Silver Selloff Tests $500 Target: Why Shorts Had "Better Cover" | Michael Oliver

Michael Oliver is calling for $300 to $500 silver. He says it could happen on an aggressive timeline, potentially as early as this summer. But look at the board here today. The tape is cutting a little bit of the opposite way. Silver down around 7%, taking a hit here. Gold on the spot side down about 3%, struggling to keep above $4,500 this week. And it follows a U.S. jobs report strong enough to shift the market from debating rate cuts to pricing in a rate hike. So is this a major sell-off? Is it a setback for those silver bulls? Or is it part of a setup for a much bigger move? Let's look at the numbers. Welcome back. I'm Jeremy Sapper. Now, my guest today is Michael Oliver, founder of Momentum Structural Analysis. And if you're new to the channel, Michael doesn't just watch daily price charts. He tracks underlying momentum and long-term changes in the market. He's been one of the most prominent voices calling for a massive repricing in silver. Michael, good to see you. Good to have you back on Kitco. Thank you, Jeremy. I want to start today with kind of what's moving the metal, because it does kind of hit your timeline a little bit here. The Bureau of Labor Statistics just reported that the U.S. added 172,000 jobs in May. Now, economists surveyed by Bloomberg were looking for about 88,000. So we're nearly double expectations. Unemployment is holding flat at 4.3%. And immediately here, I mean, Bloomberg data shows that traders are fully now pricing in a quarter point Fed hike by the end of the year. You're targeting $300, $500 silver potentially, you know, this year. It's June. And on this data, obviously, silver is selling off a little bit this week. Does a print like this alter your timeline for a breakout, or is this just kind of standard turbulence? Yeah. The latter. OK. Yeah. I think Fed policy is essentially irrelevant to the major trends in the monetary metals. You know, a lot of people think, oh, if the Fed raises rates, that chokes the gold and silver market in the stock market, et cetera. We'll go back and look at the global and also recession should suppress metal prices as well. Right. OK. But we had a combination of global recession and massive rate rises by the Fed, not just on the short end of the market, but long in bonds, 75 to 1980. OK. Go back and look at charts then. Gold exploded. It was vertical. The stock market was a total wasteland for a decade, including that time period. Silver had a massive move as well. We all know it went up to 50 bucks during a time of extremely sharp rate rise. I think they had the Fed funds at 14 percent. OK. And that's a long term bond yields went from seven and a half to twelve and a half percent. And yet gold exploded. So take that notion and there's other proof of what I'm arguing as well, not just that major incident. But a lot of the assumptions that people operate on are simply true here and there, but not true broadly and not to go back and look through the data in the charts, you'll say, oh, it's a coin toss at best or not even that good. And so I think you need to ignore the Fed. The Fed is a first off, it's not a trend maker. It's a trend chaser. Once the trends change, for example, a stock market tops and heads down, you go back and look, they cut rates like crazy. 2000 to 2002, 2007 to 2009. Did that help the stock market? No. During that time, by the way, gold was going up. It's the contrary to the stock market. But anyway, so I think the Fed is irrelevant. Yeah. I mean, for the viewer watching today, though, they see silver down more than six percent on a hot jobs report. What do you tell them? Ignore the Fed reaction entirely or kind of wait for a specific silver level to confirm the structure? Very good. We always wait for our numbers. What MSA does is we look at price charts, sure. And let me make a comment on that, too, once I'm finished about price. But what we do is we take price and convert it into momentum trends. And I don't mean the stuff you have on your screen like MACD or RSI, that kind of thing, but structural charts where it looks like a bar chart, just like a price chart. But it's a momentum oscillator where we're measuring the price action of a given market in relation to a certain, preferably long term moving average. And so, for example, in silver and gold, you know, our last major buy signals on silver were twenty five bucks back in twenty twenty four and in twenty twenty five in the summer at thirty five. And our last buy signal was November of last year at fifty six. And that was it. Those were our last major trigger points. Since then, the major trend has been up in price and in momentum. And the price drop we've seen has not in the least bit damaged the long term momentum trend of silver or gold. It has damaged intermediate trend structures, things that matter for a few months, several weeks, that kind of thing. And so now look at price now. Just forget about my momentum analysis. You go back to January and we had that collapse literally in one day, the final day of January thirty first silver collapsed huge and had some follow through into February 3rd, the first trading day of February. So really a day and a half. OK, you collapsed down to a low of sixty four dollar silver push. You then spent the next several months. Now it's into the six month beginning into the six month after the January peak of going up to 90 and failing repeatedly and keep coming down and probing below 70. We had a cleansing puke that occurred in March twenty third. That's when silver and gold both said, hey, let's go down and blow out the price low that occurred in that early February drop and run the sell stops. OK, sixty four dollar silver. It went to sixty one on March twenty third. Within hours, literally hours, you were back above that sixty four and within a week or so you were ten dollars off the low. In other words, fooey on your sell stops, fooey on your price chart levels. We ran the stops. Big deal. Now we're having a third pullback today as we speak. We're silvers again, probed below 70. But think about it this way. If you drew a line sideways in that January collapse, February low, sixty four buck silver. In fact, take it about ten bucks above that. Put them in mid 70s. You could draw a line sideways through the last five plus months of action up, down, up, down. And yet the bears think they're winning. They're kissing their sister. They were there in January. OK, and they keep selling. And so we've had six months of constant selling pressure