2015.02.24 XOI.X Cycle Model Chart

2015.02.24 XOI.X Cycle Model Chart

The XOI.X index is a bit ahead of itself but on track for a rise into April. There are no changes to the long term model.  A previous iteration of the model is shown here on the blog and below.

2014.10.17 XOI.X Cycle Model Chart

2015.02.23 Silver Cycle Model Chart

2015.02.23 Silver Cycle Model Chart

The cycle model for silver suggests upward pressure in silver prices over the next few weeks. To help interpret the Z-score, I have placed a long term model going back to 1968 in the Long Term Cycle Charts page.

2015.02.20 Gold Cycle Model Chart

2015.02.20 Gold Cycle Model Chart

The gold model Z-score increased to 2.4 from the previous iteration. This suggests increasing pressure for a reversal to the mean, in this case a rise towards the $1300 level. A reader asked how to interpret the Z-score, and in answer I have also posted a long term model ranging from 1968 to 2016.

If you click on the chart to get the higher resolution graphic, you will see that on a historical basis the Z-score has been >3 about a dozen times, out of 11909 data points in the time series.   This is why in my last gold cycle model chart update I mentioned that it was unlikely that the model would breach a Z-score of 3. For convenience, I will also add the model to the long term chart section.   However, it also becomes more likely that the model might fail to converge unexpectedly and annoyingly. According to the cycle model, we seem to be at a major turning point for gold, so we are in the "make or break" time for the model.  Hence, I will try to keep weekly updates current.

2015.02.13 Gold Cycle Model Chart

Once again, gold prices are lagging the predictive curve, this time by two sigma units. This suggests that pressure for a reversal is building based on historical price cycles.  This is similar to what we observed at the end of October last year as you can see below and on the blog. Hopefully this is also helpful to readers learning to interpret predicted vs actual divergences by means of the Z-score. One other observation to take into account: at this point in time the predictive curve is rising, if the gold price were to drop below $1200 in the next few days, the Z-score would rapidly rise to greater than 3, an unlikely event by the model parameters, suggesting that $1200 +/- is a base price for gold at this time.

2015.01.16 Gold Cycle Model

2014.10.31 Gold Cycle Model

2015.02.06 XOI.X Cycle Model Chart

2015.02.06 XOI.X Cycle Model Chart

This cycle model suggests that index prices have gotten a bit ahead of themselves, with the Z-score close to 2 sigma units suggesting a reversal. According to the model,  reversal is highly probable in the next few weeks. This cycle model suggests a maximum in the index occurring in April 2015. This is likely due to strong seasonal cycle components.