Michael Oliver Silver Is In The Acceleration Phase | Arcadia Economics

No matter which way we look at this thing, we come up with the same conclusion. We’re in the acceleration phase. And the final dramatic part is about to happen. The land of Arcadia. Well, hello there, my friends. Chris Marcus here with you for Arcadia Economics. And something I’ve been looking forward to a while, for a while is that we have Michael Oliver of momentum structural analysis joining us back on the show because I know a lot of people follow Michael quite closely. And certainly you’ve had some interesting forecasts for this year, Michael, some of which we’ve started to see already manifest.

And obviously in terms of the election that we didn’t get any more certainty in the past couple of weeks, shall we say. And a lot of things happening out there and always fun to check in with you. So before we get started, how are you today, my friend? I’m doing just fine, thanks, Chris. Well, the news we’re recording Monday afternoon, obviously the news last night, Joe Biden officially dropping out of the race. We’ll see who ends up being the democratic candidate, but perhaps we’ll come back and touch on that because first to dig in, would love to get your thoughts.

Obviously this year we finally have seen some of that rally that many people have been waiting for for quite a while. Maybe you could give us a recap of what you saw in the first half. That leaves gold just under $2,400 today. Silver at 29.24. And then we can after that, jump into where you see things heading, going from there. Sure. Context. The bull market in gold and silver began from a bear low in December 2015. Gold then was 1050. Okay. And most of the gold bull markets, if you go back in 50 years and look at them, they last, you know, either side of a decade.

So it’s not like, oh, two, three years. There’s your bull market. Yeah, there you go. And anyway you can see that the one in 2000 ran up to 2011 and eleven years there. Okay. And you don’t go quite far enough on the 1980 peak, but you can go back to the mid seventies and see scold was in the thirties. Okay, now here we have a situation where we started from thousand 50 December 2015. Now we first came off that low. Yeah, right there. Two months after that low, MSA put out a report saying we’re no longer bearish.

And we got bearish in January of 2012, by the way. No way. Up three months after the high. Anyway, annual momentum of gold, not the price chart. Price chart was making a low. It looked like hell. You know, it’s going down forever. Annual momentum of gold, where we measure each month’s action in its relationship to above or below a 36 month average, had created a structure that if you looked at the momentum chart, you’d say, wow, what a base. Whereas when you look at gold, it was just descending. But on momentum, it was this for a couple of years flat.

We broke out, we gushed. We had a buy signal, 1140. We gushed up to 1360 in a matter of a few months. That was like the first, I’m back. Okay. Gold saying, I’m back. Okay. That was that first rally off that low. Then he went, what, sideways for a couple of years there between 1350 and back under 1200. And then you took off again and you ran up to the 2020 high. When you get up to 2070, I think it was March of summer of 2000. No. Yeah. No, in early 2020, you got up to 2070 again.

And you, what did you do? You topped out, you had a flush out back into October of 2022 where you went down. That last little spike down there in October 2022, that went to $1,615 or so. I remember those days well, quite a ways we’ve come since then. Now, when you look at a price chart, you blew out a bunch of horizontal lows. So you think, oh, it’s all over. You’d have a top completed because the price chart says so. Momentum said, no, it’s not a top, it’s merely a clean out correction. And we v bottomed off that low.

And next thing you know, you’re back over 2000 again. Okay. And then what do you do? You labor again. Okay. You know, the 2000 crowds up there still sell and think it’s going to last forever as a top. This time, instead of falling apart, you went horizontal either side of 2000. And in late 23, you shot up again. And finally, in March of 2024, this year, gold on annual momentum had developed a range of action that had prevailed from that 2020 high through early 2024. You don’t see it on price. Price is irregular, but on momentum, there was a nice flat ceiling and you blew through it coming up in March of 2024.

Now, at the same time, though, the lagged gold miners, which had not gone sideways, had gone down during those years, and silver, which had gone down from 2021 high to 2023, had the same type of structure on annual momentum that gold had, meaning an easily definable square range. And they both broke out the same time as gold, basically late March. At that time, our buy signal on silver was 20, 517. I think it was which if you close a month above that, you’re gone. Well, it didn’t mean anything on a price chart of silver because you had plenty of highs up 26, 27, 28.

