Long Term Patterns in Stocks, Gold and Crude

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by Gary Christenson, Deviant Investor:

The green arrows are 10 years long. Peaks indicated are in 1987, 2007, and potentially 2017.

The pause in 1997 was not a top because the market rally extended into early 2000. The current peak in 2017 could also extend, but valuation and timing indicators show high risk.

When the monthly RSI (timing indicator at bottom of graph) exceeds 70, turns down, and prices fall below the red support line, a significant correction or crash is possible. Those crashes occurred in 1987, 2000, and 2008. The S&P is ready to make a similar correction or crash in 2017 or 2018. The RSI has reached its highest level in two decades.

The S&P 500 Index, DOW, NASDAQ, DAX and many other indices are excessively high, thanks to central bank “stimulus” and QE policies. The monthly chart of the S&P shows S&P prices are in a high risk danger zone.

Possible tops have occurred before, but instead of crashing, the market sometimes zoomed higher. Do you own due diligence.

Also, read “Hindenburg Omen Meets Titanic Syndrome.” However, if you want to believe the S&P is going higher, read “Stock Market Crash … Another Lie.”

The Gold Market and its 10 year pattern

 

The gold market has an approximate 10 year low to high pattern.

Gold: 2001 – 2011

The dashed green arrow shows that gold bottomed in April 2001 and peaked in August 2011, ten years later. Gold prices bottomed in late 2015 and could rally for many years.

Gold: 1970 – 1980 & 1982 – 1993

Gold sold for about $35 per ounce in 1970, although the market was controlled. In January 1980, ten years later, it sold for over $850. Gold prices crashed to a low in June 1982 and eleven years later they peaked in August 1993.

A ten year low to high pattern, beginning with the late 2015 low in gold prices, suggests a gold price high during the middle of the next decade.

The Crude Oil Market 1998 – 2008

Crude oil prices bottomed in 1998 at under $11.00 and rose to nearly $150 per barrel in 2008, ten years later.

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