In my gold analysis yesterday, I showed more or less HOW the arcs look like through the eyes of the momentum analysis. You could see….
- Left arc
- Center chop
- Right arc
- End of trend
These are the STRUCTURES Michael Oliver discusses. I went through all of the math and the concepts with acceleration and deceleration. Now we look to see how this looks with silver.
What struck me as interesting when I saw Kevin Wadsworth’s silver chart was that the cup wasn’t anywhere near complete. I had heard “gold kicks in the door, and silver clears the room”. In a sense, there’s a time delay with the move in gold to silver, and thus silver also tends to lead the end first, then gold follows.
I was expecting perhaps a 3-6 month lag time on that “clearing the room”, but it’s far more delayed than I thought. What do I mean?
Gold is flagging after the cup on its way to building a massive handle…
Whereas silver has not completed the cup yet. Let’s take a look…
So IF this silver move is indeed an arc (I have an alternate theory below), it would stand to reason that this is why silver has gone sideways for the last year and not flagged like gold. It’s in an uptrend and I can see why Michael Oliver was also excited about this momentum structure.
Let’s look at the elements here and compare it to what I saw with the gold arc….
Left arc – you can see the down move on the left in red on the MomStc and the RSI was GENERALLY under 50. There was a move above it. You could see the end of trend in the green to the left of that when the momentum crashed down. On the price action – you still had an elevated channel it was trading in. To me, that was sideways action that was meant to break down.
Center chop – you see this in yellow and the trading range. With this, the RSI trades in the full range and this probably would have been good for shorter term trades to buy at low RSI and sell at high RSI. Like the gold pattern, there was a peak out in perhaps about the middle of the move. This also tied to 2016, so they both peaked for the same fake out move up. What you then see is an extended chop with a violent move up.
Right arc – with this, you can see a sideways channel which appears to be a base for the next move up. Right now, we just touched the bottom line in the channel. It stands to reason buying at these RSIs right now are a good move long term. I didn’t quite catch the bottom, but a lot of my options I bought recently may pay off nicely.
If this is an arc, it would suggest that there’s a sharp move up and to the right coming, and soon. One thing that bothers me about this structure. The RSI dipped well down (this is a weekly chart) and what I saw in the RSI in my gold analysis yesterday was that the RSI didn’t really ever go below 50 in the right arc.
This gave me some pause.
What if silver is NOT actually in an arc. What if this is the handle part of the 1980-2011 run? What would that look like?
Let’s look at the 1980 to 2000 cup….
Like the gold chart, you have the left arc, center chop, and right arc defined – as well as the handle forming down in 2008 which then led to the 2011 high.
But what if we got that wrong? What if we are in a bigger cup from 1980-2011, and we are now moving up in the long handle formation?
What would that look like?
Now – this isn’t quite the pretty arc used with Kevin’s charts – but what am I REALLY interested in?
- left arc
- center chop
- right arc
- End of trend (handle down)
What this looks like to me is a 31 year cup formed. It is a longer flatter bottom, but remember, to me, I care about the arcs and center chop, not the price action up or down in this center.
But Nate, you can’t just make shit up, right? OK – so I dug in…
This to me is a shallower cup over that duration.
I then did a search for cup and handle to see what else out there might look like this, and one of the first things I saw was..someone drawing the same thing. But that looks like 2016. We then saw 4 years of sideways action, and then next move up. This is the “momentum structure” that seems to have Michael Oliver giddy.
What this would suggest to me then is that Kevin’s arc has $50 silver, but in 2023ish. What if…what IF this is the beginning of the sharp move up to complete this handle? Remember, to measure moves, you take the top to of the cup to the valley bottom, measure that, and add it to the top of the cup. $50- $3.50 is a $46.50 move up on top of $50, or a $96.50 target – probably before 2023. If you take the cup and handle in gold from 1980-2011, the measured move is ALMOST that exact measurement – from the top of the cup to the peak of the valley. It’s pretty close…
For those of you who didn’t see yesterday’s stuff, here’s how gold’s cup and handle worked out…
So – the big question is that are we 3-6 months behind the gold cup and handle, and we just never reached the $50 high like gold reached the $1923 high, or are we looking at a different structure than gold completely – where we are just building the up move in the handle now? The momentum structures are showing that silver now is in a good place on the MomStc chart, and as it is approaching zero now, it’s due for another violent launch up.
Or, could this have been a failed cup and handle from 2011 like gold and silver just never caught up?
What Kevin did with his Palisades interview yesterday was have an upside down arc over the DXY – but much, much smaller than how I drew mine. Take a look at how much deeper I drew mine.
Now, is HE right? Probably. I’m an amateur. There’s probably rules on this somewhere I missed, but I’d like to then present tp you the structures.
Left arc – you can see the RSI over 50 and the MomStc having lots of green and spending lots of time over 0.
Center chop – RSI ranges from 30-70 and tradable channels within the range. 2018 dip. You then see a smaller channel to the right side of the chop which looks to about to break down.
Right arc – this is where I believe we will see the DXY under a lot of pressure. Over the next few years, I see printing, inflation, and devaluation of the dollar. Will it arm wrestle down? Will it drop off of a cliff to 85 and go sideways for a year before breaking down to 80 and 75? Looks like the next time the WEEKLY RSI gets below 50, we could enter the downside arc.
End of trend – this timing comes out to 2024, which appears to be the cycle low for gold. Possible this arc doesn’t complete and a crash sends this way higher. But for now, I’m focused on the right arc with a drop down.
Overall, with the DXY I can see how this going down can coincide with gold moving up in it’s arc AND silver VIOLENTLY moving up and outperforming gold to get to it’s $96.50 target.