and yet no net continued decline, meaning somebody is buying gold and silver down here. Probably a stupid person, right? OK, no, they have a bigger picture of gold and silver than the Iran headline that comes and goes. But the Fed might do or may not do all that. It's all irrelevant. It's the monetary degradation. Major fiat currencies is the ongoing motor under the monetary levels. So this is interesting. I mean, you're saying that March 23rd was kind of that real stress test. Price puked, stops got run and then silver quickly reclaimed that level. Is that the template for today, too? I mean, if this is the third pullback, is it usually where the trend fails or is this where the market just finishes shaking people out? When we run our intermediate trend studies and examine what's happened over the last five to six months since the January peak and the drops that followed, there's ups and downs. And we plot that. We've built what we call structure overhead, meaning a level that if you ever get through it, you can blow the lid off these guys. And that level will occur well before you ever get price up to a level again, like silver back to 100, let's say, or gold back to fifty five hundred. That's when the price guys will wake up, say, well, it wasn't a top. OK, well, momentum levels will trigger way before then. And we've set these beautiful structures. When you see the momentum chart, you say, oh, boy, what a what a breakout level pending just overhead. Right now, I would say this to anybody who's looking at the short term noise. Yeah, remember, we could go and look good. Now it looks bad. Week before that looked good. But sideways right now, we traded down in the 68s today. OK, I'm going to tell you this. If next week you see it up in the 62 to 60, excuse me, 72 to 74 zone and you're short, you better recover, OK, because you've had your three shots to break this market down into the 50 bucks level or wherever you think it's going to go. And you failed. Basically, you've had redundant sideways price action for five and a half, six months. So, I mean, you know, I guess the question is, is a 72 dollar price level, is that just a price level or I guess is that where your momentum is? I've got a bunch of trigger levels on different metrics. In other words, like a three week average oscillator, three month average. But we also have when we study momentum, it's not merely the trend structures like trend lines being broken out above or below or ceilings or anything like that. It's also the age. And here we are. If you go back on the monthly oscillator and go back to history of silver, gold or almost any market. And when you see six months of downtrending pattern of highs or uptrending pattern of lows on the oscillator, you've got some age there on this intermediate metric, a three month average. This is now month six off of the high. January high, February lower high, March, April, May, June on the oscillator continues to descend. And yet after six months of pressure, you're still trading where you were. In fact, you're above where you were in that first break. So it's been six months of the clock burning for the bears and they can't seem to get it any lower and sustain it. And what they saw on February 3rd. Trying, trying, Michael. I mean, listen, that's helpful. So for viewers, you know, you're not saying price alone matters. You're saying price only matters once it's measured against the structure. I want to pull up a chart that you kind of specifically asked to discuss today as well. I mean, this is from page four of your October report tracking silver and gold on long term monthly log charts. Now, I just want to give some context to the viewer, because I mean, your report argues that gold is repeatedly broken into new higher price ranges while silver was contained in the same kind of broad range from roughly half a century. Right. I mean, at the same time, you wrote that gold was about fourfold off of its 2015 bear market low compared with prior roughly eightfold advances. So, I mean, meanwhile, silver only marginally traded above its long term range. I mean, you kind of concluded that MSA expected silver to unleash, and I quote, unleash into a new, totally new price reality. So are you saying silver's kind of been mispriced for 50 years? Yeah, well, if you go back and look, well, first off, the thing you should really look at the fundamental data point is an M2 chart. Federal Reserve of St. Louis go to their site to type in M2. And you can go back and click on a month, like 1975, January, February, March, you can see where the money supply was each month and do the math between where we were, let's say, in 1980 and where it is now. It's like a 20, 25 fold gain in the money supply, not 25 percent, 25 fold. OK. And you look at a gold chart and remember, people like to talk about silver as an industrial metal and it is, but it's also money. It has been money for 3000 years, right alongside of gold. It's been the poor people's poor man's gold, but it has a industrial supply demand deficit now for five years in a row, I think. And so you've got a lot of things building under silver. Why has silver between 1975 and October of last year, when that chart that I sent you was, is it pushing the top of that range, that 50 dollar ceiling? It had been caught in a range that was a tenfold range from about four to five bucks on the bottom to 50 for 50 years, half a century caught in a box. Gold in each of the bull swings that silver went back to 50, 50, et cetera, made vastly new highs each time. In fact, when you measure gold from its bear low that preceded any bull market high, like from 1976 was a 50 percent drop from the 75. I start there. 