Seasonal charts look at what the average price for an investment does during a specific time of the year. The gold and oil seasonal charts below show we are entering a time when the prices of gold and oil tend to drift higher.
While these charts indicate the overall movement, they are not great at helping an investor with specific timing and should always be coupled with the daily and weekly underlying commodity charts.
Here's a look at what the godfather of technical/market analysis shows in terms of market cycles and where I believe we are trading. As I mentioned last week, a picture says a thousand words.
John Murphy's Business Cycle:
Mature Stock Market:
Commodity Index Looks Bullish and Should Rise:
Gold & Silver Seasonality, Price Charts With Analysis:
Precious metals like gold and silver are nearing a bounce and possible major rally in the second half of this year.
Crude Oil Seasonality, Price Chart with Analysis:
Crude oil has been a tough one to trade in the last year. The recent 15 candles have formed a bullish pattern, and with the next few months on the seasonal chart favoring higher prices, it has been leaning toward the bullish side.
Commodity, Gold & Oil Cycle and Seasonality
In short, I believe the equities market is nearing a significant top in the next couple weeks. If that is the case, money will start to flow into commodities in general as a safe-haven play. This view factors in a falling U.S. dollar.
Based on the weekly dollar index chart, it looks as though a sharp drop in value is beginning. That will lift the price of commodities, especially gold and silver.
Once a full-blown bear market is in place, stocks and commodities, including gold and silver, will fall together. Precious metals will climb, but it may not be as much as you think before selling takes control again.
Finally, this could be VERY bullish for the Canadian Stock Market (Toronto Stock Exchange) as it is a commodity-rich index. While the U.S. may pull back or crash, Canadian stocks should hold up better.
At the time of publication the author held no positions in any of the stocks mentioned.
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This article was written by an independent contributor, separate from TheStreet's regular news coverage.