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Gold And Us Stock Mid Term Election And Decade Cycles

Chris Vermeulen

GOLD MIDTERM YEARS AND SEASONALITY

Let’s start off with the price of gold and what it typically does each month during the presidential midterm year, which is this year 2019. The graph below shows the average price movement during the midterm election since 1971 and I think the chart speaks for its self.

What I get from this, is that investors become uncertain with the future and accumulate gold.

This next chart is the seasonality of gold. Meaning which direction gold trades during each month on average every year. This second chart along with the midterm chart above both show gold tends to pull back the second half of July, so don’t be alarmed if it happens.

DOW JONES MIDTERM YEARS

The US stock market in general, but in this case, I’m using the Dow Jones industrial average you can see where stock prices should move during the rest of this year as we go into the November election.

DOW JONES DECADE CYCLE

As you may or may not know, I have a thing with cycles when it comes to trading. Yes, it seems a little far fetched and can be perceived as Voodoo to some people but statistics don’t lie and I have made an incredible living from the financial markets incorporating cycles in all my trades from long term investing right down to my 30-minute trading charts.

The website SeasonalCharts.com shares this really interesting information and chart about the decade cycle and I want to share it with you here:

“The stock market appears to follow a 10-year cycle. During the first half of the decade, equity prices on average do not increase, however in the second half they clearly do. In addition, U.S. equities have demonstrated very good performance in years ending with the number 5 (e.g. 1995 or 2005). Their average profit amounted to 30 %. That equals 40% of the average profit for the entire decade! 

The decade-cycle chart of the Dow Jones shows the average 10-year trend of the index over the last more than 100 years.” 

As you can see from those four graphs the odds are pointing towards a market top in the US stock market based on statistics and long-term cycles. And for gold to become the investment of choice and rally the second half of this year.

Below are several other eye-opening charts about gold and US equities. You should take a quick look at each because what I’m sharing in this post and links below is more than enough to know where the markets are headed next. No need to look anywhere else and I think you will agree after you review each section. My analysis is logical, proven, and easy to understand the big picture trends no matter if you are a total newbie to the trading and the financial markets.

CONCLUDING THOUGHTS:

In short, you should now have a firm grasp of where stocks are headed along with precious metals for the next few months and beyond. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

In short, the bear market has been a long time coming, but finally, almost all the signs are showing that it’s about to start. As a technical analyst since 1997 having lost a fortune and made fortunes from bull and bear markets I have a good understanding of how to best attack the market during its various stages.

Chris Vermeulen
Technical Traders Ltd.

This article was originally posted on FX Empire

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