4 Charts: Sell Stock – Buy Gold

The next 4 charts are clear as crystal water. Swiss bank UBS put out a research note: sell stocks and buy gold. This will be the best trend for the years ahead.

It’s written in the stars, the only thing you have to do is look: Stocks are out – gold is in, that’s what UBS is saying.

Sign 1: The 7-year equity cycle

UBS Technical Analysts Michael Riesner and Marc Müller warn the seven-year cycle in equities is rolling over. We are at the end of the bull market and not at the beginning of a new leg up. And remember, since 1937 the average downside in a 7-year cycle decline was 34%…

 

Sign 2: Global equity is already in a bear market

This is the 4^th longest and 5^th strongest bull market since 1900. The MSCI World topped last May, 20 out of 48 markets saw a correction of 20% and more, which is per definition bear market territory. 200-day moving averages are rolling over in more and more markets globally indicating a down trend.

The only market that’s holding up is the American stock market.

Sign 3: This is not a normal Presidential cycle

There is a big divergence between a normal Presidential Election year and the 8th year of a presidential turn. Since 1920, more or less all 8th years of a presidential turn were amongst the worst election years.

Solution: BUY Gold

UBS believes gold and gold mines to move into an eight-year cycle bottom as the basis for the next multi-year bull market. They see gold profiting as a safe haven and as of 2017, gold could profit from the US dollar moving in a major top and starting a bear market.

A potential bottom in 2016 could be a rather powerful bottom, since together with a four-year cycle low we have also an eight-year cycle low projection for this year. In this context we expect a potential 2016 low in gold to be the basis of a new multi-year bull market.