Transcription
And that will bring a knock-on effect of the stagflation that you had of the 70s. Welcome back to Metals and Miners. I'm your host, Gary Bow. Today we're exploring the intersection of markets, precious metals and miners, and technical analysis with Francis Hunt, master technical trader and founder of the IVF method. Francis, it's always an honor to have you back on Metals and Miners. Welcome to the show.
>> Uh delighted to be back with you. And just just for those listening on that introduction, it's HVF for hunt volatility funnel, but don't worry about that. I am so sorry.
>> If as long as it's something good you're putting in those veins, Gary, I'll sign up for it as well.
>> Okay. All right, Francis, I apologize. All right, Francis, you've been a successful technical analyst, trader, and investor in the markets for many, many years. We're in a time of max uncertainty for the markets due to the Iran war and so many other macro uh factors. Many tune in to your work to hunt for insights in the markets to help keep them on the right side with their investments. We've got a lot to discuss, but before we do, what do you hope for those tuning into this conversation today that they're going to walk away with after listening to it?
The the one thing I find when you involve a chart is that uh anything that is said um is backed. Uh so people get hunches, they have vibes, uh and then they hang on to a viewpoint long after it sell by date. Um flipping or flopping or adjusting is natural and is good. uh someone who's belligerent and sticks to his guns, which sounds like courage in any normal warfare situation, is not always the best trader. So I'm hoping for people that they will be able to balance future forecasting as a multiple span of possibilities for which I'm going to highlight a few so that you can best position for this time whilst maintaining a multiple potential outcome given a number of seasonalities that are coming up of which we'll delve deeper but just so that it's not hanging there a Fed change the sell in May seasonality and the wild unsustainable able spike in tech that looks like short covering for people who got it wrong this time were they just early uh going into the May season. So let me leave it there. How do you play those uh those variables to best position? And that's what I'd like people to get some real benefit from.
>> Outstanding. All right. So before we jump into the charts, the Dow is now a shade under 50,000. S&P is over 7100 at record highs. The VIX is around 19. The 10-year yield is around 4.3 and gold and oil have largely been rangebound for many many weeks. Rises, falls, rises, falls. So they're largely rangebound. The markets refuse to crash despite the call by many analysts. What's your takeaway of this entire market setup you're seeing?
So the one thing that's tough for calling shortaging shorting of indices is that you're also in a fiat debasement environment. So we are in a world of monkey money unfortunately Gary uh and I think no one knows that better than probably yourself uh and many of your viewers too. So in on that basis you have to recognize that there already is a process of devaluation in inherently built in that if you're in the US stock market it's a dollar and if you're in you know Britain it's a pound and in Euroland it's a it's a euro and they're all lepers from the same leper colony where there's varying degrees uh of illness let's just call it that. Uh so it's hard to get a short uh accurate if particularly in a fiat and debt debasement environment which is where we are at right now. So that's the short response.
>> Okay. All right. So the biggest question on most investors minds right now is has the Iran war caused enough damage to energy infrastructure around the Middle East to create a liquidity issue that's going to cause some type of waterfall selloff in the markets and then major global recession that's going to be happening soon. What are you seeing in the S&P the Dow with regards to this? If you want to share your screen here that would be great.
>> Yes. So you've asked specifically about stock markets but you've referred to the hallm events. Um so what my primary frame framing for the hall moves events is that this is going to be bringing about the stagflation that the larger control structures need. So rather than just tying it to um one particular asset class. So when you talk of asset classes and you mention you know the stock market or the housing market, I think of this cascade of champagne glasses that is built with one right at the very top and the continual pouring of champagne which is liquidity, the fiat and debt based issuance and every layer is a different asset class. Right near the top, one of the top layers is the stock markets. Uh, which would include the stock markets you mentioned, the Dow, the NASDAQ, but other layers are below that. For example, the American housing market will be a layer as well. It's also getting filled with juice. The key bubble in everything is a fiat and debt bubble. They keep pouring into the top glass. You get cascading down. So, that's why everybody thinks we're in an everything bubble. We're not in an everything uh bubble. All that's happened is you have excess liquidity, fiat and debt creation. That means that everything that is an perceived asset, even some things that aren't, such as, you know, cars, we're getting into these extreme that, you know, we've got a lot of battery cars, certain last ranges of Ferrari V8s are doubling in price because they don't have batteries in it. This is all signs of excess liquidity. The last time I don't know if you remember the McLaren F1 came out, the Jaguar XJ220, they all came out at a at the top of a a very strong 80s bubble. You tend to get money finding its way in everything. Everyone talking about wine being collectible, Persian rug. So the alternative assets category starts to get more known. People start to be smart. Uh, all of this is happening. So whole muse for me is to bring the stagflation in much the way that OPEC so I will parallel rather differently at a this is a fundamental discussion not a technical one yet that hormuz is the OPEC of the 70s in other words it's there to bring the stagflation that means in spite of this whatever ends up transpiring here the costs for everything will be higher and they will not even retrace with whatever messy resolution that takes a long time to finally evolve. I think ships will still continue to pass, but I think the insurance will be higher. I think the costs of the shipping will be higher as part of the insurance and other things, higher rings, even if the risk isn't really significantly higher. I'm not hearing a great deal of oil tankers being sunk and oil being dropped into the ocean. It's not happening. But it's an opportunity to squeeze the consumers and it's going to be a maximization of uh wealth for the shipping magnets, the oil magnets and those that do clearance, transport and all related activities and that will bring a knock-on effect of the stagflation that you had of the 70s that OPEC itself was part of in the 70s. So, Hormuz is the OPEC of 2020 of the 2020s. Um, that's the short answer just on the fundamental. If you want to go to take me into the indices, I'd rather hand back and let you ask that.
