talking about just today or this week you're talking about like a seven week eight week period of time correct and maybe even longer if you go back to see look at the previous lows in the mining share indexes and you see them the current price of the mining share indexes above those previous lows whereas gold might be slightly below as well as silver might be slightly below coming off that silver high back in July August around 2016 obviously we've seen this compressing pattern now for quite a while. We've been talking about it for quite a while so we've now made our fourth touch down to the bottom trend line of mid fifteens. I have a couple clients who've been waiting to jump into silver looking for that 15 50 mark which we've hit so obviously the question is do we push below it or do we reverse the odds say reverse. However we'll have to see how that plays out over the next.