Saturday, July 12, 2014

2014.07.11 XOI.X Cycle Model Chart

2014.07.11 XOI.X Cycle Model Chart




















The XOI.X cycle model strongly suggests a trend change has occurred in the index, and prices are heading into a bottom of about 1000 towards the end of 2015. A previous cycle model is shown below and here.

2014.02.07 XOI.X Cycle Model

Sunday, June 29, 2014

2014.06.27 Gold Cycle Model Chart

2014.06.27 Gold Cycle Model Chart



















The gold cycle model continues to confirm we may have passed a multi-year bottom on the gold price curve. The previous model run from 2014.05.30 is shown below and here. I have also placed the long term gold cycle model chart reaching out to 2020 here.

2014.05.30 Gold Cycle Model Chart

Sunday, June 15, 2014

2014.06.15 XOI.X Cycle Model Chart

2014.06.13 XOI.X Cycle Model Chart


















The Amex Oil Index cycle model is predicting a top in the price curve.  According to the model, the price should drift lower to approximately 1000, bottoming in November, 2015.  The model has performed well in the past, as shown below. Obviously, geopolitical factors may come into play at this time, and these factors are not reflected in the model structure.


2014.02.07 XOI.X Cycle Model Chart




















A pointer to the chart above as it previously appeared in the blog is here.

Sunday, June 1, 2014

2014.05.30 Gold Cycle Model Chart

Gold Cycle Model 2014.05.30



















The gold cycle model suggests the low point for gold is past, and prices should continue to increase over the next year. An iteration of the gold cycle model from 2014.03.20 is presented below and here.


Gold Cycle Model 2014.03.20

Saturday, May 17, 2014

2014.05.16 XOI.X Cycle Model Chart

2014.05.16 XOI.X Cycle Model



















The Amex Oil Index cycle model is performing well, and suggests the index is reaching a top in the June timeframe. A previous iteration of the cycle model can be found here as well as below.


2014.02.28 XOI.X Cycle Model

Saturday, May 10, 2014

2014.05.09 VIX Cycle Model Chart

VIX Cycle Model Chart

















The VIX cycle model suggests a rising VIX over the rest of the year. The busy chart above shows a "Z-score" on the right axis. This is a measure of how far off the model is from reality, looking backwards. If the prediction and actual price were equal, the z-score would be zero. If the predicted price is higher than the actual price, the z-score is positive, and vice versa.  Each of the units on the z-score is one standard deviation, so you can ask the question "Over the history of the time series, what percentage of the time does the predicted price deviate from the actual price in a negative or positive fashion by that amount?" Notice that I have blue bars at the bottom of the chart.  These illustrate time points where the z-score deviated more than two standard deviation units, so that the actual price was lower than the predicted price.  In every single instance, the actual price quickly corrected upwards. Of course the same argument can also be made in reverse. So we shall see.

Saturday, May 3, 2014

2014.05.02 Silver Cycle Model Chart



2014.05.02 Silver Cycle Model


















As you can see in the previously posted charts, the silver cycle model has performed well, and continues to show lower prices over the next 6 months. I have received a lot of mail regarding the obvious question of why the silver and gold models are divergent and yet have a history of good performance for the longer term. Nothing in my "modeler's toolbox" allows me to honestly answer that question. This is what the structural models show, and like all models, they are very crude approximations of reality, or as some may argue, of unreality! Shown below is a previous model from February, 2014, also available on the blog here.

2014.02.14 Silver Cycle Model
















Saturday, April 26, 2014

2014.04.25 Gold Cycle Model Chart

2014.04.25 Gold Cycle Model



















The gold cycle model suggests we may have passed an intermediate low for gold prices. Currently, the model is predicting a gold price of $1750 at the end of 2014. While this has been a good model thus far, I want to enter a caveat - which is that the silver cycle model does not corroborate it going forward, at least by historical gold:silver ratio.  You can find all the previous gold cycle models in the archives, and the last iteration is below.  Note I have changed the time scale and price scale to accommodate forward price action.