>> You Well, I do want to ask you this because it's interesting as you painted the picture of the champagne glasses stacked up and it falling down. You know, I just did a study and put it up on the Substack the other day about how the Fed is actually their balance sheet has increased by over 170 billion since January 1 of this year. Even though, you know, we're supposed to be in a flat environment, no recession, etc. That's a 7.5% increase run rate on their balance sheet. Over 550 billion for the year if they keep up that pace. that's a tremendous amount of liquidity or bubbles that they're pouring down uh that's going to find its way somewhere, right? So that I guess what you're saying is with that kind of environment where the bubbles are are filtering down, it's really hard to get a waterfall selloff. Um, but that doesn't mean that you're necessarily not experiencing debasement or devaluation in some way.
>> And that's why we use the gold ounce as a unit of accounts. Now while gold is going down currently on a third selling off leg um if you have a look at the bigger time frames the NASDAQ is actually underperforming. So the last few weeks and even month belong to the NASDAQ but let's refer to the chart and just say why I make a case for everybody to utilize the gold ounce as your basis of unit of account. That's the gold silver ratio by the way. Let's leave that. I just thought I'd highlight we're having a real push on Brent um to a level that's uh that and this is antagonistic at the moment to gold to levels where previously you've been rejected. This is around on the Brent. It's not as familiar to uh US folks but you've got to bear in mind Europe, Britain all rely specifically on this version of oil more than any of the others and quite a few other nations. So, we are getting into that uh area where you're being resisted and this is antagonistic for silver. You'll note my alerts just shooting as silver sells off and gold is selling off at the moment. So, you have this antagonism. There's gold saying me too. Sorry, the beeps are going off in the background. This is live and we have real markets and we're watching. So, you can see the damage that the sending oil is doing. But the what I was saying that brought us to the charts that I want to finish making the point of that deals with the question you've asked. Why should you utilize gold as a unit of account even whilst we're experiencing this? If I take the IXIC which is the NASDAQ comp and I divide it by gold and I will be showing you uh why in the longer run despite current movements which are in the exact opposite direction of course you've had the NASDAQ strongly up. If we go to the bigger time frames and have a look at this, technically we are in a correcting. In fact, let's go monthly and make this a big chart. We are actually in a correction. Um, this is a rounding out uh correction. As snappy as we are being right now, you are in a head and shoulder here. This is a interesting M head. We call it an M head, but that's your head. And then this is your shoulder. That is 6.57. That is the top of the right shoulder of a left shoulder, head and right shoulder whilst you are snapping back right now until that 6.57 is run and that cancels. So you always should have a level that you accept you're wrong. We don't marry opinions. This is what I love about charting. Um, we we're we say at there's a point where we accept this is no longer a reversal. And you will see that at 6.57 that's the case. Right now we're at 5.44. 44. What that means, 5.44 gold ounces buys you one basket of the NASDAQ comp. And you're seeing that right now. It's quite strong. We're in the month and we're almost finished this month. But it's also quite important what happens next. This neckline that we called it the 465 has previously been support, but each time the support has been less uh it was initially resistance. You'll even see it there. It took a while when the NASDAQ was going up for it to beat. So these periods here have been, let me change color otherwise I'll confuse everybody. These periods on the upside are when it's been better to be in tech stocks than gold. From 1999 into 2011, you were better served being in gold than in tech stocks. So this is quite a simple chart and what we're saying is you're never getting to the highs of 99 and in fact you're currently reversing and this current two months is going to be negated again to the downside. What if it isn't? Well, you run that level and we say okay that's not a reversal then. Um, so there's a level where we accept we're wrong and that's at the 6.57 O uh for the NASDAQ. By the way, this gets even more dominant a pattern in gold's favor. The NASDAQ has shot up a lot when you involve, you mentioned the Dow for example and the S&P uh which are more generic uh stock indices that will also have you know non- tech in there. If we do it like that, you will see that you are already correcting tremendously and this has turned down and this is just a rally in something that has already clearly reversed. So even if we said there was a key level there, you're a long long way from getting back up there, there would have been your head. This was quite a big right shoulder. But even still the Dow whilst it's rallying now after meeting a key level at 8.75 it has got a long way to go to negate this pattern and I don't see it happening. So actually the strongest stock market is the NASDAQ. It might have not have made many people feel convinced that I'm safe but you are just facing two months of rally. This chart is worth taking um and I don't want to go any longer than uh what I've done, but it's worth taking to a 12-month period just to remind everybody what it is. So, let me just fix the framing of this. Uh, it is such an important chart that I I like to get out quite regularly. Uh, and if you'll allow me just to sort it out, I'll put it on the six month. We'll get that framing and scaling correct. This is the history since the Fed's creation of the Dow in gold ounces. Uh, and whilst I read this, you can see the different errors that have been in existence. Prefed, you had these two red lines quite in in a steady range. That was around 2.88 2.5 to the high side around five. So at about 2.5 oz um to about 5 oz was typical and you're in that range. The creation of the Fed came in and around here and the mischief started and then you shot up to 18 where five used to be the high 18 gold ounces to buy you the S&P which subsequently ended at 1.88 in 1929 30 going into the depression years. Then you had the the 28.47 47. That was the up into the 60s, the go- go eras all the way through the world war, the that all that went the manufacturing, the military-industrial complex that went up to 28.47 only to crash below one in the late 60s as we went right the way through into 1980, the high for gold. Finally, we then had 45. This was.com uh peak of stock market valuation to gold and we are since then being we are fulfilling a downside correction to a much larger super macro broadening structure of pump and dump schemes that the 1913 Fed creation has brought about. And I want to highlight to you in this down leg here, you had a down, you had a bounce and a rally, and then you made the final low because the broadening is getting further and further apart. It becomes more common that you have an an inter interim period of rally and then further downside. We may have two in this cycle to get to the low, but we are predicting when gold is finished, the Dow will be purchased for 0.66 gold ounces, a basket full. So you are in this reassertion reversal. Let me hand back to you because that was quite a lot to consume.
