Michael Oliver Latest on Gold, Silver, Oil and S&P | Recorded Evening May 15
Summary
Equities Breadth: The S&P’s advance is narrowly driven by semiconductors/AI leadership, suggesting a potential topping process and blowoff characteristics in the sector.
Semiconductor Bubble: The guest sees vertical, blowoff-style action in semis and warns that a failed breakout could trigger downside in the broader indices.
Bond Crisis: Long-term yields are breaking higher with 30-year weakness signaling a government bond crisis; the Fed may be forced to print, creating cross-asset shockwaves.
Gold: Bullish view with consolidation before a major leg higher; historical analogs support potential targets around prior 8x cycles, with some banks citing near $9,200.
Silver: Strongly bullish with potential parabolic move; thesis targets $300–$500 by late summer as silver leadership strengthens versus gold.
Commodities: Broad commodity uptrend highlighted by the Bloomberg Commodity Index breakout; base metals, grains, and cotton are positioned to benefit from money flow shifts.
Crude Oil: Structural bull trend; prefers buying a pullback into the $80s after headline-driven spikes, expecting multi-year upside thereafter.
Bitcoin: Countertrend rally seen as vulnerable; a break below ~60k could question crypto’s longer-term viability amid broader risk-off.
Transcript
Michael, thank you very much for joining us today. The last time you and I spoke was February the 10th, more than three months ago. Can you believe it's been that long? >> Yep. It's uh been exciting time, but actually net boring for the medals because if you go back to February 10th Okay. Anyway, go ahead. >> Well, at that time, >> at that time the S&P was at 6,800. Now it's at 7,400 or 7,500. It's up 8% on the year. It bottomed at 6,300 at the end of March and then on April the 1st it's like everything just changed like that and it's like this massive bid came into the marketplace and here we are it's at 74 to7500 now and the sector that really has been driving this whole market are the semiconductors. The SMH has ripped from $350 up to 560. >> It's up 50% on the year. Intel a name that we thought was all but dead. up 200% on the year now and most of that move just came since the 1st of April and then SanDisk I got to highlight this one also it's up 500% on the year but why don't we just start right here when you look at the S&P >> what is your assessment of the S&P as it stands right now it's like making new highs every other day and then on a follow-up question I guess are you concerned about what you're seeing right now in these semiconductor stocks >> yeah well okay in the broad stock market I think it's topping. I thought it was topping since early last year. Now it's gone up since then. Fine, because we thought it was topping in January of 2000.com top and it didn't peak until August at about 15% higher than it was in January 2000. Same in 2007. You have a process where you get this distribution. You can sort of see it in the market where there's selling and there's like a ceiling and then they punch through it usually like, "Oh boy, we're going up forever." Okay. And in this case, what they did is they skewered the people who sold the war news. They should have been skewered. You never make a market top on some dark piece of news. You always make a market top and everything is happy. So hopefully the China stuff comes out mellow. You know, okay, Iran mellows suddenly it isn't an issue and everything's happy again. And what we see in those very few sectors that have made new highs, punch, everybody should go just punch up an S&P 500, let's say a monthly chart, and then punch up all the major sector ETFs like financials, banks, industrials, consumer discretionary XLY, consumer staples, XLP, uh healthcare, XLV. punch up those monthly charts and then look at the S&P chart and say, "Hm, what caused that?" It's simply the Nvidia, AI, and semiconductors. The other sectors aren't making new highs. They didn't make a new highs. Some of them making far lower highs than they did six or even last year in some cases. And they're closer to the recent lows like the S&P being back down around 6,500. They look more like that. So, there's some even obvious price evidence that something's wrong here. You're down to literally a couple liters. And uh when I look at the semis and I don't look at them all that closely all the time but lately when they went vertical there was a clear price chart type pattern which we don't usually pay too much attention to but it looks like a blowoff top where you have this huge surge then you had like three months of of violent consolidation where you they held their gains like looking at the socks index for example and then you burst out of it and have an equal surge that you had in the first half. That's like, you know, that's a typical swing move, but it's also blowoff looking. So, in other words, even though it's super strong, it looks like the kind of verticality you get at the tail end of an overdone sector or market. We shall see. But I'm pending very negative on the stock market. I think that the evidence of that will be subtle and like if you just look at the S&P NASDAQ has the same attributes NASDAQ 100 if you you had a range where you there was repeated selling at 6,900 to 7,000 for like six months in a row like a haircut and then you had that little brief drip drop on that news that I ran thing. So they sold, they took out those lows and a little bit away at the 6,300 and immediately jerk back up into that range and blew out the high of that that range. Well, we call that range a distribution zone where somebody's saying, "Hey, I'm out. I'm out. I'm out. I'm out." And therefore, it capped the market. And then you broke out. Now, if that breakout doesn't sustain, and we don't think it will, and you slip back down into that price zone, like get below 7,6,900, that kind of thing. So, you know what? We're 74 something right now. So, it's not a big drop. You get back down under there, that's called we we call an abort. That's the old Cape Canaveral rocket launch. It went up and then oops, coming back down to the pad. Okay. Uh, so I'd be watching that if I were just looking at price charts. But we have momentum reasons to assume that's likely to happen. And when it does happen, there's potential disaster not far below getting back into that range. In which case, then suddenly the stock market will be paying attention to what? The government bond market. The the nuclear event that's already unfolding. >> Well, just because you brought up the bond market, why don't we go there? Because We've seen uh the bonds coming under pressure. The the yield on the 10-year it's at 450 give or take. The 30-year it's well over 5% now. I believe it's around 510. So why don't we stock talk about the bond market? What are your views? Why are you so concerned? And what is it telling us? >> Well, Jamie Diamond fundamentally speaking in in Norway at a conference a week and a half ago said, "We got a bond bond crisis, government bond crisis coming. We're going to have to deal with it." Okay? He wasn't saying, "Well, 10 years down the road, we're going to push it down 10 more years again." You know, this 10 years, 10 years, it keeps getting worse and worse, and now finally to a crisis point. Well, that we know the Japanese are in one. And their solution was what we would expect. The prime minister, who's a conservative Japanese politician, said, "We're going to print print." Well, they are. Uh, and now suddenly the US is in the same technical position. our government, we look at 30-year bond futures. That's the end of the market that the Fed can't manipulate. Okay? It's bigger than they are. Uh they can affect the 90-day T bill and all that stuff, but the their fluctuations and rates don't affect that in that market crashed between 2020 and 2022. The bond prices, yields went up. So, bond futures crashed back then to about 117 after having been over 190. So that's a big percent drop. Over a span of about a year and a half, they dropped. And since 2022, late October 2022, you could draw a line sideways through the price chart or through the yield chart at the upper level, and you can't seem to get out of that ink. Price keeps trying to get a rally going, a basing pattern out of what might be a base. They've had three major rally attempts. Three is usually all you get. That ended about two months ago by our metrics and we said, "Uhoh, this guy's going to melt through the lows. Now he's starting to melt through the lows, yields through the highs." And again, the Fed is in control of this. The only thing they can do is bring out fire hoses. And it's not one of their mandates. You know, it's not it's not fighting inflation because they claim, "Oh, we we got to fight inflation by raising rates." Yeah, right. Give me a break. and they get they worry about the unemployment which is not a problem and they're not worried about it therefore because unemployment is stable unemployment number which it always is prior to a bare market anyway other words unemployment never tells you that you're about to enter a stock bare market it only tells you later oh that's why so the Fed doesn't have a mandate and yet they got a bond crisis so last November I probably mentioned this on your prior shows head of the New York Fed said we're going to start buying bonds. Okay. Well, if they did, it hasn't worked. The only thing it's done is slow the decline. But right now, T- bonds are now at a point where even obvious price chart watchers or yield watchers are saying, "Uhoh, something's happening here." And you can see it reflected in the financial sector. Some key banks, too many key banks, credit card companies, they're even reflecting. So, it's not just government debt, it's private debt. This is far bigger than the mortgage event of 2007 through9. This is government debt. This is a market bigger than the entire stock markets of the world. Okay? Japanese government bonds, yard bonds, UK bonds, you name it. If this commences, and we we argue it's technically now commenced, a rise in long-term yields, crackdown in price. Two things will happen. One, it'll have wave effects. Two, it'll cause the Fed to have to do a take action like get out some huge fire hoses, whatever policy they want to call it or do and it will have impact on other markets and but it will it it'll come to the four. It's always been here but everybody's ignored it. So all