With the stock market plunge taking the world by surprise this week as gold continued to surge, one of the most important pieces has just been released with Michael Oliver, the man who is well known for his deadly accurate forecasts on stocks, bonds, and major markets.
Michael Oliver audio interview has now been released!
MAJOR UPDATE: Gold And Gold Miners
February 28 (King World News) – Michael Oliver: Our long-term assessment of gold remains positive. MSA has not flinched despite multiple spooky selloffs over the past few years—selloffs that rattled many investors out of being long for the move.
We assessed the drop from last summer’s highs as a likely congestion zone only. It was. In fact, if you look at both charts, the pullback was conservative and tight-fisted. So far a powerful advance above that zone.
GOLD: Powerful Advance Off Of Breakout
Lookback: 2011 to 2012
At the time of that bull market’s topping action, MSA could readily identify a major pending structure below the market—which if broken would signal a top and subsequent bear market. MSA turned major negative in January 2012. Still, the market muddled around with rallies and selloffs over the next year, but with no real gains. The collapse finally came in early 2013. No surprise.
Lookback: 2016 to 2018
MSA turned major bullish in February 2016 (just above $1140) and restated our bull case between October and December 2018 (based on several buy signals rendered by less long-term momentum factors). That secondary buy zone (three signals issued) was between $1200 and $1280.
In this report we’re going to identify levels below the market that would alter our bullish view. No, not nearby, short-term trading numbers. If we did that our subscribers would be in and out of the market every other month, and thus missed the move.
The level on annual momentum that we do not want to see broken below is the upper red horizontal line that was a ceiling for several years and then support in the recent congestion. Next month a monthly close at or below $1460 will put momentum below that red line, indicating failure of support.
That annual-momentum-based alert level adjusts up monthly by $11.
Let’s adjust down to a somewhat less long-term metric. Instead of a 3-yr. avg. equivalent momentum chart (the 36-mo. avg.), here we drop down to what is effectively a 1-yr. avg. oscillator.
First price. The channel top line is plotted through peak weekly closes. Then we plot the channel bottom through the May 2019 lows and extend the line (parallel to the channel top) upward. As it happens, the pullback in late 2019 used that theoretical channel bottom as support, thus turning it into a valid parallel channel. Admittedly it’s very steep and we prefer less steep structures. But using it, one does not want to see a weekly close around the $1530 area.
50-wk. momentum has set up a pivotal horizontal level (going back to early 2018) around $75 over the rising 50-wk. avg. Close a week at $70 over and you can assume breakage is occurring. In price that equates next week to $1515. And that risk control number adjusts up with the 50-wk. avg., which is currently rising $6.50 per week.
And now down to an intermediate trend time-scale, effectively a 3-mo. avg. oscillator.
The uptrend on momentum is reasonably well-defined by enough reaction lows to assume it has some validity. A daily close tomorrow at $1587 would break it. That number adjusts up by about $2.50 each day.
Again, breakage of the intermediate trend does not translate into major trend change, but we offer this for those who might prefer tighter risk control.
An archival comment regarding the gold miners
Some traders and market analysts have noted that when the stock market crashed in October 1987, so did the gold miners. The assumption being that a coincident trend relationship is still in place now. That of course ignores the fact that gold miners were in a major bear trend from 2011 to 2016 despite the U.S. stock market rising.
In any case, what the analysts are missing is that while the S&P500 had been rising at a terrific pace before the 1987 crash, so too had the XAU Index. In the fourteen months leading up to October 1987, that gold miner index had risen from a low of 58 to a high of 157! A 175% gain! Though also excessive, the S&P500 only gained 42% in that same time span. Miners just might have been deserving of a slam- dunk collapse, even more than the S&P500.
Compare: Then and Now …
XAU In 1987
GDX Today: Ready To Break Out
This is why many KWN readers around the world subscribe to Michael Oliver’s annual MSA subscription. For those of you who would like to subscribe to Michael Oliver’s MSA Annual Report at the special KWN discounted rate CLICK HERE.
One Of The Most Important Interviews Of 2020
***KWN has now released one of the most important audio interviews of 2020 with Michael Oliver discussing the stock market crash and why gold will surprise, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
GOLD BULL ALERT AS MASSIVE DOW PLUNGE CONTINUES
ALSO RELEASED: DOW PLUNGE CONTINUES: GOLD BULL MARKET ALERT – Alasdair Macleod Says Bear Market To Collapse US Dollar CLICK HERE TO READ.
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