>> That was a lot to consume. But that was really good analysis and that chart is fantastic. And um, you know I guess I guess my takeaway from the chart you just shared is while there's es and flows in the market in the short term and short term could be days, weeks, even months. um over the long term when you zoom out you could see much bigger patterns at play and when it comes to gold going you know one to one or in this case what you're saying is less than one one um that's in play over the coming years and so you know don't have 100% of your portfolio in any one thing but sometimes you have to sit tight to be right.
>> 100% and if you play the long game. Play the long trend that goes with it. Match your time frame to that which you're trading. And I personally like to trade with the wind in my sales, not into a headwind. So overall during this period, despite two months of relative rally in the NASDAQ, this is but the a bit of of a rally in the eventual winning for the champion which is gold period. By the way, there comes a point. So some people say, you know, gold bugs, we're all gold bugs because we're talking about gold a long time and then it becomes a belief system and then it becomes a cult much like I think Bitcoin maximalists are. There's a gold hits 0.66 and it buys the Dow. It's a time to get into the stock market then and to let go of some of that gold. So I have levels where I'm not married 100% to gold. I think you should always retain some as part of a macro portfolio, but I will certain I'm chronically overweight at the moment and I will definitely go to much more normalized waitings or even underweight at a point of that because markets will still overreact just like at $800 in 1980 was a great sell uh and then being part of the financialization era of stock markets. Um, so we're not permeables. Uh,
>> but we're significantly far away
>> to seem that way because we keep talking optimistically until the big picture has played out.
>> Yeah. And we're in the middle of that now and or maybe even less than the middle of it right now. And so we're still quite a ways away from getting to that end point um of the cycle turn for gold. So it makes sense that you're positive, but there to your point there will come a time when it has been exhausted and the move has been exhausted and it is time for a different asset class. But I to me based on your chart and and you know my research we're still quite a ways away. But let me ask you this. What is the catalyst for the next explosion higher for silver and what's your approximate time frame? If you want to share your charts that would be fine.
>> Yes, certainly. And I'll do the exact same as I've done now. So I have two scenarios. It's important not to overcommit to any one thing too soon. There is a gold silver ratio setup that causes me some concern about being too aggressive right now. And this is what we're looking at. So currently we're at the 63 uh gold silver ratio uh level. Now, you might notice also that there's a 65.5 blue line that's driven through there. And I'm going to take you to a higher time frame to explain where that line comes from because there's not excessive amount of stuff on this chart, but there is that blue line looming what's behind it all. So, uh I'll just remove the volume by price for a second and just illustrate. We have in our methodology something we call key levels of significance. And this 65 level is a key level of significance. And you might say, well, why is that? Uh, and I'll answer that. Um, you can see that you were resisted in the relative valuations of silver and gold in and around the 65 to 67.5 area. I always expect a key level to just be run and then a reaction. Just rerun then a reaction. And then we went very low vol and we broke above. What then happened is you came back down only this time you were supported up there and you went away. You had an extreme event where gold was deeply devalued. That was the CV19 spill that was very destructive to silver. And you had a big dip down. And where did you get defended? Even though you ran on a spike quite a bit below 65, it's the 65 that got defended. Then we were in a holding box for quite an extended period. It was quite a a boring error for the gold silver move and we actually popped out the top before we eventually broke out the bottom. At this point, we were calling the gold bull is definitely here. this box running and we said we expect the key level of significance of 65.5 to fail and for gold and silver to continue to make very strong upside moves. Then we got our call it our it's not even halfime but I know in you have football you have quarters so first quarter break um on the grid iron and we got this rally up to here. Now I am looking at that and I'm taking you back down to that rally. So you now have the virtual context of what is looking here. Now remember a gold silver ratio upside move is actually bearish probably and especially bearish for silver. Your question was Francis what does silver do next? And I I'm saying to you there is an eitherway move here. But my bias is we could actually have an upside move here which could mean in a further extension sell off on gold and silver particularly with silver being higher beta being worse served. And this gives a target around 79 to 80s level. So you could have a rally back above the 65 during a demand destroying event. This brings me to what I mentioned in the beginning of our interview. Sell in May and go away. Go away till St. Lee's day, which is the pretty much for most people who don't know St. Leia's day, it's the September period. It's shut shut up shop for summer basically. Um, is coming. Then we have a new Fed chair. There's often been crashes and corrective dramas. So Greenspan took over from Fulker in 1987. You might remember 1987 as a major crash year. This is a bit of a a tendency. Um, and then Mr. Bernani inherited quite a bit of Greenspan's wos um when Greenspan stood down and there was each time quite a bit of contagion. Fed chairs are almost more important than presidential seats. I would say that they certainly are for uh as indicators for possible triumph. So we have Powell standing down. and I believe it's his last speech today in fact and that you'll now be dealing with Walsh going forward. So I do see a little bit of a concern coming. It's not immediate but this could happen and then we could break upside and that's could see further downside. However, if this breaks down we'll be back on um the bull train. So bear in mind it's hasn't shown its hand yet. I have a slight bull bias here that concerns me for gold and silver. Let's look at the charts itself now. Um, if you're ready. But before I just jump in and carry on, let me hand back to you. Is there anything you want to jump in or do you want to redirect redirect it in any way?