1980 was an eight fold gain in gold price. Then you go to 2001 where gold to pull back. It was about 260, actually 256. And by 2011, an eight fold gain in gold price. Same multiple, same dimension of gain without the kind of fundamentals we have now, which are farmer owners or bullish for gold. Now, where's our bear low? It was a thousand fifty in 2015. We're only four fold, five fold. We're not eight fold, eight fold. We put gold like eighty five hundred dollars and then you will at least be able to say, oh, gold just had a bull market that matched the two prior ones. Oh, big deal. OK, and yet we have a government global government bond crisis now, something we've never had before, which has monetary waves. How come silver was caught in the box the whole time up until October? You can look at a chart of copper and go back to seventy five through the present copper for multiple decades was 50 cents to a buck, 50, 50 cents to a buck, 50. In late 2005, copper punched up above the buck fifty level and within several quarters reached four dollars and 10 cents in a vertical surge in several quarters. Multiple decades taken out several quarters at quadruples, its average price quintupled above the low and lived in a new reality after that. Instead, copper didn't go back to 50 cents. It basically lived in a three and a half dollar range. Now it's six forty. OK, how come silver copper wasn't restrained? Gold wasn't restrained. Heck, lead wasn't restrained. Lead did the same thing copper did. It did it in 2007. What the hell's going on with silver? Well, you know, we know the stories that are out there and they're not just stories. They're they're validated. There's been an attempt to suppress the price of silver. But obviously those guys failed because last October silver said, OK, no more. And it produced the first surge in a tantrum, not the satisfying surge, but the first statement, I'm out of here. I'm going to catch up to old reality, make a new reality just like copper did, just like gold did. And I think the next after we come out of this congestion zone, which will be viewed in hindsight as a congestion zone, what's on the other side of that will be far sharper and more vertical than what preceded it. And I still think that's going to happen. I have no reason to change that view. It's a matter now of defining when does that upturn occur sufficiently to say, OK, we're coming out of here. Yeah. And my numbers are not all that far overhead. And I mean, to your point, I mean, if they failed in October, they I mean, why is silver kind of still being hit this hard today? Is it just noise or are they still able to control the short term tape? Well, probably there's some influence there. It could also be that the public buys into the argument that it's been vertical. Well, when you look at an arithmetic chart, a dollar scale chart, yeah, it looks vertical. You went from broke out over 50 and went to 120 briefly. And now you're living in a range that's about 50 percent higher, 75 bucks, let's call it, than the old highs. You're still not that far above them on a ratio basis. When you go back and study like that copper move I told you about, or the lead move with multiple decades of lead action suddenly broke out several quarters in quadruple. OK, you put those on a ratio chart, a logarithmic scaled monthly silver chart that I'd sent you, and you take the dimension of that range, which was a tenfold basically silver, four bucks, five bucks, lows to 50, four bucks, tenfold range. Add that to the range on a ratio scale and it says, what, five hundred dollars. And if you go back and study the price of silver in relation to the money supply and what gold's done versus the money supply, which is at least match it 25 fold since the 70s, 80s, silver hasn't. If silver merely caught up to that relationship to the money supply or caught up to what copper did in late 2005, early 2006, silver would be 500 bucks. OK, there's other reasons for this three to five hundred zone, not just those. But anyway, I think we're headed there. I don't see anything but congestion here. And if we'd had this interview a week ago, we'd be looking at upticks, people be smiling. It's like every other week, they smile, they frown, they smile, they frown. And yet for six months, unless you shorted a hundred bucks, you're not making any money, really. It's up and down. I want to talk a little bit about the engine of it all, because, I mean, your work obviously relies heavily on debt monetization, the idea that central banks are ultimately going to be forced to print money. And I kind of want to look at what's happening this morning. I mean, the two year Treasury yield jumped to around four point one percent on this jobs data. Swaps are pricing a hike, not a cut. How does silver kind of reach three, five hundred when markets are still pricing this whole Fed cut? And I know, but we still got to talk about the bonds, too. I mean, instead of the liquidity expansion that your kind of case depends on. Now, it's the in 2007 to nine, the Fed panicked. In fact, they put the top on the stock market in 2007. In September of 2007, they cut rates by half a point, which is a surprise rate cut for Nancy. Market ran up, made an all time new high. We thought in late 2006 that it would peak in the zone and we nailed the zone and it peaked there. They cut rates all the way down because they were panicked. They realized the mortgage crisis, which they reassured us was not going to be a problem, was a problem. Lehman Brothers went under other companies, so forth and so on. But this time around, it's not mortgages. This time around, it's not just a dotcom bubble like in 2000. This time it's government debt market. And, you know, the CIO of Morgan Stanley about four or five months ago said, OK, the 60 40 rule, 60 percent stocks, 40 percent bonds for a balanced portfolio goes out the window. It's now 60, 20, 20, 20 percent for gold. Well, that was a heck of an admission, you know, an academic reality and admission of this. This other balanced portfolio idea is not working. And if you look at bonds, they're not a safe place to be. And they're technically, by our work, they collapsed in 2022 in price. Yields went up. But since then, they're comatose. They can't seem to get off the floor or off the ceiling and yields. And now we measured a few months ago when bonds came down to one hundred and fourteen key bond futures. Right now they're hundred eleven. That this process of basing was failing. We're going to punch through the yield highs. We're going to go through the price lows. And when you do that, the Fed, it's not one of their mandates. You know, it doesn't say we're here to defend the government debt. OK, but that's that's their mandate. The B.O.J. has done everything they can do, including the prime minister said we're going to print, print, print. She's a Trump like politician in Japan, supposedly free market. And Trump, we know he wants to print, print, print, cut rates, cut rates. And that's what they're going to have to do. Yeah. So, I mean, Japan's kind of the warning case. The B.O.J. has bought, capped, intervened, and the pressure hasn't hasn't went away. Are you saying the U.S. is now entering its own version of that same problem? Yeah, well, because President Williams of the New York Fed in November said that the Fed is going to start buying bonds and his excuse was his reason was to provide liquidity to that market. How