But in March, yeah, you can see you go back to August, it looks like 20. Go back a little farther out. Yeah, there you go. You see the multiple highs that are the cluster just above 25, actually, you’ve got those must be weekly closes. But most of those highs, actually intra week were 26 plus. Okay, came up through 25, and you gushed up over 30, pull back, and then you shot up to 32.75. While gold was still going sideways, starting from April, May, June and July, either side of 3400, I mean, 2400, excuse me, silver had hit a peak just above around 30 pullback, and then in May shot up to 32.75.

So it was even stronger than gold following that march annual momentum breakout that we had on the miners in silver and gold. And in fact, if you go back and measure year to date, measure from a February low, which was a pullback low in all the metals, silver is way up more on a percent basis than gold is. Despite its recent pullback, even with the pullback, you’re still up more than gold is measured from those pivot points. And so are miners, by the way. So we’ve seen a shift in these initial three months of that surge.

April, May, June. Okay, boom, boom, boom, where it sort of shocked people. But something had changed in the tenor and tone of the market. You know, what they’d been used to is a trading market where you could apply all your little simple on your screen trading tools to trade in and trade out, trade in and trade. It was a range bounden happy situation. But what happened in March said, no, it’s over as far as we’re concerned. It said, it’s over. The range bound stuff is over. The pause, the multi year pause in the bull trend is over.

We’re resuming an aggressive bull trend. We went back and researched the action that silver and gold had, especially silver, focused on it right now because it’s the leader in terms of percent gain. What happened to silver in the 79 to 80 blow off phase, which again was the latter part, the last year of that bull market that had already been going on since the mid seventies, or what happened to silver in late 2010, gushing it up into early 2011 when silver reached 50? Silver actually hit a high in 2011 before gold did later on in September.

But that gushing move that we saw in silver in those final handful of months of those already aged bull trends was a massive acceleration of price and momentum where all the old rules throw them out the window. It just went vertical. Silver went from the teens to 20 to 50, etcetera, and did it in a matter of three months or so, actually. What the acceleration phase in both cases will lasted about three quarters. What happened was, and we were already into that process as far as we’re concerned. Pardon me if I’m getting long winded here, it started when we broke out in late March.

So let’s say April, May. June you had a surge, especially April. May you had a big price surge in gold and the miners and in silver. And then you had, if you look at gold, it paused in April and May, and then June is a waste of time. And so far, July is still around 2400. So there’s been several months of sideways price action. Yeah, there you go. Now, if you see silver there, you’ve been in this range. Where is this, daily or weekly? This must be daily, I think. But since May, you’ll notice that we’ve gone really sort of sideways.

In other words, you made a high, but you really haven’t collapsed. They tried to. They tried to collapse it, but it didn’t. Came back up again. You know, it’s like, you know, you beat me in the head and I come back up. This is not behaving in any way, even on a price chart like a top in gold or silver. Normally when gold makes a top or silver makes a top, that’s meaningful and you get a real pullback. You don’t come back to that high again. Once you make it, you drop hard and then maybe you have a reach back attempt, but you don’t go back to the high again.

In gold’s case, made a new high. In Silver’s case, you went back to 32 again a few weeks ago, top dollar tick. And they sold it again. 32. Let’s sell 32 forever. Okay. Right. Okay. This is exactly what happened in the mid phase of the acceleration process in 1979 after the first gush up. That said, okay, I’m accelerating. You had a three month pause. What happened during that three months is the following. Price went into an up down range. The case is silver. It was a 15% range, top tick to bottom tick of the range. And 2010, December and January of 2010 and eleven, silver also went into a range bound situation.

Michael, I have those charts up here as well. So here’s 1970. We have 1980 and 2011. Okay, what you’ve got? Yeah. Okay. See that clump of ink around either side of 17? $18. There. This is daily, obviously, you’ll see. You rushed up big time. From late August, you rushed up to October, and then early October made a high, backed off, made a marginally high. But for October, November and December, you went sideways. Not a top again. They tried to beat it, but it wouldn’t collapse. And when you oscillate that on monthly momentum, which we take each month’s bar and measure versus a three month average, what you had is you had a market that got extremely overbought in that initial wave of the acceleration phase, namely here from August through October.