>> No, no, no. Keep going.
>> So, if I continue as I will uh XUSD and uh bring you to Owanda and show you this is a little bit on the super macro time frames. Uh, a shooting star for now. This incorporates the big blowoff and now the sell-off. Typically in candlestick charting that points to the next period could be bearish. 6 months only ends in June, however, not in uh not in the end of April, but it's a slight warning. We would ideally like to see that warm up a bit and come back. If we have a look at the one month, you can still see a big uh a big candle bought back up and now trading lower. Little bit of a caution that it might be a longer wait than we think. We warned that there's normally three big sell-offs when you have a slap in the face like this. This was a jolt. That was a big sell-off. It was a real slap in the face. You got the second selling like this and that broke that grind line. So the first time everybody just seized it as an opportunity to come up under the gold market and buy. There's only one way. They've heard everything, the shortages, everything came up and then there was a lot of money rushing in that got exhausted. You could see we waited and we spilled. We broke that another sell-off a new low. This was not high conviction. So there is more people hurt. Now, you can do it either as a channel or you could have actually done it as a slight arising wedge, which might be marginally more accurate. So, I'll just drop that to maybe a a 12-hour just to get a bit more detail to show you that. But what we have got now is we've got a head and shoulder. Sometimes the dollar is part of the story, Gary. And what we like to do is we have a look at the other currencies. And for example, if I show you the Forex.com, you have a very clean head and shoulder here on this rally. And we were expecting a second sell-off where a lot of people were calling, "No, you should already be long." And that exhausts the the precious metals community because they go in and then they get sold off again. It feels awful. They're going, you know, they buy and then they they watch the market trade down. Um, I can even take it to the 4hourly there. And you can see we've got a downside target for the gold against the euro that's replicated against the frank. I like to look at it against the frank which is a semi-serious fiat. Not a brilliant one but the least bad probably. And you'll see you have similar structure there. And it's also got a target to the downside that is needed more more downside to occur. So gold is still correcting a little bit on its third selloff uh from the localized high. However, the volume and the thickness of these candles, you'll note my candles are varying sizes. You made a very good point about the the short squeeze on the tech stocks. There wasn't huge volume driving it higher you mentioned. And you can see here this isn't as higher volume on the downside or as uh steeper decline. So, if we just show you these uh candles, this was violent uh over here. So there is some dissipation, but this is pretty steady selling and I think you'll probably make that target to the downside. I'm not so convinced that you'll make a new low. I think you'll probably bottom before we have a broadening structure on gold and we have a a falling wedge on silver. So I just want to have say two scenarios.
>> Can I let me for one moment? Keep this up for a second. So, if if with your markings that you just had up, um, if it doesn't make a new low, if it's a higher low, then that's a positive. That means the low was in, I don't know, late right there. And so, then we're then we're looking at a a change. And it may be slow, you know, a slow trend change, but then we'd be looking at a at a trend change.
>> Correct. 22nd of March would be the the final low of gold. and you'll make only a a localized low and that we would see as very positive because it's currently in a bare phase. Failure to make a new low is actually quite positive. And what you also might start to get is a bit more compression because you're quite a lot lower in the high. You you you only made our splitter. You might see a very faint line there ac there's ones across the top, one's across the bottom, and there's one across the you only made the halfway mark. When you start to get a lot of compression and selling across the top and then you fail to make a new low, you actually get this descending triangle structure. What you mean is you start to get a bit of squeezing of the volatility. Here you had a massive expansion of the volatility and even though this one wasn't as violent, it had two legs to it that was in percentage terms even larger. So what we will get is the sell-offs by will becoming smaller and less violent and in percentage terms less and you'll fail to make a new low. That is the beginning of working your way up. Eventually we want to see it break that capping line, but we might see good value in getting in earlier somewhere in the after this target has been run over here and enjoy a little bit of upside. This is for traders maybe or even for long-term bluepot non-leveraged investors getting in and enjoying some of that upside up here before the possible break over there.
>> Yeah.
>> Um, so that was gold. I didn't answer your question on silver. May I bring the silver chart up for you to comment as well?
>> Okay, sure.
>> Again, I left that on Swiss Franks. I'm going to bring it to dollars uh back so that everybody can understand the numbers. Um, but you can see we are in that third sell off but not with the violence that associated what we call the slap in the face moments. These two sell offs there was a little bit of it there and then there was consistent quite high volume into the low there. We still also like you we have two scenarios. My primary scenario thinks the March 22 low is our uh low and that this is all part of you know a kind of falling wedge structure that is squeezing out and that you're going to fail to make a new low here. Um, I'm going to put it on the dollar because uh I need to bring everybody back into the room because people aren't familiar with the Swiss Frank price of silver at all. But I just highlight we use multiple cross references when we do this. We forecast this quite a while ago. So, I've got this bit of a bent banana uh thing going on here that suggested we were going to have this down leg um when we were up top here because we were in this channel. When you channel, it's a grind. That's what you're doing. We expect a three selloff leg and we had already broken out of the falling wedge and we hadn't had the third selling leg. So, we were saying, well, you are a falling wedge, but you're also getting a bit of a rounded bottom. That probably means there's still the third sell-off to come. That's now in play. Even though you're out of the falling wedge, it can be categorized as a return move once you break the falling wedge. But typically, we like to see three selloffs inside the wedge. This one's occurred outside. Hence why we do these we drew these lines showing that there's a little bit of a bend up. That too is bullish because it means the grind up took you right out of a very tightly squeezing structure. But it was a very tight squeezing structure because the the tops were coming down very very fast. So there's the falling wedge part of it that you broke out of over here. Now we took a little bit of a ride there. We didn't like the head and shoulder and we got out. Here's the head and shoulder on the lower time period that started the selling and hence we've been waiting for this third cell. Little bit of a head and shoulder in there. You can see it. It did make its target. Let's just show you the head and shoulder. Little bit of a blowoff top. There it is. And then you had a bad gap back down to the key level 78 and 6. You had that little squeeze over there that set up your right shoulder and you now ran that. And then gold broke down. So silver's now being brought down by gold. Little bit of a rising wedge coming down. So the silver in spite of what sounds very negative, you might see a line here that goes like this. There is value buyers that are tactically retreating. They came in there, they came in there, they came in there, they came in there, they came in there, they came in there, and they're coming in there. So it isn't in a spill. We call that a a basing descending grind line that shows, hey, if you're going to keep coming cheaper, we're accumulating. Can I highlight that China had record imports of silver, by the way, benefiting from this discount window, as I'd like to call it, and America has had record exports of gold to Switzerland and China over the last 5 months, which is the only reason they've not had record deficits. Let me hand back to you.