about support? Well, actually, bonds then were 117 to bond futures. And since then, they've gone down. Yields have gone up again. And we're pressing at rate highs to go back to, I think, 2007 right now. OK. And there's a lot of long term debt out there that is choking because of this, not just government debt, but private debt. We know that. And so the Fed is acutely aware and was pretty aware back in November that we got to defend this beast. And that means we got to buy this stuff. We got to print, print, print. And they may talk all about short term rates all they want. But that long into the bond market, which has not been under their control generally ever, they're going to have to do what the Japanese are doing. And there's other governments in the Western world as well that have very bad debt situations, crisis level situations. Jamie Dimon said, you know, a couple of weeks ago, we're into a government bond crisis. We're going to have to deal with it. He didn't mean 10 years from now. And our technicals argue he was dead right about the timing. And the Fed knows it. And I don't care what they say about all inflation as they measure it, which is false. It's not inflation. It's the effects of inflation like commodity prices, consumer and wholesale prices. Those aren't inflation. They're reflections of monetary growth. And they have to print. So that's gold and silver know that. And if the bonds don't work as an alternative, there's always been an alternative, by the way. People don't understand this. Whenever the stock market has had a major multi-year bear market, gold has been a place to be. Yeah. Back in twenty nine to thirty two, you couldn't buy gold because, you know, it was banned. But you could buy gold miners and the history of the gold miners was like vertical thousand percent for homestead mining during that massive decline in the stock market. And the same is true between 2000, 2002, the dotcom break went up 2007 to nine. Gold was net up despite that bad month in October 2008. Gold was a net uptrend continued on until 2011. And it will be the only alternative this time because this time it doesn't have T bonds as another alternative place to be. Yeah. Which could exaggerate the verticality. So, I mean, is the trigger for gold and silver kind of the bond market break itself or the market realizing that the Fed's rescue makes the currency problem worse? Yeah, I think gold knows this, but nobody talks about it. They talk about the Fed raised rates that hurts gold. No, it doesn't. Historically, you go back, as I said, you can go back and find many instances where rates rose and gold went up. OK, so that's like saying what's the rainfall of Dubuque, Iowa? Therefore, that affects gold. OK, maybe you'll find a correlation there, too. So the real issue is the ongoing printing of money. Right. And again, punch up an M2 chart and nail it to your wall and then nail a gold chart underneath it and you'll find the asset out there that has protected you all during that time. Silver has lagged dramatically. Yeah. So, I mean, so if gold is the kind of the place to be then here, Michael, I mean, is is gold the safest expression of this thesis while silver is the highest beta expression? Silver is the we don't just come up with a fundamental assessment because we don't do that. We try not to. Yeah, I know there's an industrial supply demand deficit. OK, I don't want to deal with the intricacies of that or whatever, or whether what's going on in the COMEX or, you know, et cetera. I don't care about that. Those are come and go news stories. The real issue is the ongoing degradation in the money units, not just the Japanese, but ours and the UK and EU and the so forth. It's a competitive degradation in money. And gold and silver appreciate during that time, but silver has lagged for whatever reason. And it's now saying, I'm going to have a tantrum. We all know when you look at if you historically are aware of markets, you know that markets often will make excess highs and excess lows, particularly highs. People are aware of in hindsight. Oh, look at that bubble top. No wonder it collapsed 80 percent. The dot com. You know, it was valid. The 2000 top and the Internet said the Internet's going to change your life. It did. And yet Nasdaq 100 dropped 82 percent in two years. Yeah. OK, so fundamentally true. But it was excess. It was an issue of prior excess for too long. In 2000, it corrected for it and it overcorrected, no doubt. Silver has been in a box that hardly any other metal in the world has been in for 50 years, and it only just came out of the box a handful of months ago. And its first impulse was to gush a bit. OK, not not to double the range, the logarithmic scale like 500. And normally in these moves, like in the copper move and the lead move that I've mentioned, there is a jiggle in the middle. I don't mean in the middle of the price, but generally in the middle of the several quarter move, you'll find a point where, oh, golly, that's the top. Right. And it wasn't. OK. And then it's that latter part after the disbelievers have really fully, you know, expunged themselves, their positions or gotten short. Even that's when you have the verticality, because when you overcome that congestion zone, even the doubters say, well, golly, you know, what do I do now? What if you end up buying it? You know, I think that's where we are. Well, this is this is what I was going to ask you. I mean, let's bring it down for investors. I mean, you and I talk about this stuff all the time, but for investors, that matters if silver is going to make excess highs and excess lows. How do they avoid getting shaken out on the lows or trapped at the highs? But the problem is buying late. And again, as I said, MSA offers major long term signals based on long term metrics that break through something. And we had annual and quarterly momentum breakouts on silver back in emerging through 25. That would be back in 2024, March, twenty five, twenty six dollars. That was our first major signal. Then when it came up through thirty five in June of last year, it had already bumped over thirty five twice. It came back a third time and we said this time it's going through and this time we're going to accelerate. Well, sure enough, we went through thirty five. Next thing you know, we're up to ninety five, blew out the top of the range, congested a bit in a hundred and twenty. That was its first little part of the tantrum. But then what we've had since then is that midpoint, I think, in time, doubt period where you shake out like, for