And it wanted to correct momentum, wanted to correct price, said, okay, I’m going to let you correct what happened. You see, there is price going sideways, but momentum had a sharp pullback and pull back to the three month average area, the rising three month average, a fairly intermediate metric. Okay? So you cooled off from vastly overbought readings to more or less what you’d call neutral, non overbought momentum readings. In other words, the market was refreshing itself. And in so doing, it bored everybody for three months. And they thought, that’s the top. That’s the top. It’s when it came up out of that range in early in December, you exploded.

So actually, from a November low through December and into January, you reach $50 on sober. You don’t show it here, but actually there was a peak at 50. Yeah, you may have a close only here of the spot month, but the active contract reached $50. This is in 1980. We’re talking now. That was the end of it. Okay. But the acceleration phase was that initial push up, the three month pause, and then came the final three months of absolute, no stopping it, just total, off the page rocket ship. Okay, you say, well, that was an isolated event.

No, it wasn’t. Same thing happened in 2010, 2011, where after much period of uptrending, actually from a 2000 price low, 2000 year price low, gold made its low, silver made low. You went up, had a pullback in 2008, but you kept going up till 2010, and then you entered an acceleration phase where you had a three month gusher on the upside, and it peaked out, I think it was in September, October of 2010, for silver. Okay, now look at October. You’ll see there’s a gush up to October and you got up to like 24 and a half dollars there.

And actually there was three monthly bars. This looks like daily or weekly. This is daily, where price went sideways and you had a 15% drop from a peak to a low, just like you did in 79. You had a 15% top. The low top trade. The low trade. So a range bound situation that prevailed until you got actually into December. But silver made its peak in April of. No, hold on. Yeah, I’m wrong on that. Let’s go back to look at that chart again. Yeah. The congestion phase back in 2000 was November, December, into January of 2010.

Yeah, right there. This zone here, about $25 up to about 29. That was a three month congestion zone. And after that was over, you went to $50 in by April. Okay. You really take it off in February. So there was actually three monthly bars there that we showed a corrective process in silver, while price went into a zone, 15% wide zone of up down action. Momentum corrected from vastly overbought monthly momentum down to the three month average again. Okay. Or close to it. The 79 didn’t quite get to it. 2010 did get to the three month average.

And at that point, the next bar, the fourth monthly bar, meaning in this case, it would have been in January of 2011, 2020, 111. Yeah. You accelerated in April and reach $50 in three months. We think we’re at that point now where one, we’ve begun the acceleration process that began March, April into the May, June, now July range bound situation here. Silver today pulled back within about six. Its three month average. As far as I’m concerned, that’s good enough. It’s cooled off from $8 above its three month average down to effectively zero on that oscillator. Very cooled off now.

It was super hot, it needed to cool. And during that time, silver went into a 12.7% price range, not even as wide as the other ones in that pause period. We strongly suspect that you’re near the low of this pullback, or maybe you just saw it. Actually, the lowest low we saw in the pullback was a month or so ago. We got down to 28 50 level. Today we got down to 28 96. I think you flip up starting from, let’s say, right about this time or next month especially, you start to flip up again and you’re entering that final phase that is very much reflective of what happened in late 79 into the $50 peak at silver in 1980, or what happened in between late 2010 into April of 2011 and silver hit 50 again.

Now, let’s say that happens, and we are pretty convinced it’s going to happen. The technicals are too. Are behaving too well, too much in line with those situations in all contexts. No matter which way we look at this thing, we come up with the same conclusion. We’re in the acceleration phase and the final dramatic part is about to happen, likely beginning next month. Of course, we have a Fed meeting beginning the end of this month, early next month, Monday, Tuesday, Wednesday, next week. Don’t be shocked if they cut rates. They’ve already told us they’re going to cut rates sooner than later.