>> So, I understand that your um your your long-term projections are quite lofty. Would you I I see the short-term projections and you know there's some there's some either way this can go over the next we'll call it one to two months. Um, but what are you looking at long-term or medium-term you know for silver?
So the the the long-term our our dollar target price where we will reduce some of our stake. It's not the top call. I again I will clarify that a little bit further. You will hit a dollar based amount. I I've on a point and figure chart that I'm working on. I have a even higher dollar price. I don't want to say it just yet. I'm not want to I don't believe in the whole Max Kaiser super hyping. Um, but it is a fourdigit number. Um, but our primary target is 333. I will sell silver for gold when we get a single digit. That means we break below 10 on the gold silver ratio. Unfortunately, that's not a dollar price. So it doesn't answer your question. The place where I can give you a dollar price is I will make mention that uh the HVF um the volatility funnel that you have set up here I will draw for you. You just need to allow me a couple of seconds because I have to do one correction on it. So the high over here by data was not um was not this number that's on this particular chart of Oander. You actually traded a 50 during the Hunt Brothers and as a result uh as a result of that we need to it makes this secondary high higher than this one when in fact it wasn't that way. So we have what we call a data imperfection that I just do a a quick correction for. So that's what all this uh monkey business is around. Luckily our draw tool allows us to do that and it will allow the draw. So the target of 333 is not something we've sucked out of our uh thumb. It comes from the geometry through HVF method that had occurred. And by the way, that gave us a squeeze within a squeeze over here that saw us saying at 25.9, you've begun the big run to 333. Our methodology has interim target levels where you're likely to slow down and have what we call progress decay. Go sideways or down and make no new fresh progress to target for a period. It doesn't tell you how long that period is. We're on a very big chart. Each candle is a quarter, three months. You see it up top there. That was the highest point. We took out that piece of data to make that the highest point because of the data anomaly that I mentioned. But actually, we shouldn't. Our interim therefore should be a tiny bit higher. That there's a couple of targets at the interim level that were just inside the hundreds. We expected a pullback after silver ran the hundreds. That has occurred. It's part of the journey path before running the 330 stroke 333 adjusted level. That is the dollar target we have. Um, we expect overperformance to that. The final sellout of my investment silver will be on a singledigit gold silver ratio. a point and figure target that will give you more of a dollar number. And this is going to be a more a statement about the dollar than silver, I hasten to add, has already given us a number of 2,210. Uh, I'm loathed to talk that too much and try to be a headline grabber for those numbers. Point and figure is very accurate. HVF is the most accurate in geometry. So the 333 will be a pause area where you once again could have a candle like this shooting star over here and have a sustained period of nonprogress before going higher. So targets again to answer your question 3333 pullback for an extended period resumption higher 2210 um and then single digit gold silver ratio. Those are my three periods, my three getout points and where I expect pauses to occur in progress. You are currently in one now because you ran the $13 105 level for our second inim and that's why people are getting frustrated. Let me hand back.
>> Well, that that all makes sense. Okay. So, what is your I know you can't predict total time frames, but do you have a bias that's leaning you towards for that 333 number? Is it 5 years, 10 years, 20 years? What what is your what is your bias pointing to?
>> So the amazing thing about HVF method is it even gives us time stops when we expect that when we close our trades due to the fact that even though they haven't stopped out or made target, they are now listing like listing is a word that's used for ships that have no wind. You know, it's kind of just flopping around in the wind and there's new forces that have negated that. So the HVF setup is known for performing well inside often only utilizing 10% of the allowed time. So it's a real problem that we close immediately if you make a time stop. Just to give you an idea on that, the pattern on the primer triggered there and the main setup there. The allowed time to run through the $100 level was way out here at 2037. when did you actually make it? This year. So well ahead of schedule. Um, and in the same way the 330 target allows an excess of time. My personal expectation is you'll use about 10 to 15% of the time. What uh and the other key part that's informative about HVF method and I'm going to just remove the log scaling for a second. You should always have log scale on. But I just want to make one key point in for those that don't think it's a ballsy call. Without the scaling of log, putting it into percentage terms, 333 is a huge call. By reference, you are going to make way more money. And let me give you good news. Once you've finished dealing with the progress decay period of running a second intrum, the open spaces once you've left that 100 level are typically covered in a very fast and aggressive breakout way. So we're talking about dollar capitulation and a whole new world society going on here when you run that. So be careful what you wish for by the way in this. You're going to be a winner on one hand, but who knows what our society is going to be looking like during this fiat basis and what governments are going to be doing to us for protecting ourselves. But this will happen briskly considering how far it has to go from a number that's 70 to a number that's better part of almost $260 away um before it rests again. So it will come fast when it when it's done and ready and starts again.