they talk about are earnings and AI and semis and nobody's talking about the the government debt debt market. It's the end of the world type market. And I think gold knows this. I think the monetary metals know what's going on. And that's why they've been going up for a decade knowing it's coming. And now I think they're about to go into a parabolic mode. >> Okay. And when you look at the bonds, okay, I want to stick with the 30-year. Okay. It's currently at the yield is at 510. Where do you see that yield going? And this move that we're seeing in the bonds, is this all due to expectations? We don't have any technical argument for where it might go except to say we know it's gone too far and we know that any further will cause total public and ma and institutional investor doubt about the stability the the place to be. You know, T- bonds used to be a place to be as an alternative, a safe place. And you know, the CIO of Morgan Stanley several months ago said, "No, 6040 rule out the window. It's 60 2020 20% gold now." Uh, he knew what was coming. Jamie Diamond knew what was coming. The issue was the timing. And we argued that two months ago the warning signal came up technically that duh, we're not going to hold. And sure enough, now they're slipping down and we're at the multi-year lows on the bond prices. You go any further and they'll start, you know, what's going on here. And it's not an issue where is it going, it's just a sense of what's going on. And when the public has that sense in institutions and foreign governments and you know, it's like dump it. Okay? You can't have that. And there's only one alternative. The government can't do anything about it. They, you know, unlike you or me, we can go bankrupt. They can't go bankrupt. only thing big do is print like the Japanese are doing like we'll have to do and well there'll be consequences what will be the consequences uh and that's that's the investment issue right now >> so the latest CPI number we saw for the month of April was 3.8% 8% up from 3.3 the previous month. A lot of this has to do with the move in oil. And uh by the way, in the city of Toronto, I'm paying about $5 US. U per gallon. What are you paying in Denver? >> Four and a half for the upper grade gasoline. It it it's that's not a causal factor. It's a it's a mere wave consequence of the monetary explosion. It's always ongoing. And we could talk about the commodity complex. I think that's a major issue right now. >> All right. So, why don't we talk about gold? You said you um >> so gold is >> I guess you could define it as in a period of consolidation right now. It's up around four or 5% on the year, but we've been back and forth a lot of chopping choppiness. >> But I think a lot of the underperformance in gold, in my opinion, has to do with the fact that you got these bonds or the yields on the bonds moving up. And at the same time that's bringing the US dollar higher. What are your thoughts? No. Okay. >> An analysis. >> Uh the dollar relation to the gold is very pathetic. Dollar index we're talking about now. That's merely the dollar measured versus several other fiat currencies. So it's a competition of which piece of paper is more worthless than the other. Okay. And the varying issue. Okay. So versus the euro and the yen which constitutes 70% of the dollar index. The dollar index is very weak. In fact, right now, yeah, you're at 98.99, but you've been you collapsed. We got bearish a year ago in March at 10450. It dropped down to 97890. It's been doing this for like 3/4 of a year, mostly below 100. Doesn't matter. Momentum, long-term momentum is fully broken with trend structures going back a decade and a half. So, momentum says, "You're gone." Price is the one that's trying to hang in there. And every time there's an uptick, people say, "Oh, the dollar's strong." If you go back to 2015 when gold made its low in December at 1,50, where was the dollar index then? It's where it is right now. So, if you didn't buy gold at 1,50 and it's now four-fold and your excuse was the dollar, then you missed a four-fold move in gold because the dollar index had nothing to do with the trend in gold. It's merely its competition to other degrading currencies. Okay? I think the dollar is likely to have another wave down of huge proportions like get down to 70 and so forth. But that's really not a prime mover for gold. The degradation in the dollar and the yen and the euro and the pound by constant monetary expansion is an ongoing motor underlying money silver and gold and that's likely to increase because of this government debt crisis. So the government debt crisis regardless of the better yields is indicating instability, uncertainty in that asset category, which means if you're smart, you don't put your money in there to get the yield. Uh you know, something's wrong here. You got you got a borrower that can't pay, so he's going to print it. Okay? Uh CPI is merely a reflection of inflation. It is not inflation. It's the increase in the money supply ongoing. That's inflation. And it shows itself in stock prices, commodity prices. And when your granddad built a house, it was $4,500. Your father, it was $45,000. If you want a median home today, it's $450,000. That's called inflation. It's reflected in everything, including the stock prices, including gold prices. Some will underperform that. Commodities vastly underperformed the rate of degradation in the money unit. The S&P has reflected it. If you go back to 2000 to the present and look at M2, how much it's grown percent S&P has grown the same percent. So all the S&P has really done is go hoham for a quarter century in terms of real buying power. You've not made money. You've made nominal money, but it's because of a degrading money unit. So gold has vastly outperformed it and silver is about now to leave the page on that issue. Okay. So right now it looks like that flipping of asset preferences which investors control the Fed doesn't control it is going to shift from stocks into the cheaper stuff and oil is one of them. Even after the recent surge it's still cheap. Uh and commodities is as a category. So anyway that's that's my assessment of that. Um it's inflation is not not that okay. >> Okay. And when you say you're bullish on gold, so right now it's trading around call it 4600. Where do you see it going? >> Well, you know, even JP Morgan a couple months ago said 9,200. Okay. And all the banks that come out with reports and they're bullish on it, they always every like every month or two they'll up it by a thousand. You know, they're they're Okay. Gold twice in its history since it was legalized in 75 has had two bull markets. Each of them was eightfold move from bare low bull high. Our bare low is 1,50. You do the math. Says something like 8,500 would merely match the dimension of the bull market that peaked in 2011 or the one that peaked in 1980 in terms of multiple gain from bare low to bull high. So that would merely be hoham. I did it a third time. Well, so JP Morgan's assessment, I didn't even read it, but I saw the conclusive number. It's probably fundamentally based, was 9,200, which happens to be in that ballpark. I don't think gold will stop there. I think the crisis we're facing will take gold to some level that I can't predict. I don't have a target except to say a lot higher. The one I'm most focused on is silver because I think silver could go absolutely parabolic. And the crisis you're talking about is you're talking about the federal debt $40 trillion worth and at some point this is is going to catch up to us >> and it shake enough other assets that people have been comfortable with because the Fed's been printing the money and making money free for 10 to 15 years. You know, you look at a Fed a Fed funds chart, go back 75 years, you can get it from St. Louis Fed and you've either been at zero or you got up to all of 5% or so and then back down to zero and then back up to five. But if you look at that 15 16 year history since 2009 and compare it to the other 75 years, it's a joke. It's like off the page cheap. Money has been made artificially cheap for a decade and a half plus and therefore the liquidity flow went somewhere. It happened to go into stocks. But as soon as the investment public and asset managers realized, uhoh, it's not working anymore for stocks. It's working over there in the price of commodities or the price of gold and silver. I'm going to shift my money over there. And so when the stock market wobbles, that will be a further fuel, one for the Fed because it'll create some data points for them, but fuel of money moving that the Fed prints into the monetary metals where it's protected. And I think that's why you got to watch the bonds because they could impact the stocks. the impact of stocks like we think by this summary you'll realize oh yes the money is flowing from stock to gold and monetary metals >> and I always think it's a good idea to quantify when you talk about money printing just to throw out some numbers so we can put it into perspective but in January of 2020 the money supply is measured by M2 was at 15.4 4 trillion. Now it's over 22 trillion. So that's an an increase of well over 40%. >> And uh they just keep printing money and that's what's happening here. So you mentioned you're very bullish on silver >> more so than gold. And the last time we spoke it's also up 3 to 4% on the year. It's been very choppy. Just this week alone it got as high as 90 bucks and last time I looked it was at 75 bucks. So it's come under pressure here in the last day or two. But um the last time we spoke early February, you said your target on silver was 300 to 500 bucks by sometime in the summer. >> Yep. >> The reason was you said it had to do with a number of fundamental and technical reasons create a reaceleration in this price movement. So maybe you can just speak to that and where you think silver's going. Yeah, before we you mentioned year to date in the stock market and gold for example, but if you go back a year to date, May 15th last year, silver, I just did did the math before we came on 137% up. Silver gold 40% up. S&P 25.6% up. So monetary metals year to date May 15th to May 15th is up a lot more than the stock market. So lately, yeah, the stock market's had this goose. That's fine. We love it because we don't want the market to top with negative news. We want it to be in a happy phase and then top. Uh your question was again u the Oh, silver. Silver. Yeah. >> Yeah. >> Silver. I I'll give the story again about copper. Just one example of many. They're rare, but they do occur. Copper was stuck in a price range for multiple decades between 50 cents and a buck 50. 