Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Chris Vermeulen

This second part of our research post on super-cycles and precious metals will present our expectations going forward for 6 to 24+ months.  In Part I of this research post, I linked a number of our previous research articles we recommended to readers to review for context and continuity. If you have not read Part I of this research article, please take a minute to review that first segment before you continue reading this second segment of our research.


There is a technical cycle that is taking place as stocks and Gold appreciate.  In the first phase, there is a basing process in both the stock market and Gold (sometimes not happening at the same time).  From this basing level, the stock market begins to rally and Gold begins to appreciate as well.

Know where Silver is headed? Take advantage now with 

75% of retail CFD investors lose money

In the second phase, the stock market rallies to a peak which prompts some degree of selling.  This selling spills over into Gold and Silver; panic selling usually spills over to Gold and Silver immediately, putting price pressure on these precious metals.  In other words, when broad market selling takes place, Gold and Silver are not immune from this panic type of downside price event and suffer accordingly. However, they react differently weeks and months after this type of price correction.

In the final phase, which usually takes place after a deep correction in the US stock market and after some new low price base has set up, the real appreciation for precious metals typically happens in a parabolic price trend.  This is when risks are still perceived to be moderately high throughout the globe, yet the stock market continues to attempt to base/drive higher while Gold and Silver begin a real sharp upside price trend.

Pay attention to how the BASE LEVELS on the following Smart Cash Index to Gold Monthly chart are followed by periods of price appreciation in both the stock market and Gold.  Notice how Gold has rallied in nearly equal (100% Measured Moves) since 2002 – first rallying nearly $750 (2008), then rallying nearly $950 (2011), and recently rallying nearly $950 (2020).   This suggests any continuation of the 100% Measured Move structure would place a new target for Gold near $2,900~3,000.  We believe a new parabolic price trend is setting up after the deep double-bottom BASE LEVEL between 2016~2020.

If our research is correct, the Super-Cycles and the deep rotation BASE LEVELS will likely set up a new base level near $1,800 to $1,950 in Gold and near $145 to $175 on our Smart Cash Index chart (see the chart further below).  We believe this new base level will act as a launchpad for the new parabolic price trend in Gold and Silver throughout 2022~2023 – possibly longer.

Looking deeper, if you take a technical glance at the Custom Smart Cash Index chart below and consider how gold has advanced over the past 20 years, you’ll see the nearly 100% Measured Moves taking place (which have resulted in a 300%, 200%, 100% series of advances).  Yet, what you have also seen is a moderate market peak in 2000 followed by an extensive upside price rally peaking in 2007.  From that peak in 2007, we see a deep price decline and a series of sideways price trends leading up to the 2015~2016 US Presidential Election event.

After that, we see a strong upside price rally that peaked in early 2018 (which we are calling the Ultimate Top in the US stock market).  This setup has a very telling pattern in price – not quite a Double-Top but rather a failed “Scouting Party” pattern where price attempted to rally above the previous 2007 peak and failed.

Currently, we believe the FUTURE BASE will set up near the current Head-and-Shoulders pattern on the Smart Cash Index or just above the previous BASE LEVEL.  There is a risk of a deeper downside price move in the Smart Cash Index which may set up a deeper price base, but we have no indication at this time that any immediate, deeper downside price move is about to unload on the global markets.  We believe the next 4+ years will be very similar to the 2009~2011 setup – where the US stock market attempt so establish moderate sideways/upside price base and where Gold settles above $1,800 and starts another measure move or transitions into a parabolic upside move higher.

The question our researchers continue to ask is “will the FUTURE BASE confirm and will Gold stay above $1800 to setup the new launch pad for the parabolic upside price trend?”.  We’ve clearly entered a different phase of the market – likely nearing the end of the “Excess Phase”.  Obviously, a deep downside price move in the US stock market is not something we want to see happen because it could create far more critical events in the future.  Yet, we believe the current BASE LEVEL and the FUTURE BASE level are ideal support zones for the US stock market and the new launch pad for precious metals.

If our research is correct, by November, December or January, we should clearly know where the new BASE LEVEL has formed and if any deeper downside risks present any greater concerns.  The longer-term, our Super Cycles analysis suggests we are in for a wild ride – you certainly don’t want to miss this big move in metals.

This market, the future setups described above, and the profits lying therein are fantastic opportunities for skilled technical traders to capitalize on.  Isn’t it time you learned how I can help you find and execute better trades?  My incredible technical analysis team and our proprietary tools have just shown you what to expect 6+ months into the future.  Do you want to learn how to profit from these huge moves?  Sign up for my Active ETF Swing Trade Signals today! If you have a buy-and-hold account and are looking for long-term technical signals for when to buy and sell equities, bonds, or cash, be sure to subscribe to my Passive Long-Term ETF Investing Signals.

For a look at all of today’s economic events, check out our economic calendar.

Stay healthy and rest easy at night by staying informed of market trends with The Technical Traders!

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.


Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.