Sunday, January 24, 2016

2016.01.22 DJIA Cycle Model Chart

2016.01.22 DJIA Cycle Model Chart

















According to the cycle model, downward pressure on the DJIA will continue until the mid-February 2016 time frame. A previous iteration of the model is shown below and here on the date it was posted.

2015.06.12 DJIA Cycle Model Chart








Saturday, January 16, 2016

2016.01.15 Gold Cycle Model Chart

2016.01.15 Gold Cycle Model Chart


The gold cycle model continues to phase shift forwards, also dragging the timing of the predicted bottom forward. Nevertheless, the model continues to suggest that the $1000 level will likely not be breached during the phase extension, if it continues. The previous iteration of the model is shown below and on the blog here.

2015.112.04 Gold Cycle Model Chart

Monday, January 11, 2016

2016.01.11 XOI.X Cycle Model Chart

2016.01.11 XOI.X Cycle Model Chart


















Over the past couple of years, this has been a reasonably well-performing model. Currently, based on historical cycles, it is suggesting a very strong upward bias in the index. Looking at a run from about a year ago appearing below, posted in February of 2015, one can see that the timing of the minima of the predictive curve has extended forwards by about four months, which is well within the error of the model.



2015.02.06 XOI.X Cycle Model Chart

Saturday, January 9, 2016

2016.01.08 DJIA Cycle Model Chart

2016.01.08 DJIA Cycle Model Chart


















The DJIA cycle model continues to suggest lower prices for the index moving forward in 2016. Note the high Z-score in the previous iteration shown below. The model was first run in June, 2015 as shown below and on the blog.



2015.12.31 DJIA Cycle Model Chart


















2015.06.12 DJIA Cycle Model Chart

Wednesday, January 6, 2016

2016.01.06 VIX Cycle Model Chart

2015.01.06 VIX Cycle Model Chart


















The VIX cycle model continues to suggest an increase in baseline volatility over the next three months. It may have occurred by chance, but it is gratifying to see the DJIA cycle model is also aligned with increasing volatility.  Two previous iterations of the model are shown below and have been posted on the caption date on the blog.  Yes, I'm feeling lazy so I don't want to fuss making the links!


2015.12.18 VIX Cycle Model Chart
















2015.11.13 VIX Cycle Model Chart

Thursday, December 31, 2015

2015.12.31 DJIA Cycle Model Chart

2015.12.31 DJIA Cycle Model Chart

















The DJIA cycle model continues to suggest lower prices through 2016. A previous iteration of the model is shown below and on the blog.

My best wishes to all readers for 2016.


2015.06.12 DJIA Cycle Model Chart

Sunday, December 20, 2015

2015.12.18 Silver Cycle Model Chart


2015.12.18 Silver Cycle Model Chart


















The silver cycle model suggests a bottom of ~1325 in silver price in March, 2016. Recently, the model is capturing the local minima and maxima of the price curve with a lag time of a few months. This should inform our interpretation of the model going forwards. A previous iteration of the model is shown below and previously  here on the blog.



2015.10.09 Silver Cycle Model Chart




Saturday, December 19, 2015

2015.12.18 VIX Cycle Model Chart

2015.12.18 VIX Cycle Model Chart

















The VIX cycle model continues to suggest a rise in the index which accelerates at the beginning of 2016. A previous iteration of the model is shown below and on the blog.



2015.11.13 VIX Cycle Model Chart

Monday, December 14, 2015

2015.12.14 XOI.X Cycle Model Chart

2015.12.14 XOI.X Cycle Model Chart

















The Amex oil index cycle model suggests that the recent decrease in the index price is temporary, and there is very strong upward pressure on prices. It is possible that the index has still to hit the low, but that possibility is low if the model is valid. Last time in mid-August where this much divergence occurred between actual and predicted price, the price reverted back to the predictive curve 'attractor.' A previous iteration of the model is shown on the blog and below.



2015.11.20 XOI.X Cycle Model Chart

Saturday, December 12, 2015

2015.12.11 DJIA Cycle Model Chart

2015.12.11 DJIA Cycle Model Chart

















The DJIA cycle model continues to suggest downward pressure on the index, predicting a DJIA index of 15500 by the end of 2015.  Previous iterations of the model are shown below and on the blog.



2015.10.08 DJIA Cycle Model Chart












2015.06.12 DJIA Cycle Model Chart


Sunday, December 6, 2015

2015.12.04 Gold Cycle Model Chart

2015.12.04 Gold Cycle Model Chart


















The gold cycle model suggests robust pressure for higher prices in the index going forwards. In fact, it suggests we may be at the cusp of a secular rise in gold prices, if the model is correct. The model has plenty of error, and the phase extension over the past few months has been disappointing because we are approaching the point where further divergences will likely not be tolerated by the model structure, and the result will be non-convergence on a model run. The model has reached these high levels of divergence on only four other occasions since 1968.  A friend of mine who has a full time job in the commodity markets tells me that the gold COT figures are quite astounding in terms of the number of speculator short positions at the present time. Historically these extreme positions by speculators always resolve to the upside.  Remembering that all models are wrong but some are useful, a short position in gold at this time would seem to be, on a historical cycle basis, a very very risky trade.  All previous iterations of the model can be found on the blog.

Sunday, November 22, 2015

2015.11.20 XOI.X Cycle Model Chart

2015.11.20 XOI.X Cycle Model Chart

















The XOI.X model continues to indicate higher prices for the index going forwards. It is very possible that the index has made a low in the October time frame.  Previous iterations of the model may be found below and here on the blog.  I apologize to readers if I have not answered your e-mails over the past few weeks; I am currently inundated with work (which is good!) and can barely keep up the blog. This should change when November wraps up.