And there’s enough things going on out there. Uncertainty. There’s all kinds of areas like the yen. They can’t allow that to drop. That’s impacted by us yields relative to Japan. Therefore, it’s a fed issue. They’ve got unemployment numbers that fit their models of, oh, we better pay attention to the employment mandate. Powell’s in effect said we’re cutting rates earlier. There’s 100% chance among consensus that they’ll do it by September. Don’t be shocked. They do it in July. And you can go back. My son Brett has done a study on the fed cuts and how they time in relation to these.

And it’s very interesting that somehow silver sort of knows it’s coming and when it does come, it takes off anyway. But we’ve got a meeting coming up, and it wouldn’t shock me that around the time of that meeting, early next month, we begin to see the launch again. The final phase of this acceleration question is where are we going? Yeah, and a lot that you shared there and a few questions that have come up, one that we discussed and you touched on a little bit, but I think it makes sense what you’re seeing. And it was interesting the way you phrased it right before we hit the record button.

But in terms of a forecast like that, sometimes we think there’s a chance, sometimes this is a high probability to happen. Anything you could put on the context of a probability of that playing out roughly on a timeline like that, if we see a further, we start to see firming once again, again from this range bound three month situation, just like late 79, late 2010, early 2011, we start to see it firm up in this 12.7% range, especially next month. I don’t expect dollar 50 to even be a pause point. Not even a pause point. I know every technician out there only has one reference point left on the charts anymore.

That’s the old price highs at 50 and 50. And they think, oh, that’s got to be a barrier. My bet is you don’t even pause at it. The question is, where are you going to go on the other side? And I don’t know. There are long term measurements of the ratio of silver to gold that suggests that gold goes to a normal bull market peak and by the way, gold normally has eight full bull markets. You measure from bear low to bull high. At least they’re Eightfold. Well, we’re only double. Plus you have an Eightfold. You go to $8,000 gold.

Now, what in the world could cause that? There’s a lot of things out there that could cause it, okay? They’re all happening right now, even, and you’re not going to incrementally go there. Now, if gold ever went to 8000, silver went to a normal percentage relationship to gold, which in the last 50 years, silver’s been 2.5% of the price of gold. Probably ten times ten different years at the 50. It’s been the 2% of the price of gold 25, 26 years out of the last 50. Well, do 2% of 8000. Okay. You know, you could go off the page.

I don’t know where the target is, but I think that the next three months, starting next month, in other words, between here and October, prior to the election, I think silver could do things that would be, frankly, awesome. And unfortunately, I can’t put a tag on it except to say I’m very confident that you come up out of this zone, you’re not going to stop at 50, and then it’s white knuckle flight because nobody then has a reference point. The price chart is jump off cliffs. They don’t know where is it going? They have no idea.

Okay? Only momentum will help us at that point. But again, following what’s happened twice before in the last 50 years, what I just described could easily happen again. And so far, it’s happening almost month by month, the way it did in those two occasions. Yeah, well, it certainly would be an ideal time for something like that to happen. Obviously, we continue to see the numbers showing silver market in a deficit, as you mentioned now up to, I believe it was 98% this morning of Fed cutting in September. Although one thing I wanted to run by you, I’m curious, how much emphasis do you put on what we see happening with the BrICs, where I’m seeing reports that things are a little more further along now, that it’s not just Sergey Glasiev, but that Putin has been broached on that plan and that we’re seeing a move towards gold there.

How does that factor? There’s two markets to watch now because silver and gold have already engaged as far as we’re concerned. They gave the big buy signal back in March. Okay, we’re not debating that at all. From our technical perspective, the stock market’s still going up, but we think it’s topping right now. In fact, you drop about 4% from where we were Friday and I’ll pound the table and say that was the top. You had a teasing six months out above the 2022 price highs on very few indices, by the way, S and P and Nasdaq due to few stocks and it’s over.

And that therefore that asset category is shifting its trend. Then look at T bonds. T bonds had been tracking with gold fairly well over the last couple of years. They got out of sync by a few months, some months ago where both of them ran up to late last year and pulled back. But bonds stayed low. Gold surged ahead again, whereas bonds have stayed capped off. T bond futures, for example, slightly above 120. They keep getting capped off there. T bonds look like they’re ready to come up out of the hole in a big way, meaning yields drop.