1970s, 1980s, 2000, uh, 2005. In late 2005, copper decided to move up out of this old reality 50 cents to a buck 50. And when it crossed through a buck 50 in late 2005, within several quarters, it was $410. Wow. No headlines. It was peculiar to copper. It didn't happen in all the other base metals. It wasn't because gold was exploding at that same time. It was copper went berserk. And then yeah, it had sharp sell off after that peak, but it lived in a new range around 350 for decades, a couple decades since 2005 to 2020 something. And 30 three to four times the price of its prior average multi-deade price. But when it did it, the point is it did it in a an emotional burst. Lead did the same thing in 2007. It had a similar chart type situation. Exciting metal lead. Okay. Silver had the same pattern for 50 years. Gold kept taken out every high. 1980 taken out in 2011. Took it out again. But silver still capped at 50 through late last year. What's going on there? I mean, it's a monetary metal. Copper already blew out its multi-deade highs. Lead did, gold did. Why is silver contained in a box? Well, it decided no more. Now, let's forget the reasons. Maybe it's manipulated. We know there's been a lot of that institutional manipulation, but the market said no more. I'm out of here. And usually when markets get overpriced at a high, they go down more than they should to correct. And when they're underpriced to the low for too long, when they correct to the upside, they quite often will go maybe twice as far as they reasonably should in an emotional burst like copper did. We measure silver on a logarithmic scale. Instead of an arithmetic normal dollar price chart where, you know, already it's more than doubled. You four bucks to 50, you add $45 on top of 50 and end up with 95. So when it got to 95 late last year, that doubled the dimension of that range, but when you go to a logarithmic scale, which is the best way to do it, copper, for example, back then when it went from a buck 50 to 410 went up to a ratio scale dimension beyond the prior reality. Silver, if you do the same thing, you had a range from four bucks to 50 repeatedly. Well, that's like a t-fold dimension. Four bucks to 50, right? 10 a little more. What's 10fold above 50? 500. And when you do a monetary assessment, what's the money supply versus where it was in 1980? What's the money supply now versus 1980 2001? Silver would be up in that range 3 to 500 just to catch up to the money degradation. also for silver to catch up to its relative value to gold that it's seen over the last half century. Like 1980 it was 6 12% the price of gold. 2000 uh 2011 it was 3.1. Well, right now you're still below two. So it's still cheap. It's broken out. That spread has broken out favoring silver. And that's why silver's done better over the last 12 months by far than gold. Like I said, up 130 something%. Gold's up 40ome. Okay, the next phase should get silver, I think, in a tantrum mood and level probably within three or four months. The issue is to break up out of this consolidation. It's violent consolidation zone. I think we're in the process of that right now despite today's pullback. >> Right. So, we're going to go through a period of consolidation, a lot of chop back and forth, >> and then we're about to emerge. Yeah. >> Right. And so you still have the $300 to $500 target by sometime in the summer, maybe late summer. >> Yeah, I still think it's quite reasonable. I can come up with it so many different ways. Um, and this pullback that we had measured by our momentum trend metrics. It spooked a lot of price people. In no manner did it jeopardize the long-term momentum trend that we measure using quarterly momentum or annual momentum of silver and gold weren't even threatened. Okay, especially annual momentum. Whereas at the 2011 gold top, for example, a mere hundred bucks or so off that high, annual momentum blew structure. This time it didn't break any structure in the drop. The only break you had in gold and silver were intermediate metrics, meaning metrics that when they break, they're worth a couple months of downside or wasted time, which is a stumble. It's not a major trend change. And those have now dissipated. And silver is now leading gold up out of the hole recently in percentwise from the March low, for example. Um, and I think that silver is now leading us up out of here. And I suspect this pullback you're seeing right now is about to end either today or Monday and you'll go back up again. The price guys will start to wake up. They don't look at momentum. They don't know about that. They don't know how to use momentum the way we do. But when they look at a price chart, you've had four rallies, I think it is now, including the recent one, up to 90 bucks. They sell it there, they sell it there, they sell it there, they sell it there. You don't make a top that way. You don't keep coming back to the same distribution. I mean, that's persistence is what that says. And particularly what silver did in March was really bullish because it took out the February price low. If you recall that sharp break in January, February, stopped at 66 bucks on silver. We shot back up to 90. We lived in a range and when the war came out in early March, we had a selloff began in silver again and gold. They both went down and they knocked out that low, the Feb low at 66 on silver, went to 61 for about two hours. That's how fast it was. They broke the low, ran all the sell stops. Goodbye. And immediately reversed and shot back up into the range like, haha, fooled you. Okay, it was a bear trap. And I think that was the low, the March 23rd low at 61. And I think now you probably got support right around where you are in the mid70s. And all you got to do now is inch back up again toward those highs, the high we saw week this week, 90 bucks, and you're out of here. That's when I think you see that acceleration phase. >> Okay. Now, you mentioned copper a couple of times, and copper's done very well this year. It's up over 10% on the year. >> It has come under pressure here in the last couple of days, but nonetheless, what's your take on copper? It's long-term bullish. Nothing it's done recently with a pullback that got down on the lower five area jeopardized anything. It was just a price pullback. Momentum said, "No, no problem." And now you you went up, made new highs again. You're well over six again. Uh I don't have a target on it except to say that we think seven or eight bucks would not be surprising whatsoever. Uh I don't think you have a parabolic situation like you have in silver. I mean, if silver goes from 75, 80, 90 to the levels we've been talking about, it would be, you know, copper be, you know, off the page. I I think it's the silver situation now is the prime focus. Yes, the base metals are going up as the whole complex, commodity complex is going to go up because it'll be the prime recipient. Now, I don't care if the economyy's weak. That doesn't stop Dr. Copper. That's a myth about copper. Uh it can go up in a bad economy. There are plenty of major examples of copper bulls during recessions, but they're going to go up strongly, but I don't have a target on copper that I could come up with in any solid view. Seven or eight bucks looks totally reasonable, but it could go well beyond that. >> Okay. And oil, it's trading around 100 bucks a barrel. I'm talking about WTI. You said it's cheap at 100 bucks. >> Yeah. >> Where do you see oil going? Well, it was a lagard to the Bloomberg this time. Last time back in 2022, we 2021 to 2022, we had the commodity explosion. Then oil was a leader. No headlines. In fact, when the war began in Ukraine, Russia, oil peaked, okay, think about war. Oil goes up. No, oil went down then. Went from $130 down under a hundred. Okay. No, down into the 60s, excuse me. uh in February this year so October last year the Bloomberg we had a buyer was 10650 right now it's 142 okay 10650 last October oil didn't join technically into the upturn until January this year price was 65 WTI closed that month at 65 that's when we turned long-term bullish on oil before the war began unfortunately when the war began And you sucked in a lot of headline chasers. And when you get headline chasers, they usually get reamed for, you know, for buying high. They chase the news. They probably bought at a 100 bucks a barrel. They got up to 117 a couple times. Right now, we're above 100 still. When the Iran situation abates in any way, doesn't have to go away totally, but abates, uh, don't be surprised if oil drops back down in the 80s or something. And it's at that point and only then would I be interested in including oil and oil related stocks in a broad commodity portfolio. It got too far ahead of itself based on headlines and therefore there's some vulnerability there to flush those guys who bought high uh and you could get a pullback. But oil is in a major bull trend. It's not just the war. The war happened after the breakout. So people like say, "Oh, it's just because of the war." No, it's not. It broke out in January. It's 65. Uh, and I think the reason is if you just go back and look at oil price history, 65 bucks been 140 and 130. How come stocks are printed at the new highs, but oil's half the price it was over the past 15 years? And even then, to compensate for the degradation in the money unit, copper probably be 2300. Okay? Uh, it's cheap versus silver, it's cheap versus gold. Plot the spread chart. S&P versus go uh oil. It's off the page. It's like a it's a free asset almost when you look at the spread charts. So, I think it's a place to be, but wait for a shakeout. >> Uh I'm sorry. When you say wait for a shakeout, like so where does it go from 100 down to where? >> I could see support in the, you know, well down in the 80s if you want to go that far, maybe even the high 70s because again, we're bullish at 65. And a pullback like that does not in any way jeopardize the trend structures on momentum that broke out in January at 65. It just be a pullback in an uptrend. But it's the kind of thing that one should expect because you you sucked in a lot of headline guys. >> And down at 80 bucks, you buy it. Where do you see it going? >> Well, once we get a correction that we think is good and