>> And that's going to happen within 10 years.
>> I think within well less than that.
>> Well less than that. Okay. Yeah.
>> All right. Let's I want to ask you about uranium. The head of the Paris-based IEA recently said that the Iran war has permanently changed the fossil fuel industry and is going to accelerate a shift towards renewables, nuclear power, and the electrification at the expense of oil demand. They said governments are already reviewing their energy strategies and there's going to be a significant boost to nuclear power. So this is going to uh imply a great increase in demand for uranium. Can you see that in the charts? Is uranium setting up for some type of move higher?
>> Yes. And of the energies uranium is our favorite typically. And I want to highlight something that's also interesting just in the recent price behavior of similarities and why uranium short-term might be a relative minor outperformer to metals. If you just have a look at that price behavior of the since, you know, since the beginning of the year. Let me remove that uh box. And I'm going to split the screen. You're going to see the similarities particularly with the white metals. Do you see I've got silver at the bottom as well. Uh, and you can see how the waves are the the the move up, the move up. So, silver's on the downside, the hard cell, the hard sell, the rally, call it rising wedge, call it channel, channel, the second wave of selling. The second wave of selling, and then the rally. The rally. You see how we're doing this? Uh, and you can see that these are quite highly correlated and the spill. We were watching uranium as an early indicator for the possible spill. It didn't work that way. The silver and gold started it first, but we watch multitudes. So we do 360 degrees of analysis. Uranium is not like oil for us fundamentally. It is far more scarce. In fact, I'm sitting in the country that has 80% of the uranium. um who had developed their own nuclear weapons once and was the only nation to voluntarily give it down. That's South Africa. Um, and uranium is uh endemic here and is very very scarce in the rest of the world. So um, it's not like oil which doesn't have the same scarcity aspect to it. Um, so we are bullish uranium generally. Don't forget because we're bullish metals. These two are very correlated right now. these are selling off along with um the metals selling off because of that correlation. So when you have oil go up, it seems like it is part of the dichotomy, the contra indicator market going down at the moment. There's that setup. Brent's gone up, just made a new high I was showing you right at the beginning. Silver down, platinum down, gold down, and also uranium down. I am more bullish though uranium long-term than I am oil uh given what it did. Just to highlight what it did because you're only seeing the the not so good bits. If I just revert both these charts to the weekly market, uranium wasn't that far behind silver in percentage moves. So if we go from the April low for both markets, uh, and I illustrate, you wouldn't have done badly if you missed the silver bull, but you were in the uranium bull. You had 265% done from April 25 to the end of January. Both ending on the end of January. End of January was a really big period. Many people don't realize
>> end of January is when Trump sent the Armada is what he called it over to the Middle East.
>> Yeah. Uh, and that's when they were going to make it all about oil and no longer about gold and silver. We were facing real silver shortages. They needed a pivot in terms of markets impression and chasing the oil up instead of the silver up has given a breath I I would imagine to those that are behind being excessively short. You still would have chosen silver over uranium at 329%. But I would say no one's going to say you're a mug for making 265% in less than a year. 200.
>> What is your what is your method pointing to for uranium moving forward?
>> So overall we assess that both of these markets because you can see they correlated. So you've what goes for one will probably on all balance of accounts go for both is that we are in continuation patterns in both instances. So this is a falling wedge continuation. And that's a megaphone. But you are in on a shorter time frame a corrective period within that continuation pattern downwards right now. So it doesn't mean buy the second, but it means if you're investing for the long term, a buying opportunity will present itself. Allow yourself the chance to optimize your entries on this down leg. That would be uh my primary scenario for what's going on. The only terms and conditions exclusion in that is if we go into a major stock market correction, demand destroying event, which is a possibility, Fed change over May seasonality, all of that. If that becomes far larger, you could have uh a bigger dip, which could mean that these continuation patterns extend and dip deeper. So, don't be too snatchy at the first sell-off low. Um, does that answer your question?
>> Yes. All right. So, um, you could probably unshare your screen, but I do have a question about the Fed right now. It might be a personal uh opinion of yours. We'll see. But, so, we've got the new Fed chair coming in. Kevin Worsh
is likely to be approved by Congress. Worsh made clear that he prefers interest rate reductions as his primary policy tool. Um, and he gave reasons why with AIE, you know, uh, deflationary aspects, etc. His long-term objective though is to actively shrink the Fed's balance sheet.
So here, you know, I mentioned earlier the Fed's balance sheet's actually increasing. It's increased since the beginning of the year by over 170 billion. The run rate is like 550 billion for the year. It's, you know, way up there, well over 6 trillion. I don't even know what it is, 7 trillion, something. Um, however, every time the Fed has tried to lower the balance sheet since the big expansion began in 2008, something has broke.
We've got a situation where the top five countries who own US treasuries are either net sellers over the last 12 months or they're just flat buyers. At the same time, issuance is on track to be up about 500 billion this year um to 2.5 trillion and then there's even greater issuance that's coming beyond that. So, can Worsh actually reduce the balance sheet in this environment or do you suspect if he even tries something's going to break?