2014.03.20 Gold Cycle Model




















Sunday, April 13, 2014

2014.04.11 VIX Cycle Model Chart

2014.04.11 VIX Cycle Model


















The VIX cycle model suggests higher VIX prices are to be expected over the next year. However, astute readers will notice that as shown above, the turning points are better predicted than the magnitude of the change at those points. Right now, according to the model, the VIX is below the predicted curve, and a very short term upward correction, as happened after previous positive and negative spikes, is very likely.  Readers may note I lifted some of the above text from a previous post from January, 2014, shown here. The model has not changed much at all.  Here it is below.

2014.01.24 VIX Cycle Model

Saturday, April 5, 2014

2014.03.31 XOI.X Cycle Model Chart

2014.03.31 XOI.X Cycle Model


















The Amex oil index cycle model continues to perform well, and suggests a top in the index in the June, 2014 time frame. The previous iteration of the model output is shown below and here.


2014.02.28 XOI.X Cycle Model

Saturday, March 29, 2014

2014.03.28 Silver Cycle Model Chart

2014.03.28 Silver Cycle Model Chart



















The silver cycle model is performing well, and continues to suggest lower prices for the rest of the year. I understand that there is a divergence with the gold cycle model which has no explanations outside of pure speculation.  The models are what they are. The previous model prediction is shown below and here.


2014.02.14 Silver Cycle Model Chart




Thursday, March 20, 2014

2014.03.20 Gold Cycle Model Chart

2014.03.20 Gold Cycle Model Chart



















The gold cycle model is suggesting that we should be looking for a gradual rise in gold prices over the rest of 2014.  Inquiring minds will note that this model is at variance with the predicted silver price over the same time frame. The previous iteration of the model is shown below.

2014.02.07 Gold Cycle Model Chart

Saturday, March 15, 2014

2014.03.14 VIX Cycle Model Chart

2014.03.14 VIX Model Cycle Chart



















The VIX cycle model is performing well within its limitations. The model does not capture the magnitude of the price spikes, both high and low, but seems to be working out as far as predicting the turning points within a short-term time window.  The previous model run is shown here and below.

2014.02.21 VIX Cycle Model Chart

Sunday, March 9, 2014

2014.03.07 DJIA Cycle Chart and Z-score

2014.03.07 DJIA Long Term Cycle Chart

















2014.03.07 DJIA Long Term Cycle Chart Z-score



















I developed vs 3.00 of the DJIA cycle model after VS 2.0 failed to converge. Unfortunately, I don't have as much confidence in this model as I do in the other cycle models because even though it passes the predictive testing on historical data, so did the other two DJIA models that failed going forward. Given the model prediction above, it should be apparent by mid-Summer 2014 if the model is on track. Assuming of course it does not "blow-up" before then!  I have included the Z-score for the model, which answers the question: How far out of line is the past prediction compared to historical data? As you can see, already we are at an extreme similar to 2008.75.


Saturday, March 1, 2014

2014.02.28 XOI.X Cycle Model Chart

2014.02.28 XOI.X Cycle Model Chart


















The Amex Oil Index cycle model continues to perform well within a 1 month window, and successfully predicted a rise in the index over the past few weeks. If the model is correct, higher prices will continue until the late summer of 2014.  The previous model is shown below as well as here.


2014.02.07 XOI.X Cycle Model Chart
















Saturday, February 22, 2014

2014.02.21 VIX Cycle Model Chart

2014.02.21 VIX Cycle Model




















The VIX cycle model has been suggesting that the VIX would rise into Spring, 2014 and that seems to be the case. Once again, the model cannot predict the magnitude of the "spikes" but it has performed reasonably well at predicting turning points.  The previous chart of the results of the model run is shown below.


2014.02.07 VIX Cycle Model




Sunday, February 16, 2014

2014.02.14 Silver Cycle Model Chart

2014.02.14 Silver Cycle Model Chart



















The silver cycle model continues to perform adequately, and suggests a peak in price over the next few weeks, followed by a low in the third quarter of 2014. I realize this is at odds with the gold cycle model because it suggests a much higher gold:silver ratio than the historical norm. The previous run of the model is shown below.


