The KE Report, Released on 2/12/24
Michael Oliver, founder of Momentum Structural Analysis, joins us to review how is seeing the technical momentum setup in the US general equities, gold, precious metals stocks via GDX, energy stocks, and agricultural commodities and grains. We start off getting the momentum framework he is viewing the US general equity markets through, and noting the narrowing breadth in the weighted indexes, compared to the overall broad markets not being as strong. He outlined that a few sectors like healthcare and industrials did finally get moving back to new highs, but that this market pattern overall is very similar to the periods of time in 2000, before the Dot Com bubble popped, and 2007 right before the Great Financial Crisis. In both cases, momentum analysis warned of a bear market, even while market indexes made new highs, and then the larger correction down began in earnest. With regards to gold, Michael postulates that when the US general equities do roll over and begin a bear market, that a portion of investors will turn to gold and the gold stocks. He points out that currently gold has been holding up above $2000 and that it is already picking up on the degradation of the value of the money unit, but that there is still a big disconnect and undervaluation seen in the gold stocks. He expects that the gold stocks can start moving soon, along side gold, and lays out some technical levels to watch for in GDX. While Michael continues to see strength in the overall commodities sector relative other asset classes, he expects the monetary metals of gold and silver, and the grains, to have more upside relative to other areas, including the energy sector.
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 own 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 research. His website is Olivermsa.com. He is also the author of The New Libertarianism: Anarcho-Capitalism.