we see factors that indicate upturn, we'll tell our subscribers. I don't know where oil's going because in the next several years commodities are going a lot higher and they're going to be a beneficiary of monetary expansion which they've not been for decades now. I mean even the Bloomberg at 140 something right now well off the bare low at 58 or something back in 2020 but still the high in 2008 was 237 like a 100 points off that high. So commodities are in no way overly priced even compared to their own prior highs like oil at highs 140 130 and we're 100 even that's low but you still have to shake out these guys that chased it but once you do then oil you know is fully licensed to resume because our our technical said it's major up and likely to last for a couple years. One of the things I wonder, I don't want to sound conspiratorial, but >> I I'm just kind of amazed at the S&P and the way it took off on April the 1. It's just like this massive wave of buying came in. And I don't know if it's governments >> and and I could say the same thing about oil. Like why is oil only at $100 given what's going on with the straight of Hermoose? >> And why isn't it at 125 or 150 or 175, right? like >> it almost I I wonder sometimes if if you know the government's out there buying the S&P and selling oil >> smart money >> or one government it could be >> number of I don't think so I think the the S&P turn was based again on false buying false selling excuse me in this case do you remember last year January through March we had a selloff based on what a new headline that had not been on the page tariffs have tariffs gone away Now the market Vbottomed and came out of here made a new high. Okay. Now when we were in that laborious distribution zone the prior 6 months 7,000 S&P couldn't get beyond it and then dropped down the mid6500s. We argued technically this is wrong. You got to go up and make a new high. Even though we're major long-term bearish on the S&P but trading perspective, our technicals said nope, you've got to take out the highs and make that glorious new high. And sure enough, they did. Despite the war, they went and did it anyway. I think smart technicians bought it. We had technical reasons to buy it. And now that it's done that, everybody's now the people who were negative then are now gloriously positive. All you hear about where we're going, where are we going? We're looking for when it going to turn down. So that was a technically justified surge. But this point now, the S&P has done that and it has a big smile on its face. That's when we're looking at what's underneath and we see trend structures that will break before you ever break anything on price that looks negative. >> Uh in which case that was the last ejaculation. Okay. >> Michael, you mentioned the Bloomberg commodity index a couple of times and I know you always like to talk about that. So why don't you mention that and where it is and where do you see it going? >> Don't know where it's going. uh except to say that if you did a money degradation valuation of it, I'm sure it would be way way above the 2008 high at 237 and we're 142. Okay, so just getting back there is a massive move. And already since our buy signal in October at 10650, it's 142. And it wasn't because of oil, by the way. Most of that move had already occurred before oil even turned up. So oil is a subcomponent of Bloomberg and yes it helped it but it was already well up out of that hole. So Bloomberg I don't know where it's going except it looks like a protracted investment up move and we're only beginning the second wave. The first wave was that low from late 2020 to early 2022 where Bloomberg went from 58 to 140. Then pull back based for a couple years either side of 100. And then now we've taken out that high that occurred in 2022. Oil has it. Its high was 130. So compare that to Bloomberg. Even oil is underpriced to Bloomberg. But no, I think it's what it is. It's a massive over underpriced asset category. all c all sectors within it except the monetary metals they're they're out above all their hubs but all the base metals oil uh grains sugars waiting I think it's about to turn cotton has already turned it's it's across the board it's not just oil and it's not because of Iran it's it's a major money flow shift and the Fed's about to create new massive rivers of money flow thank you So Bloomberg looks like a good place to be. Uh now you can go within subsectors and focus on ETFs that hold the commodities like oil ETFs, grain, corn, wheat, etc. Or you can go into stocks that are related to a stocks to oil energy stocks, base metals, stuff like that. But I think in in general, you could throw a dart and that category is going to now rise. Okay, so we talked about we pretty well hit on all the major commodities. Why don't we talk about Bitcoin? Because in the past you've called for a massive collapse. You said it was going to bottom around 62,000 and and it did or I think >> Well, I was 60,000 was our first target. >> Okay. >> You know what it low was? >> 60,000. >> Yeah. >> 60,000 and5. And you said it was going to rally up to 75 76,000 and then >> yeah recently we've said you going go into the low to mid 80s >> as resistance. >> So it's been hanging around this 80,000 level for a while now. Are you still negative on Bitcoin? >> Yeah, I don't trust the rally. The rally was to be expected when we were at 127,000 in last late last year. We could see technical evidence that it was going to break down in a big way using long-term momentum. Couple of our metrics both had a had a sell trigger atund just below 110,000 and the other one sell trigger was 100 just below 103,000. We triggered those in November and our first working target not final low was 60,000 and it stopped five bucks in front of it. And since then you had a sharp rally right after that like back into the mid to upper 70s. And since then you've really not gained much more ground. you've held your ground, but we think it's a cont it's a counter trend rally that really has no sustainability. And the issue probably is it's somewhat coordinated to the stock market. And so if we do see the stock market begin now to roll over and we'll watch that evidence as we go week by week, expect Bitcoin to join in. I don't know where Bitcoin's going or or Ethereum. And if you look at an Ethereum chart, it's the lesser of the big cryptos. and go back 10 years, it all it's wiped out almost everything. It'll almost be like Bitcoin being 30,000 right now. That's what Ethereum's done. So crypto does not look good. And the issue then becomes if we have another leg down is not where where you going, what's it going to do after that. This is a new beast. It started futures trading in 17 2017. So, it's not even 10 years in the futures market, which is where really the activity began in terms of public awareness. If you wipe these guys out, and already you've done a good job on Ethereum and and a pretty good job on Bitcoin in terms of how many years of longs have you wiped out, if you take them down another step, it's not an issue of the technicals, then then it's an issue of, hey, this isn't a correction. This isn't even a 50% bare market, which we've already had. This is saying this whole game was wrong. It fundamentally isn't a new reality currency. It was, you know, it's a tulip bolt mania. It's our version of it. Now, I'm not going to predict that, but I'm going to say that when you do break through 60,000 again, and we also have some numbers on Ethereum that aren't all that far below. When you break certain numbers below you, it's the next move down that like confuses the whole issue and puts the whole thing in a big question mark whether it's even a viable entity or whether it was a brief delusion because of the pain because of the pain it creates. Yeah. >> Well, Michael, this has been a great discussion. Before we wrap it up, why don't we just summarize a lot of the main points. So, first of all, with the S&P at 7,500, you think it's topping out in here. You're seeing a lot of underlying weakness within the uh within the index. Uh in terms of gold, you're bullish on gold. You think it's in going through a period of consolidation right now before it takes off again. Silver, you're very bullish on silver. You're still looking for a three a target of 300 to 500 by late summer. >> Uh copper, you're also bullish on copper. It's going higher. You didn't throw out a target number, but you said 78 bucks is quite easily attainable. >> Uh with regard to oil, it's at currently at 100 bucks. You think it's very cheap here, but you would not be surprised if we saw a pull back down to 80 bucks >> and you must buy it at 80 bucks because it's going significantly higher. >> And Bitcoin, you're still very bearish on Bitcoin. Did I miss anything? >> Yeah. Yeah. Yeah. And and I guess the big your big concern about everything has to do with the debt levels and what's happening within the bond market. Bonds going lower, yields going significantly higher. >> It just it it's causing a wave effect in so many areas financial community particularly though nobody's paying attention to it for some reason. Uh, in fact, the spread between XLF and the S&P, you know, where you divide the price of the financial sector ETF with the S&P, go back 20 years or so, it's making new multi-deade historic lows. XLF is melting in value relative to the S&P. What's going on there? I thought everything was happy. Okay, so obviously something knows something's wrong. And it's such a big factor that when it happens, it causes wave effects way beyond what you think could be the wave effects. This is far bigger than a mortgage crisis. And so other assets come into question. And once they do, then you have everything's turned upside down and things that look like like hell for years and are dirt cheap suddenly explode for no particular headline reason. Why? Because money flow. Simple as that. Well, this has been a great discussion, Michael, and I want to thank you very much for spending time with us on a uh Friday >> afternoon or evening. >> And uh if somebody would like to learn more about you and your various services, where can they go? >> It's oliversa.com. >> Uh take your time on the site. You'll learn a lot about our methodology and request some sample copies. >> And I will make sure I include a link below in the show notes. >> Thank you, James. Michael, once again, thank you and good luck in the markets. >> Thank you.
