Gold, Silver, Equities: Secular Megaphone Patterns

Examine the 20 year log scale chart of monthly gold. I have drawn lines connecting highs and lows. The result is an expanding channel or megaphone pattern. The increasing prices are exponential (log scale chart) because of exponential increases in debt, money supply, and Keynesian craziness, although I have no graph to prove the latter.

GOLD_1995_July_2015

 

Examine log scale charts for silver, crude oil, the Dow Transports, and the S&P 500 Index. You can see similar exponential increases and megaphone patterns of much higher highs and deeper lows.

 

silver_1995_July_2015

crude_1995_July_2015

 

DJTRAN_1995_July_2015

s&p500_July_2015

I have circled important chart lows and highs, and related lows and highs in the MACD and TDI at the bottom of the charts. I have also added dashed lines indicating my estimate of the future direction of prices.

WHEN? Ask the high frequency traders and central bankers, since they exert substantial influences on prices, but market forces cannot be repressed forever.

THE BIG PICTURE AS I SEE IT:

  1. Prices for gold, silver, crude oil, other commodities, and equities are exponentially increasing in the long term.
  2. Debt and money supply have increased exponentially and have driven prices much higher. Equities benefit for years and then commodity prices benefit for years.
  3. Equities have enjoyed a very long bull market. It may have topped.
  4. Bonds have been in a 30+ year bull market. When some European yields go negative past five years duration, it is time to anticipate the death of the bond bull.
  5. Central banks want to levitate bonds, levitate equities, and repress commodity prices. Clearly they have temporarily succeeded. Their ability to manipulate prices may survive a while longer, but commodity prices will eventually follow the increasing debt and money supply. Debt and money supply will increase, so in the long term commodity prices will also increase, unless there is a violent reset.
  6. Higher gold, silver, and crude oil prices are coming. Lower prices for bonds and equities are coming.

 

 

Gary Christenson | The Deviant Investor

from http://ift.tt/1J2qiJL

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