instance, the March sell off, took out the Fed blow. You shook out no doubt. Anybody with a price chart and drew their lines and I'm out, I'm gone. Why? Because he bought it ninety bucks. Now, unfortunately, we can't offer primary entry levels anymore. Those have already occurred. What we can offer is a signal of when we come out of this congestion without waiting for it to literally come out of the price congestion. And that's what we're focused on right now. And I think that's likely to occur this month. I wanted to move on to equities. Our time, I'm looking over 30 minutes. I told you it goes too damn quick all the time, Michael. But I want to move on to equities quickly, because if your bond market argument is right, the stock question is not just our valuations high. I mean, it's whether the asset is supported. The whole bull market is turning against it. What tells you maybe this is kind of a rotation trade today? I mean, we're looking at the markets. It's you've compared this to tops in 2000, 2007. But historically, right. The real catalyst arrived after the top was already in. Yeah, usually you break down pretty hard, like 20 or more percent before the Fed gets finally aware of it. And the investors and analysts get aware and say, oh, my gosh, this may be something more pullback. So that's always the case. So our technical work says that the stock market has been in a topping process for a year, more than a year. And we got up to sixty two hundred S&P back in February last year, had a sharp drop based on short term news tariffs. OK, tariffs are still here. And yet the market puked and then went back up anyway. OK, fine. I like that. You don't top on a dark headline. You talk with smiles. OK, now we got the Iran thing. They tried to sell it on that. And we argued, nope, you're going to make a new high. That was above that range that S&P had been capped at seven thousand for like six months earlier this year. Punched through finally in April, May shot up to a new high. Now, our argument is on long term metrics that right now the thing to watch for is any not a collapse, but any move that gets you back down, let's say by the end of the quarter, especially early next quarter. So three or four weeks from now gets you back down to seven thousand or lower, and especially getting back below that price ceiling that we had. In other words, you had a breakout above a price ceiling. Don't get back below it. If it was a breakout, stay above it. OK, get back below it. Momentum says you have the kind of structures waiting for you below that are comparable to the signal structures that we gave a short signal on Bitcoin for back in November. At one hundred and ten thousand and one hundred and two thousand massive, clear long term momentum structures. You couldn't see it on a price chart. We said this is crash like structures. I'll be damned it. You know, we dropped to 60,000, had a rally. We're back to 60,000. That's more than a 50 percent drop. I think we're going to 30,000. But the S&P has the same structure waiting below it now. However, we don't think it's going to get there and break that structure this quarter. We think it's going to position itself to break it next quarter. So it might be later in the summer before you get the sharp downside in the stock market. But the key right now is to see the gentle rollover, because if you're a stock investor and that asset suddenly trims 20 to 30 percent off your retirement account, the only thing you've been smiling about for a couple of years now. OK. And suddenly that turns doubtful. And your T-bonds aren't an alternative. Commercial real estate's not an alternative. What's left? OK. There's always a place to go. And it's always been monetary metals, because the Fed, we know when that stock market breaks all the data points that we're looking at that are nonsense like unemployment. If you go back in history and look at bear markets, the data points like unemployment didn't go dark until well after the top. They didn't turn dark at the top and say, oh, we got bad economy. Let's go down. Instead, you went down 20, 25 percent and suddenly unemployment sucked. OK. And the Fed panicked. So don't look at those kind of things as a sign of what the Fed will do or what reality is. Hmm. Interesting. So, I mean, if if the market keeps making new highs into that window, does that invalidate the top in process or or can new highs still be part of the trap in your work? Now, I think that what you've got to watch for right now is the potential that we've got at a top in place. But I don't think you'll get a dramatic downside because I don't expect that. I happened to catch the crash in 87. It's what caused me to get out of the brokerage business and become a research analyst, start MSA. But it had the exact same quarterly momentum structure where you look at an S&P monthly bar chart and you made highs in August, September of 1987. And, oh, it looked great. Price chart didn't even have a trend line nearby that you could plot. OK, an incredible trend line. But you looked at quarterly momentum, it had like a couple of year floor. Same level, same level, same level of hitting over and over again happened to be around the three quarter moving average. We get the same thing now. You're making new highs. Momentum's not. Yeah. And you look at the structure and you see this massive floor. It's like there's a stick of dynamite below these lows. And those that trigger levels beginning next quarter are likely to be somewhere not far below seven thousand like sixty eight hundred. We'll get very specific as we get later in the quarter. We can adjust that number. But you don't want to see that again. So if you're long the stock market, you can smile all you want. You don't want to get back below seven thousand because you're likely to step on a landmine next quarter. I was going to you kind of answered it there. I was going to ask you, what should investors kind of watch for during that positioning phase? Is it the S&P level or is it the quarterly momentum floor or the failure to hold those highs? Yeah, price is price is actually helpful here because you did have a zone of distribution where like for six months in a row, somebody said, I'm out, I'm out, I'm out, I'm out. The peaks were sixty nine hundred seven thousand. So we're a flat seal. Somebody say it gone. OK, well, usually distribution tops don't. You don't top a market with a quiet top. You have the spike that goes through it. It's when you abort back below the launchpad that that's a hint. But especially when quarterly momentum