Michael Oliver Latest on Gold, Silver, Oil and S&P | Recorded Evening May 15
Summary
Transcript
Michael, thank you very much for joining us today. The last time you and I spoke was February the 10th, more than three months ago. Can you believe it's been that long? >> Yep. It's uh been exciting time, but actually net boring for the medals because if you go back to February 10th Okay. Anyway, go ahead. >> Well, at that time, >> at that time the S&P was at 6,800. Now it's at 7,400 or 7,500. It's up 8% on the year. It bottomed at 6,300 at the end of March and then on April the 1st it's like everything just changed like that and it's like this massive bid came into the marketplace and here we are it's at 74 to7500 now and the sector that really has been driving this whole market are the semiconductors. The SMH has ripped from $350 up to 560. >> It's up 50% on the year. Intel a name that we thought was all but dead. up 200% on the year now and most of that move just came since the 1st of April and then SanDisk I got to highlight this one also it's up 500% on the year but why don't we just start right here when you look at the S&P >> what is your assessment of the S&P as it stands right now it's like making new highs every other day and then on a follow-up question I guess are you concerned about what you're seeing right now in these semiconductor stocks >> yeah well okay in the broad stock market I think it's topping. I thought it was topping since early last year. Now it's gone up since then. Fine, because we thought it was topping in January of 2000.com top and it didn't peak until August at about 15% higher than it was in January 2000. Same in 2007. You have a process where you get this distribution. You can sort of see it in the market where there's selling and there's like a ceiling and then they punch through it usually like, "Oh boy, we're going up forever." Okay. And in this case, what they did is they skewered the people who sold the war news. They should have been skewered. You never make a market top on some dark piece of news. You always make a market top and everything is happy. So hopefully the China stuff comes out mellow. You know, okay, Iran mellows suddenly it isn't an issue and everything's happy again. And what we see in those very few sectors that have made new highs, punch, everybody should go just punch up an S&P 500, let's say a monthly chart, and then punch up all the major sector ETFs like financials, banks, industrials, consumer discretionary XLY, consumer staples, XLP, uh healthcare, XLV. punch up those monthly charts and then look at the S&P chart and say, "Hm, what caused that?" It's simply the Nvidia, AI, and semiconductors. The other sectors aren't making new highs. They didn't make a new highs. Some of them making far lower highs than they did six or even last year in some cases. And they're closer to the recent lows like the S&P being back down around 6,500. They look more like that. So, there's some even obvious price evidence that something's wrong here. You're down to literally a couple liters. And uh when I look at the semis and I don't look at them all that closely all the time but lately when they went vertical there was a clear price chart type pattern which we don't usually pay too much attention to but it looks like a blowoff top where you have this huge surge then you had like three months of of violent consolidation where you they held their gains like looking at the socks index for example and then you burst out of it and have an equal surge that you had in the first half. That's like, you know, that's a typical swing move, but it's also blowoff looking. So, in other words, even though it's super strong, it looks like the kind of verticality you get at the tail end of an overdone sector or market. We shall see. But I'm pending very negative on the stock market. I think that the evidence of that will be subtle and like if you just look at the S&P NASDAQ has the same attributes NASDAQ 100 if you you had a range where you there was repeated selling at 6,900 to 7,000 for like six months in a row like a haircut and then you had that little brief drip drop on that news that I ran thing. So they sold, they took out those lows and a little bit away at the 6,300 and immediately jerk back up into that range and blew out the high of that that range. Well, we call that range a distribution zone where somebody's saying, "Hey, I'm out. I'm out. I'm out. I'm out." And therefore, it capped the market. And then you broke out. Now, if that breakout doesn't sustain, and we don't think it will, and you slip back down into that price zone, like get below 7,6,900, that kind of thing. So, you know what? We're 74 something right now. So, it's not a big drop. You get back down under there, that's called we we call an abort. That's the old Cape Canaveral rocket launch. It went up and then oops, coming back down to the pad. Okay. Uh, so I'd be watching that if I were just looking at price charts. But we have momentum reasons to assume that's likely to happen. And when it does happen, there's potential disaster not far below getting back into that range. In which case, then suddenly the stock market will be paying attention to what? The government bond market. The the nuclear event that's already unfolding. >> Well, just because you brought up the bond market, why don't we go there? Because We've seen uh the bonds coming under pressure. The the yield on the 10-year it's at 450 give or take. The 30-year it's well over 5% now. I believe it's around 510. So why don't we stock talk about the bond market? What are your views? Why are you so concerned? And what is it telling us? >> Well, Jamie Diamond fundamentally speaking in in Norway at a conference a week and a half ago said, "We got a bond bond crisis, government bond crisis coming. We're going to have to deal with it." Okay? He wasn't saying, "Well, 10 years down the road, we're going to push it down 10 more years again." You know, this 10 years, 10 years, it keeps getting worse and worse, and now finally to a crisis point. Well, that we know the Japanese are in one. And their solution was what we would expect. The prime minister, who's a conservative Japanese politician, said, "We're going to print print." Well, they are. Uh, and now suddenly the US is in the same technical position. our government, we look at 30-year bond futures. That's the end of the market that the Fed can't manipulate. Okay? It's bigger than they are. Uh they can affect the 90-day T bill and all that stuff, but the their fluctuations and rates don't affect that in that market crashed between 2020 and 2022. The bond prices, yields went up. So, bond futures crashed back then to about 117 after having been over 190. So that's a big percent drop. Over a span of about a year and a half, they dropped. And since 2022, late October 2022, you could draw a line sideways through the price chart or through the yield chart at the upper level, and you can't seem to get out of that ink. Price keeps trying to get a rally going, a basing pattern out of what might be a base. They've had three major rally attempts. Three is usually all you get. That ended about two months ago by our metrics and we said, "Uhoh, this guy's going to melt through the lows. Now he's starting to melt through the lows, yields through the highs." And again, the Fed is in control of this. The only thing they can do is bring out fire hoses. And it's not one of their mandates. You know, it's not it's not fighting inflation because they claim, "Oh, we we got to fight inflation by raising rates." Yeah, right. Give me a break. and they get they worry about the unemployment which is not a problem and they're not worried about it therefore because unemployment is stable unemployment number which it always is prior to a bare market anyway other words unemployment never tells you that you're about to enter a stock bare market it only tells you later oh that's why so the Fed doesn't have a mandate and yet they got a bond crisis so last November I probably mentioned this on your prior shows head of the New York Fed said we're going to start buying bonds. Okay. Well, if they did, it hasn't worked. The only thing it's done is slow the decline. But right now, T- bonds are now at a point where even obvious price chart watchers or yield watchers are saying, "Uhoh, something's happening here." And you can see it reflected in the financial sector. Some key banks, too many key banks, credit card companies, they're even reflecting. So, it's not just government debt, it's private debt. This is far bigger than the mortgage event of 2007 through9. This is government debt. This is a market bigger than the entire stock markets of the world. Okay? Japanese government bonds, yard bonds, UK bonds, you name it. If this commences, and we we argue it's technically now commenced, a rise in long-term yields, crackdown in price. Two things will happen. One, it'll have wave effects. Two, it'll cause the Fed to have to do a take action like get out some huge fire hoses, whatever policy they want to call it or do and it will have impact on other markets and but it will it it'll come to the four. It's always been here but everybody's ignored it. So all they talk about are earnings and AI and semis and nobody's talking about the the government debt debt market. It's the end of the world type market. And I think gold knows this. I think the monetary metals know what's going on. And that's why they've been going up for a decade knowing it's coming. And now I think they're about to go into a parabolic mode. >> Okay. And when you look at the bonds, okay, I want to stick with the 30-year. Okay. It's currently at the yield is at 510. Where do you see that yield going? And this move that we're seeing in the bonds, is this all due to expectations? We don't have any technical argument for where it might go except to say we know it's gone too far and we know that any further will cause total public and ma and institutional investor doubt about the stability the the place to be. You know, T- bonds used to be a place to be as an alternative, a safe place. And you know, the CIO of Morgan Stanley