2014.01.17 Silver Cycle Model Chart




















For your additional viewing pleasure, here is the longer term silver cycle model chart, which can also be found here.




2014.02.14 Long Term Silver Cycle Model Chart





















Thursday, February 13, 2014

2014.02.13 Gold Cycle Model Chart

2014.02.13 Gold Cycle Chart



















The gold cycle model suggests gold prices are still heading towards a low in the March/April 2014 time frame. If the model continues to perform as it has in the past, the latest spike in prices should fall back down into the low, before resuming what should be a nice rise into the end of the year. Inquiring minds may want to ponder the discordant gold/silver cycle models for prices going forwards. Other than the obvious theory - that one of the models is wrong, I don't have a lot more to say about it. The results of the previous gold cycle model run are shown below.


2014.01.29 Gold Cycle Chart

Sunday, February 9, 2014

2014.02.07 XOI.X Cycle Model Chart

XOI.X Cycle Model 2014.02.07



















The Amex oil index model continues to suggest higher prices peaking mid-Summer 2014.  Currently, the predicted attractor curve is higher than the actual price. If the model performs as it has on a historical basis, it indicates some upward pressure on prices should be seen in the next few weeks.  For comparison purposes, here is the model from the previous run from 2013.12.06.

XOI.X Cycle Model 2013.12.06























Friday, February 7, 2014

2014.02.07 VIX Cycle Model Chart

VIX Cycle Model 2014.02.07


















The VIX cycle model continues to suggest an upward trend in volatility. The results of the previous model run are shown below.

VIX Cycle Model 2014.01.24

Wednesday, January 29, 2014

2014.01.29 Gold Cycle Chart

Gold Cycle Chart 2014.01.29


















The gold cycle model has not changed much over the past month. It still shows gold prices bottoming in the late February/early March time frame.  For comparison purposes, below is the last gold cycle model posted.

Gold Cycle Chart 2013.12.31

Saturday, January 25, 2014

2014.01.24 VIX Cycle Model Chart

2014.01.24 VIX Cycle Model



















The VIX cycle model once again suggests that higher VIX prices are to be expected over the next year. However, astute readers will notice that as shown above, the turning points are better predicted than the magnitude of the change at those points. Right now, according to the model, the VIX is "ahead of itself" and a very short term correction, as happened after previous positive and negative spikes, is very likely.  The previous model output is shown below.

2013.12.13 VIX Cycle Model

2014.01.24 DJIA Weekly close cycle model chart

DJIA Weekly Close Cycle Model 2014.01.24


















As promised, and somewhat late, I constructed a new cycle model for the DJIA based on weekly close data, which eliminates daily fluctuations from the analysis. My reward for the work was a model that has a better overall fit, but it has all of the problems of the previous daily close cycle model - namely that it predicts, based on past seasonal and decadal cycles, a convergence of these cycles to the downside in the 2014 - 2015 timeframe but the current divergence between predicted and actual prices remains.  Taken together, I would interpret the model with liberal amounts of skepticism, doubt and possibly some salt.  For your viewing pleasure, here is the last iteration of the daily close cycle model for the DJIA.


DJIA Daily Close Cycle Model 2013.11.27
















Friday, January 17, 2014

2014.01.17 Silver Cycle Chart

2014.01.17 Silver Cycle Model


















2013.11.15 Silver Cycle Model



















The silver cycle model is performing well, as can be seen by comparing the current model with the previous model output from 2013.11.15. A comparison of the two also shows how much better the timing prediction is in contrast to the price prediction at the turn points when looking forward two months.  In any case, it looks like silver prices may rise to a short-term high in the first quarter of 2014, around March.








Tuesday, December 31, 2013

2013.12.31 Gold Cycle Chart

2013.12.31



















The gold cycle model seems to be working out well, as can be seen from the previous prediction posted on 2013.11.29.  The model seems to be suggesting a major temporal low for the metal within the first quarter of 2014.


2013.11.29