Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What The 1987 Crash Reveals About Silver Today

Commodities / Gold & Silver 2020 Aug 27, 2020 - 10:57 AM GMT

By: Hubert_Moolman

Commodities

The 1987 stock market crash occurred after a period with a similar build up to the 2020 crash. After being stuck in a range for a number of years in the 1970s and the 2000s, the Dow managed to break higher after a significant gold peak in 1980 as well as 2011 respectively. See the chart below:


In both cases, prices more than doubled over a period of at least 90 months from the level it was at the gold peak. Point 1 on the chart (for 1987 and 2020) marks the top of the rallies.

When the Dow reached the top (point 1) in August 1987, silver was already in decline. It was in it’s third wave down since its peak in 1980. That third wave down started at the peak after point C (from where it touched the red line).

In a similar manner, silver was already in decline when the Dow reached its peak in February 2020. Silver’s third wave down started at the peak after point C (from where it touched the red line).

It took silver almost a decade to surpass the high at the red line, after touching it in 1987. However, in the current pattern, it has already cleared the high at the red line (only months after touching it). This is a massive divergence.

It is a signal that silver will likely continue much higher in a multi-year bull market as suppose to a multi-year bear market (which was the case in the 80s and 90s). This is especially true since it has also cleared the high at the blue line as well.

Together with the recent new all-time high for gold, it is also a signal that you will have to wait long for  a new bull market for the Dow. This is how gold and silver make up for the under performance, relative to the Dow, that is created as a result of central bank credit extension (as previously discussed).

After all, not all assets are equally affected during massive credit extension, in a debt-based monetary system. While the stock market had its time to shine over the last decade, it is now time for silver to outperform.

The roles are now reversed. It is now silver that is in a similar space to where the Dow was in 1987. The Dow went from around 2700 at the peak in 1987 (point 1) to a top of more than 29000 in 2020. Silver will do even better.

Here is one way of looking at it (note that the breakout is already successful):

For more on this, and similar analysis you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.

Warm regards,

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2020 Copyright Hubert Moolman - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in