several months ago said, "No, 6040 rule out the window. It's 60 2020 20% gold now." Uh, he knew what was coming. Jamie Diamond knew what was coming. The issue was the timing. And we argued that two months ago the warning signal came up technically that duh, we're not going to hold. And sure enough, now they're slipping down and we're at the multi-year lows on the bond prices. You go any further and they'll start, you know, what's going on here. And it's not an issue where is it going, it's just a sense of what's going on. And when the public has that sense in institutions and foreign governments and you know, it's like dump it. Okay? You can't have that. And there's only one alternative. The government can't do anything about it. They, you know, unlike you or me, we can go bankrupt. They can't go bankrupt. only thing big do is print like the Japanese are doing like we'll have to do and well there'll be consequences what will be the consequences uh and that's that's the investment issue right now >> so the latest CPI number we saw for the month of April was 3.8% 8% up from 3.3 the previous month. A lot of this has to do with the move in oil. And uh by the way, in the city of Toronto, I'm paying about $5 US. U per gallon. What are you paying in Denver? >> Four and a half for the upper grade gasoline. It it it's that's not a causal factor. It's a it's a mere wave consequence of the monetary explosion. It's always ongoing. And we could talk about the commodity complex. I think that's a major issue right now. >> All right. So, why don't we talk about gold? You said you um >> so gold is >> I guess you could define it as in a period of consolidation right now. It's up around four or 5% on the year, but we've been back and forth a lot of chopping choppiness. >> But I think a lot of the underperformance in gold, in my opinion, has to do with the fact that you got these bonds or the yields on the bonds moving up. And at the same time that's bringing the US dollar higher. What are your thoughts? No. Okay. >> An analysis. >> Uh the dollar relation to the gold is very pathetic. Dollar index we're talking about now. That's merely the dollar measured versus several other fiat currencies. So it's a competition of which piece of paper is more worthless than the other. Okay. And the varying issue. Okay. So versus the euro and the yen which constitutes 70% of the dollar index. The dollar index is very weak. In fact, right now, yeah, you're at 98.99, but you've been you collapsed. We got bearish a year ago in March at 10450. It dropped down to 97890. It's been doing this for like 3/4 of a year, mostly below 100. Doesn't matter. Momentum, long-term momentum is fully broken with trend structures going back a decade and a half. So, momentum says, "You're gone." Price is the one that's trying to hang in there. And every time there's an uptick, people say, "Oh, the dollar's strong." If you go back to 2015 when gold made its low in December at 1,50, where was the dollar index then? It's where it is right now. So, if you didn't buy gold at 1,50 and it's now four-fold and your excuse was the dollar, then you missed a four-fold move in gold because the dollar index had nothing to do with the trend in gold. It's merely its competition to other degrading currencies. Okay? I think the dollar is likely to have another wave down of huge proportions like get down to 70 and so forth. But that's really not a prime mover for gold. The degradation in the dollar and the yen and the euro and the pound by constant monetary expansion is an ongoing motor underlying money silver and gold and that's likely to increase because of this government debt crisis. So the government debt crisis regardless of the better yields is indicating instability, uncertainty in that asset category, which means if you're smart, you don't put your money in there to get the yield. Uh you know, something's wrong here. You got you got a borrower that can't pay, so he's going to print it. Okay? Uh CPI is merely a reflection of inflation. It is not inflation. It's the increase in the money supply ongoing. That's inflation. And it shows itself in stock prices, commodity prices. And when your granddad built a house, it was $4,500. Your father, it was $45,000. If you want a median home today, it's $450,000. That's called inflation. It's reflected in everything, including the stock prices, including gold prices. Some will underperform that. Commodities vastly underperformed the rate of degradation in the money unit. The S&P has reflected it. If you go back to 2000 to the present and look at M2, how much it's grown percent S&P has grown the same percent. So all the S&P has really done is go hoham for a quarter century in terms of real buying power. You've not made money. You've made nominal money, but it's because of a degrading money unit. So gold has vastly outperformed it and silver is about now to leave the page on that issue. Okay. So right now it looks like that flipping of asset preferences which investors control the Fed doesn't control it is going to shift from stocks into the cheaper stuff and oil is one of them. Even after the recent surge it's still cheap. Uh and commodities is as a category. So anyway that's that's my assessment of that. Um it's inflation is not not that okay. >> Okay. And when you say you're bullish on gold, so right now it's trading around call it 4600. Where do you see it going? >> Well, you know, even JP Morgan a couple months ago said 9,200. Okay. And all the banks that come out with reports and they're bullish on it, they always every like every month or two they'll up it by a thousand. You know, they're they're Okay. Gold twice in its history since it was legalized in 75 has had two bull markets. Each of them was eightfold move from bare low bull high. Our bare low is 1,50. You do the math. Says something like 8,500 would merely match the dimension of the bull market that peaked in 2011 or the one that peaked in 1980 in terms of multiple gain from bare low to bull high. So that would merely be hoham. I did it a third time. Well, so JP Morgan's assessment, I didn't even read it, but I saw the conclusive number. It's probably fundamentally based, was 9,200, which happens to be in that ballpark. I don't think gold will stop there. I think the crisis we're facing will take gold to some level that I can't predict. I don't have a target except to say a lot higher. The one I'm most focused on is silver because I think silver could go absolutely parabolic. And the crisis you're talking about is you're talking about the federal debt $40 trillion worth and at some point this is is going to catch up to us >> and it shake enough other assets that people have been comfortable with because the Fed's been printing the money and making money free for 10 to 15 years. You know, you look at a Fed a Fed funds chart, go back 75 years, you can get it from St. Louis Fed and you've either been at zero or you got up to all of 5% or so and then back down to zero and then back up to five. But if you look at that 15 16 year history since 2009 and compare it to the other 75 years, it's a joke. It's like off the page cheap. Money has been made artificially cheap for a decade and a half plus and therefore the liquidity flow went somewhere. It happened to go into stocks. But as soon as the investment public and asset managers realized, uhoh, it's not working anymore for stocks. It's working over there in the price of commodities or the price of gold and silver. I'm going to shift my money over there. And so when the stock market wobbles, that will be a further fuel, one for the Fed because it'll create some data points for them, but fuel of money moving that the Fed prints into the monetary metals where it's protected. And I think that's why you got to watch the bonds because they could impact the stocks. the impact of stocks like we think by this summary you'll realize oh yes the money is flowing from stock to gold and monetary metals >> and I always think it's a good idea to quantify when you talk about money printing just to throw out some numbers so we can put it into perspective but in January of 2020 the money supply is measured by M2 was at 15.4 4 trillion. Now it's over 22 trillion. So that's an an increase of well over 40%. >> And uh they just keep printing money and that's what's happening here. So you mentioned you're very bullish on silver >> more so than gold. And the last time we spoke it's also up 3 to 4% on the year. It's been very choppy. Just this week alone it got as high as 90 bucks and last time I looked it was at 75 bucks. So it's come under pressure here in the last day or two. But um the last time we spoke early February, you said your target on silver was 300 to 500 bucks by sometime in the summer. >> Yep. >> The reason was you said it had to do with a number of fundamental and technical reasons create a reaceleration in this price movement. So maybe you can just speak to that and where you think silver's going. Yeah, before we you mentioned year to date in the stock market and gold for example, but if you go back a year to date, May 15th last year, silver, I just did did the math before we came on 137% up. Silver gold 40% up. S&P 25.6% up. So monetary metals year to date May 15th to May 15th is up a lot more than the stock market. So lately, yeah, the stock market's had this goose. That's fine. We love it because we don't want the market to top with negative news. We want it to be in a happy phase and then top. Uh your question was again u the Oh, silver. Silver. Yeah. >> Yeah. >> Silver. I I'll give the story again about copper. Just one example of many. They're rare, but they do occur. Copper was stuck in a price range for multiple decades between 50 cents and a buck 50. 