says something even more onerous, it goes back a couple of years. Yeah, well, you go through a structure of lows that get blown out. And so it's not merely price action. But I think it's right for that. And when you look inside the market, we all know this. Everybody's now mentioned this. The market's not making new highs. Yeah. Semiconductors recently helped make the market make them a new high on those sector out there is beating their chest in new highs. They might be having a rally today like the financials are. I looked at the KBE, the bank ETF, for example, up a couple of percent today. For some reason, there must be some loan bank out there because most of them are mixed. You know where it is right now? It's five percent higher in the bank index than it was in 2022. Five percent. Wow. Big deal. OK, something's wrong. OK. And the financial sector broadly looks very weak. Yeah. Not just on a price basis, but we looked like for last October. We said sell Visa and MasterCard. Punch up a chart of Visa and MasterCard since October. You'll see what I'm talking about. Something's wrong in the credit markets, guys. That's far bigger than this Iran situation, which will come and go. I mean, it's happening. It's happening in real time today. I mean, I'm looking at the markets now. S&P is down nearly two percent. The Nasdaq is off about three in the two year yield has jumped to four one six after these jobs reports. I mean, is this the kind of good news becomes bad news action you expect during a topping process? Yeah, I think so. But again, I don't expect a crash event type of that sharp until we get into the next quarter. I think what you might see now is you could see a drop back below 7000. But again, dimension wise, that's like eight, 10 percent. You know, not even that. That's not even correction territory. So that's the subtle thing I'm looking for is a one, the breakthrough, the distribution zone to the fizzles out. Then it slowly slips back down based on whatever you want to assign the causal factor. But you get back down under 7000 during next quarter. You don't want to be there. That's that's when the floor could start to come out from under you. And that's when, again, where's the money going to go? Yeah, yeah. Well, that's what I was going to say. I mean, if stocks bounce again, say next quarter and investors treat this as another buy the dip moment. I mean, does that delay your rotation into metals? I don't think they bounce. You don't go back to that structure again. So if you get down under that 7000 next quarter, you're not going to bounce. You're in deaths. You're a death's door. The bridge on the River Kwai. The fuse is burning. OK, underneath the bridge. And the key signal would be to simply wobble off and get yourself back down into what the price guys would think as well. You know, pull back to 7000. That ought to be support. You get back under it. That'll concern a few of them. Because, you know, you're back below that launch point. But momentum is screaming. You've got a multiyear floor. You're going to blow out. You don't break that and go down for a week. OK, you break that and go down for a couple of years. So, again, we're looking for a stock market top. But the main factor here, again, is the debt market. Not that what semis do. They had a blow off, I think. That's what it was. NVIDIA is already looking weak to us. We break in certain key numbers right now on it that indicated provide a negative force, not a collapse. Again, I'm thinking next quarter before you get the collapse effect. Right now, the issue is merely to ooze without headlines, maybe even good headlines. That's the best way to top. Like the Iran thing goes away. Oh, the market should explode, right? Well, why isn't it? Or Russia, Ukraine thing sort of goes away because Putin finds himself in some, you know, political instability in his own country. And therefore that mellows away and suddenly you have a beautiful world. OK, stock markets should explode, right? OK, well, if it starts to ooze, beware. And again, I think the prime beneficiary will be gold because I know what the Fed's going to do, right? When the government bond market goes lower, the higher yields, when certain private credit problems pop up here and there, one here, one there, what takes is a headline or two. And then suddenly the Fed underneath the surface, while they won't be talking about it, will be doing something. Print, print, print. It's interesting talking about the metals on that front. And I got to ask you, because I mean, the next question comes straight from our audience. Obviously, a lot of our viewers hold physical metals and they constantly ask about the disconnect between the paper markets and the physical reality. I mean, you and I just brought up Comex briefly, but just for any newcomers or just to put some context, I mean, a large share of the price discovery happens in the futures market like Comex. And that's kind of where, you know, I'm going today. If the paper market still sets a price, what is the exact kind of mechanism that takes silver to three hundred dollars? And I guess one point. Yeah. Yeah. I know there's a difference between like the Shanghai price or a price. You know, of course, or they look at the commitment of traders and look at open interest and all these things. These are variables that will here and there echo the positives, but they're not necessarily good timing mechanisms. And ultimately, if you see a difference between the paper price and the bullion price, you know, they're both going to go up. OK, I don't know. We're not going to argue about the difference between them. But basically, whatever that difference could shift, the spread relation could shift, contract, widen, whatever. That's really not the fundamental driving it. The fundamental driving it, again, is the historic underpricing of silver relative to gold, underpricing of silver relative to copper, underpricing relative to money supply. And silver is in a tantrum. And yes, gold is the mama. But right now, technically speaking, as of last November, we gave our last bicycle $56 silver on the close of that month. It was based on silver breaking through a 10 year wide ceiling of resistance on its relationship to gold. But we divide silver into gold, one ounce into one ounce, express it as a percent, plot that each month. We go back decades. But for 10 years, there had been a ceiling on this spread. Very low relative valuation levels for silver. We broke through in November and we have not given it back. By the way, that spread is still