Conventional Wisdom & Contrarianism
So, wouldn’t it be the perfect irony if just when we all accept the “conventional wisdom” that a stock market crash is going to create another sharp drop in gold and silver prices before the ultimate buying opportunity with a huge upside reversal, it ends up being a giant psyop. Even Clive Maund, whose work as a technician and contrarian I greatly respect, has just reminded us of the same using the comparison of such market behavior from 2020, as the perfect example. Since the markets usually don’t repeat the most recent pattern, I doubt such an opportunity is going to be handed out to investors on a “silver platter” as I recently described in a post on this very subject. Unlike 2020, gold and silver especially, have been correcting that 2020 spike higher for the last three years. Silver in particular has been conveniently capped everytime it was about to break above key levels that would have launched it higher. Everyone and his brother now expects a complete smashdown of the metals if stocks fall hard here in this dangerous time of the year, for equities and everything else. Of course it can always happen again, I just don’t buy it. As a contrarian and looking at the charts of both gold and silver, the surprise contrarian play would be that if stocks do fall sharply the metals surprise by first holding support and rapidly morphing into a bull run higher. We should know fairly soon how it will play out.
Makes sense to me. Overall, I’d say the “PM experts” have a terrible track record on their predictions. I stopped listening to most of them.