1970s, 1980s, 2000, uh, 2005. In late 2005, copper decided to move up out of this old reality 50 cents to a buck 50. And when it crossed through a buck 50 in late 2005, within several quarters, it was $410. Wow. No headlines. It was peculiar to copper. It didn't happen in all the other base metals. It wasn't because gold was exploding at that same time. It was copper went berserk. And then yeah, it had sharp sell off after that peak, but it lived in a new range around 350 for decades, a couple decades since 2005 to 2020 something. And 30 three to four times the price of its prior average multi-deade price. But when it did it, the point is it did it in a an emotional burst. Lead did the same thing in 2007. It had a similar chart type situation. Exciting metal lead. Okay. Silver had the same pattern for 50 years. Gold kept taken out every high. 1980 taken out in 2011. Took it out again. But silver still capped at 50 through late last year. What's going on there? I mean, it's a monetary metal. Copper already blew out its multi-deade highs. Lead did, gold did. Why is silver contained in a box? Well, it decided no more. Now, let's forget the reasons. Maybe it's manipulated. We know there's been a lot of that institutional manipulation, but the market said no more. I'm out of here. And usually when markets get overpriced at a high, they go down more than they should to correct. And when they're underpriced to the low for too long, when they correct to the upside, they quite often will go maybe twice as far as they reasonably should in an emotional burst like copper did. We measure silver on a logarithmic scale. Instead of an arithmetic normal dollar price chart where, you know, already it's more than doubled. You four bucks to 50, you add $45 on top of 50 and end up with 95. So when it got to 95 late last year, that doubled the dimension of that range, but when you go to a logarithmic scale, which is the best way to do it, copper, for example, back then when it went from a buck 50 to 410 went up to a ratio scale dimension beyond the prior reality. Silver, if you do the same thing, you had a range from four bucks to 50 repeatedly. Well, that's like a t-fold dimension. Four bucks to 50, right? 10 a little more. What's 10fold above 50? 500. And when you do a monetary assessment, what's the money supply versus where it was in 1980? What's the money supply now versus 1980 2001? Silver would be up in that range 3 to 500 just to catch up to the money degradation. also for silver to catch up to its relative value to gold that it's seen over the last half century. Like 1980 it was 6 12% the price of gold. 2000 uh 2011 it was 3.1. Well, right now you're still below two. So it's still cheap. It's broken out. That spread has broken out favoring silver. And that's why silver's done better over the last 12 months by far than gold. Like I said, up 130 something%. Gold's up 40ome. Okay, the next phase should get silver, I think, in a tantrum mood and level probably within three or four months. The issue is to break up out of this consolidation. It's violent consolidation zone. I think we're in the process of that right now despite today's pullback. >> Right. So, we're going to go through a period of consolidation, a lot of chop back and forth, >> and then we're about to emerge. Yeah. >> Right. And so you still have the $300 to $500 target by sometime in the summer, maybe late summer. >> Yeah, I still think it's quite reasonable. I can come up with it so many different ways. Um, and this pullback that we had measured by our momentum trend metrics. It spooked a lot of price people. In no manner did it jeopardize the long-term momentum trend that we measure using quarterly momentum or annual momentum of silver and gold weren't even threatened. Okay, especially annual momentum. Whereas at the 2011 gold top, for example, a mere hundred bucks or so off that high, annual momentum blew structure. This time it didn't break any structure in the drop. The only break you had in gold and silver were intermediate metrics, meaning metrics that when they break, they're worth a couple months of downside or wasted time, which is a stumble. It's not a major trend change. And those have now dissipated. And silver is now leading gold up out of the hole recently in percentwise from the March low, for example. Um, and I think that silver is now leading us up out of here. And I suspect this pullback you're seeing right now is about to end either today or Monday and you'll go back up again. The price guys will start to wake up. They don't look at momentum. They don't know about that. They don't know how to use momentum the way we do. But when they look at a price chart, you've had four rallies, I think it is now, including the recent one, up to 90 bucks. They sell it there, they sell it there, they sell it there, they sell it there. You don't make a top that way. You don't keep coming back to the same distribution. I mean, that's persistence is what that says. And particularly what silver did in March was really bullish because it took out the February price low. If you recall that sharp break in January, February, stopped at 66 bucks on silver. We shot back up to 90. We lived in a range and when the war came out in early March, we had a selloff began in silver again and gold. They both went down and they knocked out that low, the Feb low at 66 on silver, went to 61 for about two hours. That's how fast it was. They broke the low, ran all the sell stops. Goodbye. And immediately reversed and shot back up into the range like, haha, fooled you. Okay, it was a bear trap. And I think that was the low, the March 23rd low at 61. And I think now you probably got support right around where you are in the mid70s. And all you got to do now is inch back up again toward those highs, the high we saw week this week, 90 bucks, and you're out of here. That's when I think you see that acceleration phase. >> Okay. Now, you mentioned copper a couple of times, and copper's done very well this year. It's up over 10% on the year. >> It has come under pressure here in the last couple of days, but nonetheless, what's your take on copper? It's long-term bullish. Nothing it's done recently with a pullback that got down on the lower five area jeopardized anything. It was just a price pullback. Momentum said, "No, no problem." And now you you went up, made new highs again. You're well over six again. Uh I don't have a target on it except to say that we think seven or eight bucks would not be surprising whatsoever. Uh I don't think you have a parabolic situation like you have in silver. I mean, if silver goes from 75, 80, 90 to the levels we've been talking about, it would be, you know, copper be, you know, off the page. I I think it's the silver situation now is the prime focus. Yes, the base metals are going up as the whole complex, commodity complex is going to go up because it'll be the prime recipient. Now, I don't care if the economyy's weak. That doesn't stop Dr. Copper. That's a myth about copper. Uh it can go up in a bad economy. There are plenty of major examples of copper bulls during recessions, but they're going to go up strongly, but I don't have a target on copper that I could come up with in any solid view. Seven or eight bucks looks totally reasonable, but it could go well beyond that. >> Okay. And oil, it's trading around 100 bucks a barrel. I'm talking about WTI. You said it's cheap at 100 bucks. >> Yeah. >> Where do you see oil going? Well, it was a lagard to the Bloomberg this time. Last time back in 2022, we 2021 to 2022, we had the commodity explosion. Then oil was a leader. No headlines. In fact, when the war began in Ukraine, Russia, oil peaked, okay, think about war. Oil goes up. No, oil went down then. Went from $130 down under a hundred. Okay. No, down into the 60s, excuse me. uh in February this year so October last year the Bloomberg we had a buyer was 10650 right now it's 142 okay 10650 last October oil didn't join technically into the upturn until January this year price was 65 WTI closed that month at 65 that's when we turned long-term bullish on oil before the war began unfortunately when the war began And you sucked in a lot of headline chasers. And when you get headline chasers, they usually get reamed for, you know, for buying high. They chase the news. They probably bought at a 100 bucks a barrel. They got up to 117 a couple times. Right now, we're above 100 still. When the Iran situation abates in any way, doesn't have to go away totally, but abates, uh, don't be surprised if oil drops back down in the 80s or something. And it's at that point and only then would I be interested in including oil and oil related stocks in a broad commodity portfolio. It got too far ahead of itself based on headlines and therefore there's some vulnerability there to flush those guys who bought high uh and you could get a pullback. But oil is in a major bull trend. It's not just the war. The war happened after the breakout. So people like say, "Oh, it's just because of the war." No, it's not. It broke out in January. It's 65. Uh, and I think the reason is if you just go back and look at oil price history, 65 bucks been 140 and 130. How come stocks are printed at the new highs, but oil's half the price it was over the past 15 years? And even then, to compensate for the degradation in the money unit, copper probably be 2300. Okay? Uh, it's cheap versus silver, it's cheap versus gold. Plot the spread chart. S&P versus go uh oil. It's off the page. It's like a it's a free asset almost when you look at the spread charts. So, I think it's a place to be, but wait for a shakeout. >> Uh I'm sorry. When you say wait for a shakeout, like so where does it go from 100 down to where? >> I could see support in the, you know, well down in the 80s if you want to go that far, maybe even the high 70s because again, we're bullish at 65. And a pullback like that does not in any way jeopardize the trend structures on momentum that broke out in January at 65. It just be a pullback in an uptrend. But it's the kind of thing that one should expect because you you sucked in a lot of headline guys. >> And down at 80 bucks, you buy it. Where do you see it going? >> Well, once we get a correction that we think is good and we see factors that indicate upturn, we'll tell our subscribers. I don't know where oil's going because in the next several years commodities are going a lot higher and they're going to be a beneficiary of monetary expansion which they've not been for decades now. I mean even the Bloomberg at 140 something right