Gold And Solar Cycles




I will use this solar cycle chart many times as it is updated more frequently. The black dots are the end of the month points, which makes the entire last rally during the month of May.  All the patterns you see are very similar to Elliott Wave patterns with one big difference. The difference is that the solar cycle goes up and it always comes down to zero again.  They say it is an 11 year cycle, but bottom to bottom can be anywhere up to 13-14 years long. 1996 to late 2008  was about 12-13 years, and if we use another 13 years, the next low could be close to 2021. Another way to look at it, is that the sun has a heartbeat of 9 beats every 100 years. 

The chart above only points to about 2020 as our next bottom, but we have to be open that it can to be a year or so out. When the new solar cycle starts then we should look for the polarity of the new sunspots to switch.

Going back up to the 2000 peak, we had several key asset classes (gold and Oil) that were pointing south, while stocks were pointing north with the dot com bubble. The 1980 peak in gold also matches the solar cycle, but then it was gold pointing up and stocks pointing down. In 1980 the solar cycle repelled the price of gold, as the markets started their big bullish run to the bubble top in 2000. 

I have labelled a few peaks and valleys, where some extreme turnings took place with gold, oil and stocks. I like to say that the solar cycle repels or attracts the price of gold in an alternating fashion. In 2000 the solar cycle started to reverse and started to push or pull the price of gold up, and of course stocks proceeded to implode.  The next 2007 peak for stocks ended well down the solar cycle, as stocks crashed during the solar cycle bottom  in late 2008. 

Gold hit its peak in 2011 right along with the first big solar spike, stocks were facing down at that time, but then they started a stock mania run that lasted until 2015, for now.  With a  bunch of wild corrections thrown in to confuse all of us wave counters, as we were chasing this elusive wave 2 up in Primary degree.  It should have only lasted a year at best, but the stock market kept on soaring.   Sure, it’s easy to see this in hindsight, but on the flip side wouldn’t the past be the place to look how the cycles can repeat. The up phase of a solar cycle reverberates through the entire economy as it affects everything. 

In general, solar cycles go up much faster than they ever come down, which can divide into the Fibonacial time ratio of (.382 years up to, .618 years down) Solar cycle #24 above, is one of the smallest on record with double peaks. Usually they have the secondary peak travel lower, but in this cycle the secondary peak traveled higher.  Even now there is very little sunspot activity as I only saw 2 the last time I looked.

That secondary peak was one of the best looking inverted flats that I have ever encountered, complete with an ending diagonal on its tip.  It wasn’t rocket or solar science, but I knew the last solar cycle peak had already completed.

The big thing to stress is that we should never ignore or be oblivious to the solar cycles, especially if you have any Elliott Wave knowledge. 

The last thing you want,  is to have a bearish stock wave count,  when the next solar cycle reverses. If by chance the DOW ever hit 6000 or 5999 and we are still being brainwashed by stories of  the DOW  going to 1000 or even DOW 400,  then I will say now that your bearish wave count is going to get busted. Besides, you will have no time to mentally prepare for the next big bull market, and you will be left behind holding a bag of wooden nickels.