Loading ...Putting Mean Reversion in Perspective
So I started thinking about mean reversion which Gary Savage keeps hammering on. Take a look what that looks like on a monthly view with a regression channel. Serious bottom fractal action here suggesting no gentleman’s pull back until we spike north of 400 on the HUI. He is going to sit on his hands the whole way up because he expects prices to go back to 175 first.
Great chart, Mark. That does look like what is going to happen, with HUI following the move in 2001.
I see there’s now a bit of a smackdown going on at Gary’s site and he’s singled out our very own Plunger!
http://blog.smartmoneytrackerpremium.com/2016/05/burrito-bet-2.html
What cracks me up is Gary posting a weekly chart of gold showing the 200MA which is supposed to provide evidence on how difficult it will be for prices to bust through that level without a huge pullback first. The chart shows how easily prices FELL through the 200MA like hot butter on the way down. The drop from $1800 to $1250 took less than a year, creating a huge thin zone….trades could slice easily back through that zone….like buttah.
My chart above certainly supports Plunger’s 400 HUI target too. It certainly doesn’t seem worthwhile to finesse your way in out. Read the comments in the link by Robert. I wonder how many share his sentiment that at current prices or even consolidating prices, gold isn’t even worth a position anymore.