now well off the bare low at 58 or something back in 2020 but still the high in 2008 was 237 like a 100 points off that high. So commodities are in no way overly priced even compared to their own prior highs like oil at highs 140 130 and we're 100 even that's low but you still have to shake out these guys that chased it but once you do then oil you know is fully licensed to resume because our our technical said it's major up and likely to last for a couple years. One of the things I wonder, I don't want to sound conspiratorial, but >> I I'm just kind of amazed at the S&P and the way it took off on April the 1. It's just like this massive wave of buying came in. And I don't know if it's governments >> and and I could say the same thing about oil. Like why is oil only at $100 given what's going on with the straight of Hermoose? >> And why isn't it at 125 or 150 or 175, right? like >> it almost I I wonder sometimes if if you know the government's out there buying the S&P and selling oil >> smart money >> or one government it could be >> number of I don't think so I think the the S&P turn was based again on false buying false selling excuse me in this case do you remember last year January through March we had a selloff based on what a new headline that had not been on the page tariffs have tariffs gone away Now the market Vbottomed and came out of here made a new high. Okay. Now when we were in that laborious distribution zone the prior 6 months 7,000 S&P couldn't get beyond it and then dropped down the mid6500s. We argued technically this is wrong. You got to go up and make a new high. Even though we're major long-term bearish on the S&P but trading perspective, our technicals said nope, you've got to take out the highs and make that glorious new high. And sure enough, they did. Despite the war, they went and did it anyway. I think smart technicians bought it. We had technical reasons to buy it. And now that it's done that, everybody's now the people who were negative then are now gloriously positive. All you hear about where we're going, where are we going? We're looking for when it going to turn down. So that was a technically justified surge. But this point now, the S&P has done that and it has a big smile on its face. That's when we're looking at what's underneath and we see trend structures that will break before you ever break anything on price that looks negative. >> Uh in which case that was the last ejaculation. Okay. >> Michael, you mentioned the Bloomberg commodity index a couple of times and I know you always like to talk about that. So why don't you mention that and where it is and where do you see it going? >> Don't know where it's going. uh except to say that if you did a money degradation valuation of it, I'm sure it would be way way above the 2008 high at 237 and we're 142. Okay, so just getting back there is a massive move. And already since our buy signal in October at 10650, it's 142. And it wasn't because of oil, by the way. Most of that move had already occurred before oil even turned up. So oil is a subcomponent of Bloomberg and yes it helped it but it was already well up out of that hole. So Bloomberg I don't know where it's going except it looks like a protracted investment up move and we're only beginning the second wave. The first wave was that low from late 2020 to early 2022 where Bloomberg went from 58 to 140. Then pull back based for a couple years either side of 100. And then now we've taken out that high that occurred in 2022. Oil has it. Its high was 130. So compare that to Bloomberg. Even oil is underpriced to Bloomberg. But no, I think it's what it is. It's a massive over underpriced asset category. all c all sectors within it except the monetary metals they're they're out above all their hubs but all the base metals oil uh grains sugars waiting I think it's about to turn cotton has already turned it's it's across the board it's not just oil and it's not because of Iran it's it's a major money flow shift and the Fed's about to create new massive rivers of money flow thank you So Bloomberg looks like a good place to be. Uh now you can go within subsectors and focus on ETFs that hold the commodities like oil ETFs, grain, corn, wheat, etc. Or you can go into stocks that are related to a stocks to oil energy stocks, base metals, stuff like that. But I think in in general, you could throw a dart and that category is going to now rise. Okay, so we talked about we pretty well hit on all the major commodities. Why don't we talk about Bitcoin? Because in the past you've called for a massive collapse. You said it was going to bottom around 62,000 and and it did or I think >> Well, I was 60,000 was our first target. >> Okay. >> You know what it low was? >> 60,000. >> Yeah. >> 60,000 and5. And you said it was going to rally up to 75 76,000 and then >> yeah recently we've said you going go into the low to mid 80s >> as resistance. >> So it's been hanging around this 80,000 level for a while now. Are you still negative on Bitcoin? >> Yeah, I don't trust the rally. The rally was to be expected when we were at 127,000 in last late last year. We could see technical evidence that it was going to break down in a big way using long-term momentum. Couple of our metrics both had a had a sell trigger atund just below 110,000 and the other one sell trigger was 100 just below 103,000. We triggered those in November and our first working target not final low was 60,000 and it stopped five bucks in front of it. And since then you had a sharp rally right after that like back into the mid to upper 70s. And since then you've really not gained much more ground. you've held your ground, but we think it's a cont it's a counter trend rally that really has no sustainability. And the issue probably is it's somewhat coordinated to the stock market. And so if we do see the stock market begin now to roll over and we'll watch that evidence as we go week by week, expect Bitcoin to join in. I don't know where Bitcoin's going or or Ethereum. And if you look at an Ethereum chart, it's the lesser of the big cryptos. and go back 10 years, it all it's wiped out almost everything. It'll almost be like Bitcoin being 30,000 right now. That's what Ethereum's done. So crypto does not look good. And the issue then becomes if we have another leg down is not where where you going, what's it going to do after that. This is a new beast. It started futures trading in 17 2017. So, it's not even 10 years in the futures market, which is where really the activity began in terms of public awareness. If you wipe these guys out, and already you've done a good job on Ethereum and and a pretty good job on Bitcoin in terms of how many years of longs have you wiped out, if you take them down another step, it's not an issue of the technicals, then then it's an issue of, hey, this isn't a correction. This isn't even a 50% bare market, which we've already had. This is saying this whole game was wrong. It fundamentally isn't a new reality currency. It was, you know, it's a tulip bolt mania. It's our version of it. Now, I'm not going to predict that, but I'm going to say that when you do break through 60,000 again, and we also have some numbers on Ethereum that aren't all that far below. When you break certain numbers below you, it's the next move down that like confuses the whole issue and puts the whole thing in a big question mark whether it's even a viable entity or whether it was a brief delusion because of the pain because of the pain it creates. Yeah. >> Well, Michael, this has been a great discussion. Before we wrap it up, why don't we just summarize a lot of the main points. So, first of all, with the S&P at 7,500, you think it's topping out in here. You're seeing a lot of underlying weakness within the uh within the index. Uh in terms of gold, you're bullish on gold. You think it's in going through a period of consolidation right now before it takes off again. Silver, you're very bullish on silver. You're still looking for a three a target of 300 to 500 by late summer. >> Uh copper, you're also bullish on copper. It's going higher. You didn't throw out a target number, but you said 78 bucks is quite easily attainable. >> Uh with regard to oil, it's at currently at 100 bucks. You think it's very cheap here, but you would not be surprised if we saw a pull back down to 80 bucks >> and you must buy it at 80 bucks because it's going significantly higher. >> And Bitcoin, you're still very bearish on Bitcoin. Did I miss anything? >> Yeah. Yeah. Yeah. And and I guess the big your big concern about everything has to do with the debt levels and what's happening within the bond market. Bonds going lower, yields going significantly higher. >> It just it it's causing a wave effect in so many areas financial community particularly though nobody's paying attention to it for some reason. Uh, in fact, the spread between XLF and the S&P, you know, where you divide the price of the financial sector ETF with the S&P, go back 20 years or so, it's making new multi-deade historic lows. XLF is melting in value relative to the S&P. What's going on there? I thought everything was happy. Okay, so obviously something knows something's wrong. And it's such a big factor that when it happens, it causes wave effects way beyond what you think could be the wave effects. This is far bigger than a mortgage crisis. And so other assets come into question. And once they do, then you have everything's turned upside down and things that look like like hell for years and are dirt cheap suddenly explode for no particular headline reason. Why? Because money flow. Simple as that. Well, this has been a great discussion, Michael, and I want to thank you very much for spending time with us on a uh Friday >> afternoon or evening. >> And uh if somebody would like to learn more about you and your various services, where can they go? >> It's oliversa.com. >> Uh take your time on the site. You'll learn a lot about our methodology and request some sample copies. >> And I will make sure I include a link below in the show notes. >> Thank you, James. Michael, once again, thank you and good luck in the markets. >> Thank you.