well above the breakout. It said now is time to buy silver rather than gold. And I think that will be ongoing, especially for the next handful of months where silver will vastly outpace gold. And we'll outpace the gold miners as well. I want to get into mining with you, Michael, while we have time. Just before I do, I just got to I mean, I wouldn't be a journalist if I didn't bring up the counter. I mean, even the bullish banks forecast are kind of miles below your targets. I think Consumer Bank or Commerce Bank put out a note this week targeting $80 silver by year end. Just a question. What would well, what are conventional Wall Street models kind of missing that your momentum charts aren't picking up? And is there anything that breaks your thesis? I frankly don't read those things. Yeah, I do know that. For example, you know, as I said, gold has eightfold moves. So if you go eightfold, you're eighty five hundred. OK. Well, JP Morgan several months ago came out with a report and I didn't even read the details of it. I'm sure it was fundamentally based. They said they thought that gold could be ninety two hundred. I forgot where they put it. Ultimately, you know, that kind of thing. And a lot of these banks that have these monthly reports on gold, they always seem to be shifted them up, but it's always by 100 bucks, 200 bucks. None of them have the horizon that something dramatic is going on here. This is we're not going to you're not going to tick your way up for years. Yes, you've done that to this point. Silver did that just to get back to 50 again. OK. But when you enter that phase late in a bull trend where suddenly reality hits, the fundamentals start to cascade like a T-bond crisis stock market. Oh, my gosh, it's not making me money anymore. All these factors come into play. Then suddenly the money rushes. And yes, there's a motion and there'll be a lot of headlines, but it won't be those headlines that cause it. It'll merely be those headlines and seeming data points that merely reflect what's already been going on. Yeah. So is there anything I mean, what breaks the thesis? Not a normal pullback, not a stop run, not volatility. But what what what specific silver signal would tell you I'm wrong? Actually, even if the bears get what they think, which is orthodox nonsense, meaning what they usually do is they like they've done this repeatedly on gold for the last couple of years. Every time gold makes a range and breaks out and you surge, they always expect it to go back and sit on top of the prior range. And it never does. It may pull back, but it doesn't go back to where they think it'll go. Right now, there's a big consensus out there for months now. Again, OK, it's five, six months of selling. Let's see it, guys. Don't go back into the 70s again. OK, a 50, $55 silver. They wanted to go back and sit on top of the old highs. A kosher price chart thing. In these tantrum moves, that doesn't happen. You're going to get a sharp drop in silver at some point, but it'll be in a new reality. And I still think that reality is three to five hundred dollars. And the move to get there will be very dramatic in the final three months of that move. You've done this a long time, Michael. This year surprised you. I mean, it's been interesting to watch. We covered this, obviously, price action a lot. And what a what a market. Yeah. You mean in the silver market? Yeah. Yeah. No, the range is a little longer than I expected. But on the other hand, it's that age factor now enters. Yeah. In other words, you've had three months of selling. Then you've had four months. Then you even had a drop that took out the fab low and it went nowhere. And now it's six months into the selling in your career, trading either side of 70 for the last couple of months with a low at 61. OK, prove it to me. You had you spent six months of trying to bomb this market and you can't seem to get it going. And I think the clock says you better do it like right now. Don't uptick again because you uptick back into the mid 70s again. Forget it. You lost. Highly likely we're coming out of here. So I'm doubtful you'll see those levels that everybody expects. And I think these other factors that seem to be in sync with the silver, like a weak stock market, they're so, so silver, et cetera, that's going to suddenly divorce. Hey, I got to ask about miners quickly before I let you go. I mean, you've called them, you know, the leverage play on a leverage play. Two references quickly for our audience. So I don't lose anyone. The XAU is obviously gold and silver miners index dating back, I think, to the 80s. And then, you know, the GDX is a large miners ETF. Most investors hold at least younger ones. Now, you watch the spread between the miners and gold for kind of a breakout signal. Where is that spread sitting right now? What's the exact level? About 8% right now, XAU divided into gold. OK, now, when you go back to the 70s, 80s, excuse me, 86, it started XAU, 80s, 90s, 2000, 2005 until 2008. That spread relationship divide the price of XAU into an ounce of gold was about 25%. It had highs at 35. It had lows at 17 and a half. A nice box of up-down action for decades of valuation of the miners going sideways, really, oscillations versus an ounce of gold. It dropped to 4% at the bear market low in 2015. But gold hit its price low and miners hit their price low. The spread hit a low at 4%. I mean, what do you want? It's going to zero, OK? You know, you want gold, well, you got to have miners, OK? Anyway, since then, you've built a range of basing action on the spread chart with repeated peaks up in the above 8%, like 8 and a half percent. In fact, we went up and nipped that out marginally a few months ago at XAU versus gold, so it sort of broke out. But GDX did not. Instead, GDX still has this range, going back 11 years now, where you could draw a line across the spread chart, very low valuation levels that you need to break through. And it won't take a lot to get that spread to break out. I think it's going to break out because this time, we're hanging in there near the upper end of the range, whereas prior run-ups there failed quickly. In other words, you got gold miners relative to gold, and then they puked, OK? This time, we're congested up there, like we want to go through. If you break those miners out versus gold on a spread basis, they're likely to double or triple in relative value to an ounce of gold. In other words, go back at least to the bottom end of what had been a multi-decade prior range evaluation compared to current levels of like a double