Now again, I’m not talking long term, I’m talking something that may happen and transpire within several quarters. That’s all. Major counter trend move in bonds drop in yields. It looks like that’s about to happen. You close out this month about a point, point and a half above or. Yeah, about a point and a half above where you’re trading right this minute. We got a breakout. T bonds are breaking out and joining gold. So there’s another major asset category that’s about to crack through something. In this case an upside breakout level on momentum. The other one is the dollar you mentioned.

The bricks dollar index has been the dullest it’s been in many years. Starting from. You’re going to flip up a chart there. Yep, pulling it up. Okay, good. Let’s wait for that. All right. And here is our dollar index chart. Okay. Now, back in 2022, which you don’t show, we were up at 115 on P bonds. Yeah, there you go. That spike when you collapsed into early 2023, you can draw a line sideways from that first low in January 2023, and you have oscillated either side of that thing for a year and a half now, minuscule single digit percents either side of that low that occurred in January 2023.

So the dollar has gone nowhere. So in other words, here’s a major asset category, the large currencies. In this case, it’s the inverse of the, of the euro, basically. Euro is 57% of this index. The yen is like 17% dollars going sideways. In other words, it’s not. It’s been the quote we call the quiet one. You always got to watch the quiet one. You know, he’s the guy that’s going to upset you. He’s been very quiet now. We dropped down. We’re 100 436 right now. We broke through enough long term momentum factors two weeks ago, breaking through 104.40, and we closed last week below 100, 440 as well, where one of our metrics is already broken.

But we’re waiting on quarterly momentum to break. And that’s when we measure each month in its relationship to a three quarter moving average. If you close out this month or next month, any month this quarter below 104.05, we’ve traded below there. We argue that this zone of quietness you’ve seen here for a year and a half is gone. We’re going to go down and go down pretty sharply, meaning here’s yet another major asset category, a tectonic plate that’s about to wake up and do something that probably will surprise people, meaning get dynamic, in this case, to the downside.

So we think we’ve got the stock market and dollar both ready to break down. We’ve already got some indications from stock market and the dollar that they’re starting. T bonds are poised just below a major upside breakout level. So we have four categories here, the monetary metals, the bonds, the dollar index and the S and P, or the Nasdaq 100 already to crack through significant momentum trend structures that say they’re about to become dynamic in a different direction, thereby joining gold, which is already dynamic in the upside direction. So we think it’s going to get real noisy across the board in terms of the core asset categories starting real soon.

That may help provide some of the fuel about the situation I’ve described for the monetary metals, namely rapid acceleration. And I think the dollar could be a major contributor in terms of that. Well, I could certainly well see that being the case. Imagine you saw this last week. Here was from JD Vance, the new vice presidential nominee. Devaluing, of course, is a scary word, but what it really means is american exports become cheaper. So not getting someone who is adamantly opposed to devaluing the dollar. And Michael, two last questions, if I may, and I’ll give you a chance to comment on any of the politics would be the last one.

But real quick, before we get there, you touched on this a little. We’re saying if we do have that forecast you suggested play out by the election time, little bit, all bets are off. What happens after that? Although any insight the last two times we came down crashing pretty hard. I don’t think that’s going to happen this time. That’s a good question. So we can see that reaching a level like that and staying there this time, I think you’re likely to change reality such that gold is probably going to become, in incremental phases a global currency again.

This country, then that country, then this country, then that country. Once the realization hits among academicians and so forth, not just the people on the central banks, generally a stupid crowd, but the academicians around them are going to look back and say, you know what? This last hundred years of this central bank silliness, it’s just been boom bust cycles. It really hasn’t worked, you guys. Boom bust the monetary policy, and sure enough, we get boom bust markets. And it has not created a copacetic world. And I think things are about to get very uncopacetic anyway because of the political events.