2015.02.06 XOI.X Cycle Model Chart
















2015.10.01 XOI.X Cycle Model Chart




2015.10.30 XOI.X Cycle Model Chart

Saturday, November 14, 2015

2015.11.13 VIX Cycle Model Chart

2015.11.13 VIX Cycle Model Chart

















A reminder that all models are wrong but some are useful is appropriate at this time. While the model does not capture very short-term fluctuations, it has performed reasonably well in the long term, in spite of a continued bias of the phase shift into the future.  I have put the last two iterations of the model below to illustrate the mutability of the model over time, also shown on the blog here and here. Remembering that the fate of these models is they either adapt within their own "error" tolerance, or they fail to converge, or they converge but the predictive curve continues to overestimate or underestimate the price curve for a prolonged period.  The latter is what happened to the ill-fated DJIA model vs. 1.00!


2015.10.16 VIX Cycle Model Chart

















2015.07.10 VIX Cycle Model Chart

Sunday, November 1, 2015

2015.10.30 XOI.X Cycle Model Chart

2015.10.30 XOI.X Cycle Model Chart


















The XOI.X cycle model strongly suggests the index will be rising, having made a low at the beginning of October, 2015. Below are shown a couple of iterations of the model, the first from a month ago, and the second one from February, 2015.  They also appear on the blog here and here, respectively.


2015.10.01 XOI.X Cycle Model Chart


















2015.02.06 XOI.X Cycle Model Chart

Sunday, October 18, 2015

2015.10.16 VIX Cycle Model Chart

2015.10.16 VIX Cycle Model Chart

















The VIX cycle model suggests a higher VIX 'baseline' going forward, with increasing upward pressure in the mid-November time frame. The model correctly predicted a rise in the index in the Fall, 2015.  A previous run of the model is shown below and here on the blog.



2015.07.10 VIX Cycle Model Chart

Saturday, October 10, 2015

2015.10.09 Silver Cycle Model Chart

2015.10.09 Silver Cycle Model Chart

















As predicted from the last iteration of the silver cycle model shown here and below, we did get a small spike in silver prices though somewhat later than the model prediction, which is within error. What is happening is a continued phase shift so that the local maximum may have already been reached, and it appears lower than in previous model runs.

2015.09.11 Silver Cycle Model Chart

Thursday, October 8, 2015

2015.10.08 DJIA Cycle Model Chart

2015.10.08 DJIA Cycle Model Chart


















The DJIA cycle model continues to converge rapidly, and is now at the point where we might expect the downward trend to resume.  Note there was a previous overshoot on the downside which corrected. Also, a good example of how factors not captured by the model, namely, the Fed getting cold feet on the promised interest rate rise, effect model performance. Look at the curves and guess when the Fed retracted the possibility of an imminent rise in rates.  Below is the first iteration of this model, which also appears on the blog here.



2015.06.12 DJIA Cycle Model Chart

Sunday, October 4, 2015

2015.10.02 Gold Cycle Model Chart

2015.10.02 Gold Cycle Model Chart

















The gold cycle model continues to suggest a rise in price, however, several of the longer term decadal cycles continue to extend within their error parameters. However, the Z-score is also extending into 5 sigma territory, so if a reversal does not occur in the next few weeks, the usefulness of the model can be seriously questioned.  The model provides an example of what happens when cycles extend within their error parameters.  The model run from 2015.05.15 is shown below and here on the blog.


2015.05.12 Gold Cycle Model Chart

Thursday, October 1, 2015

2015.10.01 XOI.X Cycle Model Chart

2015.10.01 XOI.X Cycle Model Chart

















The XOI.X cycle model suggests we are approaching a low for the index. The model suggests the target date of October 9, 2015 as the cycle low. Please remember these are models, and not reality, and that the "true" target low may have already occurred, or could still be a few months away.  Or, "All models are wrong but some are useful." A previous iteration of the model is shown below and here on the blog. This model has been well-behaved in the past, however, that is not a guarantee for the future since sometimes cycles extend, even to the point of blowing up!

XOI.X Cycle Model Chart

Saturday, September 19, 2015

2015.09.18 DJIA Cycle Model Chart

2015.09.18 DJIA Cycle Model Chart

















The DJIA cycle model continues to suggest downward pressure on the index going into the end of 2015. A previous iteration of the model is shown below and on the blog.


2015.06.12 DJIA Cycle Model Chart

Sunday, September 13, 2015

2015.09.11 Silver Cycle Model Chart

2015.09.11 Silver Cycle Model Chart


















The silver cycle model suggests strong upward pressure on prices going into October, given the Z-score > 2. As seen below, the model has undergone a phase shift, and the previous prediction of an October high of ~ 2100 has been pushed to ~1700. The same model output can be seen on the blog here.



2015.08.03 Silver Cycle Model Chart

Friday, September 4, 2015

2015.09.04 DJIA Cycle Model Chart

2015.09.04 DJIA Cycle Model Chart

















I usually don't perform weekly updates on the models, but I thought readers might be curious about the DJIA model. I am! Strong decadal, yearly, seasonal and monthly cycles are all headed lower at this juncture and the DJIA seems, for now, to be following the script. The model predicted a close of 16746.10 and the DJIA closed at 16102.38. The Z-score at the close, which is hard to see above, is 0.579.  Please note that I have updated the time axis. The first published iteration of the model is shown below and here on the blog.


2015.06.12 DJIA Cycle Model Chart