Um, so these early statements are more about how they intend to position and the tricks they intend to pull rather than any ability to um stop. And I've always referred to the debt uh the fiat and debt proliferation situation as an avalanche, you know, a chunk of snow, call it a snowball of rock and ice that's halfway down the cliff face. There is no stopping the avalanche, the snowball, whatever you want to call it, from hitting the village. And we've used this analogy regularly. Uh some people have started recently saying there's no stopping the train. Well, trains can be derailed. um this is a na a nature a force of nature and gravity event and that's why we prefer our analogy and the village is getting hit. So there is nobody that can save the uh the debt and fiat uh debasement or devaluation uh trend and fix the at the same time their over excessive indebtedness. It's not going to happen in actual fact.
So I remember he referred to utilizing a new inflation measure and this inflation measure would be utilized by a group called true inflation who are anything but true in their inflation. They had the US inflation rate higher when it was high. That part is more true but not fully true. uh but they currently have the inflation rate at 1.77 instead of 3.33 um and they are saying no we're doing this live as purchases are being bought you know this kind of AI and as you're buying at the thing and all this data is being fed into the super machine trust our new super machine with algo that is bringing in this live data and we've got a lower inflation rate that's great news we get to cut rates this is lies damn lies and statistics. So when you keep removing the basis of comparison, the consistency in the methodology for the basis of comparison, what you do is you muddy up the waters for people truly seeing things and you get to sell them a new lie. And the new lie is that you're facing 1.7% inflation. Now, I don't know how you feel, Gary, about that point. Uh I laughed at 3.3% inflation, but I'd imagine you'd be splitting your sides if you were told that it was 1.7. But that's the new measure. And why is it the chosen new measure? Because currently it is lower than the 2% guidance and significantly lower than what you currently have as a measurement and will allow for greater proliferation um on the basis that uh you know demand is our issue, growth is our issue, not debt and the cost of debt. Thereby we can cut rates which is just more of the same. the the Titanic is saying, "Damn the icebergs, full speed ahead." So, that's my key response to Walsh's um statement and I've seen the strategy and uh muddying up of the waters and a change of a benchmark is a great way to hide the truth that the mirror is showing you. You're now bending the mirror and saying, "How slim am I?"
Are you expecting a big print coming? Um, you know, before the last really large print by the Fed, there was a on the charts it looks like a trickle. In reality, it was a lot of money, but um there was um you know a trickle of printing and then the chart just goes vertical uh during the pandemic time frame. Um we're now in that trickle higher which looks similar to the previous couple of times. Are you expecting uh because of the larger issuance that needs to uh be put out there moving forward and because you got China pulling back, you got Japan who has their own challenges. You have um the UK and the others that are flatlining in terms of their purchasing. There's really no large buyer out there on the market that could soak up what needs to be coming. Are you expecting a large print by the Fed coming to be the buyer of last resort?
>> So I'd like to make a a couple of comments before fully answering that and this part of this stems from the previous uh question um to come back and it will be part of the answer to this. Um in your previous question you mentioned that uh he points to AI and the huge revolution and why technology is super special and you're going to have this huge deflation and I put it to you that we've had railways powered flight machines the internet and when ever has our money bought us more rather than devaluing. Um, just to address that, when have we really had a problem? Because we become so smart that everything's got so goddamn cheap. We all have to buy Ferraris with our surplus cash and we don't have to keep running on that treadmill. So, in terms of that, that is the great lie. technology is deflationary but they have always excessively overprinted to strip us of that deflationary benefit and to assert that inflation always is central banker policy. So I really want to put another nail in the previous question and just make that clear.
And as as I answered on hormuz is a hyper stagflationary triggering point to continue with the enrichment of the billionaire classes and the impoverishment of the middle and blue collar classes. Why? Because that's what inflation does. Only people who own assets where they've borrowed on fixed rates at very beneficial terms get the debt debased with the devaluation of the currency. Get richer as a result because the asset holds value or even if it loses in gold ounces but goes up nominally like the NASDAQ is doing and you Elon the bulk of your wealth is SpaceX, Tesla, everything else. I mean, he might not have $50 million in his bank account, but he's a multi hundreds of billions rich. It's all the assets. So, it's an enrichment tool for the people he represents because he's a front man. He's not the 100% owner, just like JP Morgan wasn't the 100% owner of the bank, but they get significantly richer and the debt gets destroyed and it forces impoverishment onto the masses, which then makes us very susceptible to new financial systems to sign just end the pain. So this is an engineered and it's an asset strip because you'll become a force seller when you can't get borrowing to uh buy uh a new property. You'll become a force seller on your existing home. There will be no one who can buy all of this debt contagion. So I just want to make sure that everybody understands we're going to go into a hyper version of a stagflation policy that is in designed to enrich the billionaire classes. remove all the assets from all the other classes in terms of that. So inside of that understanding, let's come back to the last question uh that you asked that I'm actually going to ask you to repeat so that I make sure I get it 100% correct.
>> Well, I was just curious if you think uh based on the issuance versus who's available to soak it up, there's a disparity there and there's going to be a larger issuance coming. And you know, I it doesn't seem like China's interested in buying. It doesn't seem like Japan is capable of buying. And uh Europe's got tremendous problems coming.
So >> that's the point. Thank you for reminding me. I'm ready to >> Is the Fed going to have to be the buyer of last resort here? Are they going to print big?
