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Michael Oliver: Pricking the Largest Financial Bubble in History

Tom welcomes Michael Oliver back from Momentum Structural Analysis. So many people assume gold isn’t doing well, but gold is normally poorly correlated with commodities. Gold tends to have much longer bull markets. Commodities tend to chase gold. Major asset managers around the world are telling investors to focus on the value of money because central banks are creating inflation. Gold is reflecting the decline in the value of dollars, it’s a good hedge against monetary degradation.

Micheal is convinced that we are in a counter trend rally within a bear market. The trend down will resume. Gold is not breaking down, instead, it’s in a quiet accumulation phase. The largest stock market bubble in U.S. history is breaking

Most bear markets with U.S. equities are gradual and don’t suddenly drop. The 1987 crash and crash of March 2020 didn’t lead to a bear market, but quickly rallied higher. It can take a couple of years for a bear market to play out and reach a bottom. Gold outperformed equities from 2008 to 2011. Gold is looking quite favorable.

Michael explains the importance of momentum, as it is more useful than just evaluating price structure.

He breaks down his thoughts on silver and how it compares with gold. A ceiling has formed on the momentum chart and should we punch through that then we may begin to outperform gold. Silver may lead gold to the upside.

The assumptions today about dollar strength may be misguided. He notes that a breakdown in the dollar could catch many investors surprised.

Michael believes the idea of a global reserve currency is rapidly on its way out. It will be replaced by several currencies, and probably some of will become gold backed.

He doesn’t believe the risk reward ratio with crude or natural gas is good at the moment. We’ve had a good run with both, but we need to see momentum hold support for a while. Natural gas has been a leader, but it may not be the place to be at the moment. Having exposure to European markets may be a different scenario.

Time Stamp References:
0:00 – Introduction
0:43 – Commodities & Gold
13:57 – Timeframes & Analysis
16:07 – Gold During Panics
28:44 – Momentum Vs. Price
34:22 – Silver Outlook
43:55 – Dollar Trends
52:14 – Crude & Natural Gas
1:02:39 – Wrap Up

Talking Points From This Episode

  • Why gold does not correlate well with the other commodities.
  • The current counter trend rally and why the bear market will resume.
  • Importance of momentum indicators over just price.
  • Outlook for silver, energy, the dollar and the future of currencies.

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J. Michael Oliver entered the financial services industry in 1975 on the Futures side, joining E.F. Hutton’s International Commodity Division, headquartered in New York City’s Battery Park. He studied under David Johnston, head of Hutton’s Commodity Division and Chairman of the COMEX.

In the 1980s, Mike began to develop his proprietary momentum-based method of technical analysis. He learned early on that orthodox price chart technical analysis left many unanswered questions and too often deceived those who trusted in price chart breakouts, support/resistance, and so forth.

In 1987 Mike technically anticipated and caught the Crash. It was then that he decided to develop his structural momentum tools into a full analytic methodology.

In 1992, the Financial VP and head of Wachovia Bank’s Trust Department asked Mike to provide soft dollar research to Wachovia. Within a year, Mike shifted from brokerage to full-time technical analysis. He is also the author of The New Libertarianism: Anarcho-Capitalism.

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