Michael Oliver: When Will the Miners Outperform Gold?
Tom welcomes Michael Oliver back from Momentum Structural Analysis, explaining how they use momentum trends to look at the long-term picture of market sectors. Momentum can show something breaking before the price trend appears.
He believes the Nasdaq is in a counter-trend rally which could work for a few months, but much of its performance is limited to a few over-weighted stocks. It wouldn’t take much to initiate a new decline.
Michael discusses a point and figure chart designed to take out erratic price action with gold. He expects there to be a point where moves in gold and silver are so dynamic that big swings won’t matter.
He then talks about the dollar and their past predictions based on momentum. In recent months the dollar has been moving sideways for several months and he expects a mini collapse when it reaches the 101 level. He argues that the world doesn’t need a “global reserve currency” in this modern age with communications and near instant computer systems.
Michael believes commodities, including oil and agriculture, are now largely undervalued again. He notes that energy may be lagging in the coming commodity move and uranium has been in a pause and hasn’t experienced a pullback, which may be indicative of the world in a new transition to that energy source. He adds that miners are often weak before the real breakout and, once reality sets in, they snap to the upside and outperform gold in relative performance.
Finally, Michael warns of the uncertainty with the coming elections, which doesn’t appear to be priced into today’s markets. He outlines a scenario that could play out if Trump were to start his own political party, noting that something is going to change fundamentally this election cycle in the United States.
Time Stamp References:
0:00 – Introduction
0:38 – Market Breathing
4:33 – Nasdaq Health
8:03 – Gold PF Chart
12:38 – Gold & Moving Averages
16:45 – Trends & Silver
19:10 – Dollar Performance
28:00 – Oil & Petrodollar
33:02 – Uranium Outlook
34:37 – Flash Crashes
40:42 – Miners Vs. Metals
45:23 – Election Uncertainty
50:52 – Wrap Up
Talking Points From This Episode
- MSA looks at long-term market trends and can show something breaking before the price trend appears.
- Commodities, including oil and agriculture, are now largely undervalued again.
- Uncertainty with the coming elections is not priced into today’s markets.
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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.