>> So hedge funds have tripled since 2019 their holdings in treasuries and are the swing buyer. And this is the Cayman Island basis trade. And this is probably why Hank Porson, who last time he stuck his head out was to manage one of the stupidest presidents ever had in George W. Bush to do the financial bailing out in a debt-based crisis has suddenly poked his head out and Jamie Dim has said we need an emergency type situation for a no bid under treasuries. So we are going into the where normally you would expect a print. We are going into where the Fed is the only buyer because even the basis trade has got too big that is being run out of Cayman who my assumption is these are NSA CIA legacy family darkhand Ponzi support mechanism for a failing system that's actually ready to collapse but is being held up until the key moment they desire it to collapse. So UK, Belgium, Luxembourg are bigger versions of the Cayman Island, but the Cayman Island basis trade is well through 2 trillion. If you if you ask Grock, it'll say 465 billion. If you ask it, do the nonadjusted, it's well through two trillion of holdings. And in fact, hedge funds, and I say hedge funds as well. Bear in mind, you know, the CIA is in media, it's in everything, which also includes the financial services industry. So the US Treasury market is being held up by people who know it should be correcting immensely downside going to zero and recognize that it needs to be retained a little longer until they're ready for all fall down day. I say ring ring rosies.
I would say I would say if the stock market were to drop then those hedge funds are going to be selling off a lot of those treasuries to and then we have a major cascading problem
>> and that's a very good point you made because what's actually happened is Bessant recently made some statements the the so the UAE got a swap line and you have to understand the Arab states all of them have a peg to the dollar right now for being America's friend. They got bombed. They got infrastructure reduced. They uh Dubai is a 94% um expat community. Most of that has left. They have no travel. I'm booking a business class ticket at the moment. Their airlines are half the price of everybody else because they had to cancel so many. Nobody trusts that they will fly. Um their property market is going down. They've just panic rushed out and cut 750,000 Durhams to 400,000 for you to get um residency in Dubai. All because they are getting massive capital outflows. People selling Durhams, taking their dollars and leaving because of being a friend of America. It was Henry Kissinger say you're in big trouble if you're America's enemy and you're you're near dead if you're America's friend. they are finding out and they then said listen here we are selling our treasuries and we heavily invested in your stock market too. um we need dollars. You created this, you created this shortfall. You dragged us into this fight and we want to sell our treasuries and everybody and we kind of we did a YouTube on this and it's like, "No, no, no, no, no. Don't do that. Don't do that. Here's a swap line here. Preferential rates. Don't worry. We'll give you your dollars to support your peg to keep paying the salaries of those that have to remain behind to keep infrastructure going." So what you actually have is that all assets particularly bonds but even a downturn in other American assets I point to the Swiss National Bank which is a hedge fund in I call it hedge fund again inverted commas in the the US stock market there is too much money US has had a almost a monopoly as the pumperamentals destination of choice because of the petro dollar uh system the UAE's departure from OPEC is less about OPEC an end of cartel pricing and more about seeking freedom to sell their oil in different ways which is a diversification potentially out of the dollar for gold back yan rubles or anything else they choose and that is another shoe to drop this this is really it's they're just waiting for the day that they want to pull this if you knew Jamantia you could probably guess it I can't and I don't but it's going to be showing in the chart soon
>> we are living in interesting times my friend all right Well, this has been an incredible discussion with Francis Hunt. Before we wrap up here, I just want to direct everyone who's interested in the metals and mining sector to dive into our Substack at metalsanders.substack.com. When you join the quickly growing community, you're going to receive a free report. It's titled, "If you don't own gold, you know neither history nor economics." That's a famous quote by investing legend Ray Dallio. And that's the name of the report you'll receive. Now, I'm positive that you've been enjoying the conversation Francis and I have been having. Please let them know. Hit the like and subscribe button and leave a comment below the video. All right, Francis, we're going to wrap up here. Would you please share a key takeaway that you want to leave the viewers with and then let everybody know where they can learn all about your work and how they can connect with you?
>> Regardless of the precariousness of the system, it's a beautiful life. Uh and rather than being some blackshirted doomer, um I enjoy life. I intend to enjoy life and I aim to build wealth during a very unique period in economic history. And yes, it is possible. Some of the biggest fortunes are built during uh contagion and collapse. I'll point you out. Not only should you be focusing on building wealth, you should be focusing on protecting that wealth not uh for yourself, your family members and extending your global footprint so that you have some fallback options outside of the western world. Those are the three key points that our community focuses on helping people to do. We've been very successful. Gold is a massive part of that. Whatever price is on any given day, value in many years time will be significantly higher along with silver and certain other investments. If you'd like to hear more about the HVF method and how we uh determine charting so that you can accelerate that process of building your wealth, pop over to the Market Sniper YouTube channel. There are links where you can book a call from there. Watch out for imposters, but we're also on X under at the market sniper. And we keep an eye without loving uh the crypto market at the crypto sniper, both on X and YouTube. Thank you for having me on. It's been a great discussion. That feels like so much more that could be said.
>> Yeah, absolutely. Um, you also have a website. We have a website on thearket sniper.com and all our links for engaging uh with us are safe to do from the website or the YouTube show notes.
>> Fantastic. All right. So, um I'm going to have all that information up on the screen, but guys who are who are tuning in right now, you could head over to the description area and I'm going to have all the links there. Just click the links and you'll get over to Francis's YouTube website, X account, etc. Um I would highly recommend that you follow him, engage with him. Francis, thank you so much for coming back on Metals and Miners, for being so generous with your time and ideas and your charting techniques. It's been wonderful to spend the time with you. I look forward to having you back on sometime soon. Everybody who's tuning in, thanks for watching.
>> Bye-bye. And you've been doing some great work. I love the headings and the substacks I'm getting. People should support you. I'd really encourage them. Thank you for having me on.
>> Thanks, Francis. I do appreciate that. everyone who's interested in the metals and mining sector to dive into our Substack at metalsand miners.substack.com. When you join the quickly growing community, you're going to receive a free report. It's titled, "If you don't own gold, you know neither history nor economics." That's a famous quote by investing legend Ray Dallio. And that's the name of the report you'll receive. Heat. Heat.