But I think that intellectual counter trend wave is beginning. I’m seeing some of it in Europe and talk, I think that I’ve said before the last year, a couple of things are going to happen in 2024. And one, we’re going to have an uncopacetic outcome to the election. I don’t care whose wins, we’ll take sides. Whichever side wins, it will not be a normal, happy outcome, and I’m not going to predict how unhappy, but it’s not going to be the normal. Well, okay, well, we’re the losing party. We’ll come back in four years and beat you.

Meanwhile, we’ll fight you in Congress. That’s not going to be the outcome. Okay. The other one is, I don’t think there’ll be a federal reserve in the next five years, maybe even sooner. I think it’ll be abolished, especially if Trump comes in. Another thing, I wouldn’t be shocked if income taxes are abolished largely because it’s dysfunctional, especially if we go into a downturn in the stock market and we get another 20080 nine economic consequence, which I think we will, that’s going to hurt people’s ability to even pay, much less pay on time and so forth and so on.

And therefore, already the IR’s is not very functional percent wise in getting the revenue they’re supposed to get. So it’s a dysfunctional source of revenue for the government, unpredictable source. And I think that even a lot of Republicans in Trump have mentioned the possibility of something other than the income tax. A lot of major things could change here and change very quickly, especially when these four different asset categories we’ve defined, gold’s already in its acceleration phase, monetary metals. But if T bonds engage, stock market engages dollar engages, all of a sudden the noise and the impact of these tectonic plates hitting will have real world consequences, not just affect the markets, but affect everyday life.

And I think a lot of changes will occur there and I think those changes will be such that when gold gets up there, no, it’s not coming back down this time. That’s its new reality. Yeah, I know what you mean. And I’ve heard you mention before how sometimes these things don’t change until they are forced to buy the markets and may well be seeing that play out. Last thing, Michael, just in case you had any other comments on any of the politics or the news with the election that you’d like to share. I mean, it looks like the outcome is pretty clear, but you never know.

I’ve said it over a year, it didn’t matter who won this election. The outcome this time is not going to be a normal, oh, well, that kind of outcome, the process continues. I don’t think so. I think it could become quite abnormal, dysfunctional, upsetting, noisy. And I don’t think that’s baked into the markets, do you? I don’t hear CNBC or Fox business talking about that as a stock market variable. Think about it. It seems like maybe it’s starting to sink in. I guess the maybe. Geez, when you think of the last 8910 days, a lot, a lot has happened quickly.

Especially seeing many people who have kind of laid out, especially on the Biden news, him stepping down, that seemed like this was knowable beforehand. So that has the markets, have the markets fully priced in the what we may see. I would suggest that you’re right that it hasn’t. It’s going to be an interesting time. But I think rather than waiting for it to end and then see what happens on the other side, I think the monetary metals could well price in that potential chaotic outcome well before it happens. Well, it sure will be exciting to watch and I just appreciate you made some time.

It’s always fun to catch up with you and I know people in our audience really enjoy hearing from you. So thank you for being here. And Michael, just before we wrap up, if you could let folks know about the website and some of the things that you do there and what they can find, go to the website and you could find out about why we have an unorthodox methodology, find out something about our history, see some of our past reports and request some samples. Be happy to send them to you anyway. Thank you, Chris. Well, I enjoy the samples.

I enjoy following what you’re doing. I know Vince is a big fan too, and just nice to learn from you over the years and we’ll have to catch up and do this again perhaps around election time. We’ll see how it goes. And thanks. Just thanks for making some time. Appreciate it. Thanks, Chris. Well, thank you to Michael for today’s fantastic call. Always really nice to catch up with Michael. Obviously, he certainly is one of our more popular guests on the show and a lot of interesting research that he does and quite well known in the gold and silver community.

And also just a really good man too, so pleasure to catch up with him. Hope you enjoyed that at home. And before we wrap up, I did want to mention that today’s episode was brought to you by Silver Viper Minerals. And Silver Viper did have some news out on Monday as they have completed the acquisition of their LA, Virginia project, making the final payment and now holding a 100% ownership in that project. Obviously the next step is going to be to get out there and get drilling. Obviously waiting on the financing for that. But Steve Cope of Silver Viper actually did put out a video with an update of where that all stands.

And we’ll also have Steve on the show later this week. But to see his update, well, that one’s coming your way right now.
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