to a triple. So I think there's a major surge there in the miners tending. In other words, we think you've had one already, but you break that spread out, and you're about the lid's going to come off the miners. Now, what would that mean? Maybe that means investors wake up. That's what a lot of boardrooms are looking for, especially on the retail side. So I mean, miners are kind of the confirmation layer. You've been advising specific names based on relative performance rather than corporate balance sheets, mainly because earnings get wild when the metal moves fast, as we've seen. Earnings are nonsense. One day, the next day. So I mean, for the everyday investor watching this, is the practical move then just to own the broader ETFs like GDX? That's one way, yes. If you don't want to, I really think it's a casual statement. I think if you throw a dart at a list of miners, and you probably hit mass, all of them are going to go up pretty much dramatically. In fact, you can look at Newmont, which is the biggest gold miner out there. Of course, we know it's the blue chip. That's where the big funds would buy. They would buy the juniors or anything like that. And you look at its chart, it looks like, oh, wow, what a move. It's only been a par performer to GDX. In other words, it's only matched the performance in the broad sector. It hasn't even outperformed and yet the stock has gone vertical, which tells you something about the sector. In other words, people are like, what we're looking for are the symbols that have technical breakouts relative to the sector. But without going into that, trying to microscope within the sector, and those valuations can change. You might have a miner that beats the sector for a year and then underperforms. It doesn't necessarily have to outperform the whole time. But basically, I think you could throw a dart. And if I threw the dart, I'd throw it to silver miners. I think they're going to do better than the gold miners. A lot of people excited to hear that today. Okay, quickly here at the end, and I can't skip over this part because it's important. I went to X and everyone wants to know, you know, they hear these forecasts, they go, okay, well, what the hell happens after the move? And what's the exit? So, I mean, if silver does hit that $300 to $500 range, does your work suggest it holds there in a new structural reality? Or are we looking at that peak? I think we're headed for a monetary, economic, global, and political crisis. And the economics, especially once the market, the bubble markets break, particularly ours in Japan, are two definably bubble markets. Europe is not so much a bubble as we are in terms of dimensionality of what's occurred over the last 16 years. China, for example, will go down with us, but it's not a bubble market. It's only doubled in a half since 2009. We're 22-fold on NASDAQ or something. And when the U.S. market breaks, that's going to change a lot of the dynamics. And that's when these events will start to happen. I think what's going to be on the other side of that silver explosion and gold explosion is legalization of them as currency. This country, that country, this country. Now, the Western world will be the laggard this time around. We've had monetary backing in our money before. You know, you go back 100 years, you had gold and silver-backed currencies a lot of places. Now we've had nearly a decade of fiat paper. Which piece of paper is degrading more rapidly than the other in terms of real buying power? It's when the public realizes that and they get hurt by the consequences of that fiat game, there's going to be an intellectual awareness among the academicians too, including academicians who favored the Fed up to this point will say, maybe we need to get some gold backing, we need to leave fiat currencies behind. So you may have a new reality on the next move, not just, oh, a new high and then big pullback, etc. You may reach a new global perception of what's money. But I mean, and on that point, because it is an interesting one, getting out at the right time, I mean, is there a specific kind of metric that you'd watch to know when a momentum trade is finally exhausted, it's time to hit the exit? Yeah, we will cover that. But again, what I'm thinking, yes, silver is likely to hit a high and have a sharp, you could drop 100, 200 bucks, you get a 500. But you're in a new reality at that point. And I think the first issue is to get to the new reality. Now, admittedly, when you get there, my own personal strategy is this, about 95% of my positions are silver bullion, unleveraged, usually through ETFs or bullion, and silver miners, 50-50 on those two. But 95% of my portfolios consist of that. Once I get the silver move to the new reality, I will probably take profits. But not because I think they're going into some disastrous bear mode. There'll be a sharp sell-off, there's no question. But it won't be back to 100 or 50, who knows where it'll be. But the issue is getting up there first. I'm gonna shift it into cash. Well, what's cash? Gold. Gold's the money that's held its value over the decades and decades. Stock market hasn't held its value. Hardly any asset in the world has held its value measured against the degradation in the real buy. When your granddad built a house, it was $4,500. When your dad built one, it was 45,000. You want a median home today, it's 450,000. And that tells you degradation in the money unit. It's ongoing. It shows itself here and there. With gold, it's been perfectly safe. That's where I want to be once we get this surge over with. But right now, the issue is to capture the surge. Sounds like central banks are pre-running your move here, Michael. All right, well, listen. Michael Oliver, founder of Momentum Structural Analysis. Right to early or too aggressive. I mean, that is one of the clearest cases you'll hear for silver leading gold in this cycle. But Michael, thanks for your time and your insights today. Pretty fascinating stuff. Good to be here. And listen, if we do get one of those tops, or if we do watch this, come back on this show. We'll get you on here right away. Thanks, Michael. Absolutely. Thanks, Michael. Appreciate your time. Thank you. All right. If you like this kind of analysis, hard data, looking at both sides of the trade, hit subscribe. Turn on notifications so you don't miss the next one. And let me know in the comments. Are you buying the $300 to $500 call on this timeline? I read them. I'm Gerry Salvin for all of us here. Thank you for watching Kidco News. We'll see you next time.