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Stocks This Week: Buy The Gold ETFs

The stock market is likely to fall on Monday but recover later in the week. Gold is the more exciting story.

Below, we see the monthly seasonality of gold. Note that the metal price has entered the bullish phase of the year. From August 7th through October 11th, price has risen 64% of the time for an average 3.5% gain.

This analysis is based only upon the annual cycle of the year. We must analyze all other operative cycles.

Chart 2 shows the sum of the most profitable monthly cycles. Note that this rhythm bottoms in the coming week. Seven of eight buy signals in the last year have been profitable. If this cycle is rising, the odds of the seasonal numbers are at least 10% higher on average. A 61.8% retracement of the 2020 rally has been completed. The rally is likely to run into yearend.

Chart 3 shows that the rally has already begun. The $1805-$1810 area is the next target. The 24th-27th is the next likely short-term high.

Chart 1: Gold Monthly Histogram 

Blue: Average Percentage Change

Red: Probability of a rise on that day

Green: Expected Return (Product of the first 2)

Chart 2: Gold Monthly Cycle

Chart 3: Gold Daily Graph

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