Loading ...Simple Reassurance
By combining traditional TA, careful use of indicators, and cycle theory, we can develop a level of confidence in the overall trend on a timescale of months to years. Here are 3 charts which do just that:
1) TA
2) Indicators
3) Cycles
Does this mean it’s impossible for something to happen which takes the price of PM’s down ? Not quite, but it’s all about probability and confidence levels, just like my day job. Right now, my confidence level that PM’s are heading substantially higher in a new bull market are high (above 90%). Many here are aware of this, but the investing public and big institutional money are distracted elsewhere. That’s a good thing at this point in the cycle. Contrast this with the stock market and cryptos. Hang on to your hats – the next few years into the mid 2020’s could be pretty wild.
Very nice write up Northstar! Question for you – since the cycle 2001-2012 resembles the cycle in 1977-1980, do you expect the next cycle to resemble 1985-2001?
Good Eye Sir KenS
Good answer Sir Northstar
Personally I lean towards the 1985-2001 scenario.
Fractal exactal
🙂
I’m pretty skeptical about fractals. People see them all over the place, and in my experience they’re not very useful. I used to note some of them and check back, but they only seem to work “after the fract-al”.
I think too many things are different now versus the America of 1985 through the 90s. All of the “unprecedented” debt issues will have to be dealt with at some point.
That is a great question Ken, and one I’ve been grappling with for a while. The simple answer is, I don’t know, so I’m taking it a stage at a time. We know the larger cyclical peak is going to be in the mid 2020’s, so once the uptrend develops further we can start to refine our price targets. Taking the 1985-2001 cycle as a starting point, the price climbed from approximately $300 to approximately $500 in less than a year (a 60% increase). I’m keeping that in mind, but time-wise we are already diverging from that analogy because we didn’t gain 60% in anything like that amount of time – it was more like 35%. A 60% advance off the low would take us to more than $1600. As it happens, my initial target for this year is in the $1550 region, with about a 20% chance of getting closer to $1800.
My gut feeling is that it’s going to be very different this time. Why ? Because I’m expecting to see the dollar in the 60-70 range, with significant commodity inflation. I’m also expecting several ‘crisis type’ developments as banks, sovereign debt, personal debt and currency wars take hold. I just hope and pray it doesn’t lead to any kind of global armed conflict.
I see things the way you do North Star. Thanks for the Succinct post.
Awesome, thanks!
This is a really helpful perspective, Northstar. Thanks for sharing.
Thanks for the comments – glad it’s helpful.