Quick Discussion on Seasonality & Cycles

Eric,

Just have a question relating to Gold and the coming seasonal period. My understanding in following Jim's comments is an indication that the seasonal woes won't affect gold this year as greatly as they have in the past.

I'm surprised by some comments from long-term gold bugs, to expect a serious down reaction as the stock market continues to correct/crash. One’s even saying that if silver gets up to around $19 on a stock market relief rally, bail out.

Jim refers to long-term time points coming up - if gold is to go parabolic, the time should be close as Jim's $1650 prediction must be based on the time factors, and there's only 6 months or so left?

Adrian

Few comments on Adrian's observations.

Seasonality, while important, is far more complex than presented on F-TV. Seasonality, gold, equities, bonds, (i.e. capital market flows), must be framed or studied with the content of other more dominant cycles.

For example, seasonal performance changes or shifts when studied within the 4.3 and 8.6 cycle

Here's a simple illustration of how seasonality, a minor cycle, shifts relative to more dominant factors.

Risk Free Total Returns* 1926-2009:


Year Two
4-Year Cycle Risk Free Total Returns* 1926-2009:


Basic seasonality suggests weakness in May, June, July. Seasonality within the second year of the four year cycle clearly changes. June and July, traditionally weak months in basic seasonality analysis, turn from bearish to bullish.

This is but one example of how seasonality is shifted by more dominant cycles.

Jim "sees" what few are willing to acknowledge that capital flows are beginning to shift to protect against an increasingly unstable monetary system. Jim calls the transition IT, as - This is IT. I call it money, immune and deaf from MOPE and SPIN, moving to protect itself from the inevitable deterioration in confidence.

Approaching cycles dates are June and August. I expect the market(s) will do things few expect right now.

Regards,
Eric