Friday, February 13, 2015

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

Sunday, February 8, 2015

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.