Looking Forward (and Glancing Behind While Doing So)

Last year on 29th September I made a blog post entitled Gold & Politics & Being a Tracker.

In it I looked at many cycles that are present in the price of gold, and compared some of them with the length of tenure of different political groupings, like Presidents, Congressional tenure, and so on. I used cycle finding software to produce the charts which supported the blog essay. But usually I don't use such an approach for trading as it is more general rather than detailed in it's conclusions. But we all live in hope, so how did those charts work out now we are 7 1/2 months further on in the passage of time?

So I thought that this might be a good time to look back and review.

Here is the final chart from that post in 2013:

So what does this look like now? Was that post a prescient forecast to be proud of, or was it a howler to forget as soon as possible, and skulk away into the shadows until the hue and cry fades?

Well, sort of middling I would say.

Here is the up to date gold price chart, laid on top of the above chart from September 2013:

I hope that readers can, with the help of this review, make more informed judgments of the usefulness, and error proneness, of this kind of approach.

My comment is that the second low, the low at end of 2013, was lower than predicted, and therefore the forecast was/is too bullish. The next low can reasonably be expected to be lower than the prediction too. That suggests that the underlying longer term cycles, or long term trend is still down, or sideways and while is may be bottoming now, it has not yet been observed to have done so.

The shorter term swings turned out fairly well. But watch out, the lows rising like that looks too bullish. Timing of the lows so far was good.

The usual futures trading disclaimer contains a clause to the effect that past performance is no indicator of future performance, and there is truth in that. Good approaches come and then fade away. But the entire investment industry uses methods based upon past success to go forwards into the unknown future, and this is how the learning process works, past experience hopefully gives some insight. Anyway financial cycles are deeply tied up in this matter obviously, so all the usual disclaimers have a wisdom in their application.

I remind readers that every single cycle found by automated methods, I had adjusted and "changed" using my own knowledge so as to better match reality. I don't advise relying blindly on these cycle software algorithms without having some background ways to detect their weaknesses and reduce their effect upon results. That's not saying they are useless, because as can be seen above, they have great utility up to a point.

Good luck with your trades

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

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