Review Of The Week - Plus A Look At The BGMI

If you’re a believer of the statistical law of reversion to the mean: that what’s gone up must come down, or what’s been held down must one day go up, then what is displayed in the chart above is the promise of BIG gains to be had for the gold and silver miners sometime in the future.

Let’s move on to gold’s step sum chart. This is one very nice chart to look at. The bowl gold formed from 2013 to last summer when it finally broke above $1,360 is an extremely strong base that can support much higher valuations in the months to come. And market sentiment (as measured by gold’s step sum) is positive, and I believe for good reasons.

All that plus seeing the bear box that began last autumn fail is a big positive for the gold market too.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 638\Chart #9   Gold & SS 98-20.gif

Moving on to the step sum chart for the Dow Jones below, everything is in place for further gains in the stock market. Dow Jones at 35,000 before New Year’s 2021? That may be a bit ambitious, but sure why not? The only thing I see that could spoil this party would be the Federal Reserve terminating their program of “injecting” additional “reserves” into the financial system. But you can be sure that there are others lurking somewhere yet unknown out there.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 638\Chart #10   DJ Step Sum 2017_20.gif

Below is gold’s and the Dow Jones’ step sum tables.Both markets saw high single digit 15 counts recently (+7 & +9), which is the market’s way of telling us it is overbought and due for a correction. If you look at the daily closings for the past five trading weeks (twenty-five trading days) both these market did in fact see a mild correction off their highs of late December and early January.

Currently the 15 counts for both markets are in the low positive values, so they are no longer overbought markets.

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