In an interview with Soar Financially, market forecasting luminary Michael Oliver issued a stark warning: the current market bubble is on the verge of bursting, potentially ushering in a painful two-year bear market. Oliver, the highly respected founder of Momentum Structural Analysis (MSA), known for his remarkably accurate predictions, including a prescient call for a gold breakout in December 2024, laid out his analysis of the precarious state of the S&P 500 and its implications for precious metals and other asset classes.
Oliver minced no words regarding the S&P 500, asserting that the technical damage is significant and points towards a prolonged downturn. He highlighted a critical break in the index's quarterly momentum in early January, a signal often missed by conventional price chart analysis.
While Oliver painted a bearish picture for equities, his outlook for gold remained decidedly bullish. Pointing to gold's outperformance of the S&P 500 over the past couple of years, he suggested that smart asset managers are already recognizing its safe-haven appeal.
"If they had their head screwed on, they see that gold has not only been outperforming S&P recently, but for the last couple years," Oliver noted.
He highlighted the significant breakout in gold that MSA had predicted in March 2024, when the precious metal was still around the $2,000 level. Despite subsequent pullbacks, Oliver believes the recent sharp break above previous highs signals a new phase of rapid gains.
"From now on, the type of breaks you're going to get will be more like this one and probably less so in percentage. Quick drop, new high," he predicted, suggesting a dynamic and potentially volatile upward trajectory for gold.
Oliver also shone a spotlight on silver, arguing that it is currently significantly undervalued relative to gold. He pointed out that the gold-to-silver ratio has reached historically low levels, a condition that has typically presented a strong buying opportunity.
"If you go back historically, you know, that is dirt cheap... It's always a buy, by the way," Oliver asserted.
Furthermore, he sees substantial potential in gold miners, suggesting they could triple their relative value compared to gold once a key trigger level is breached.
"I think they're a far better place to be. We're waiting for that trigger level, and it's like a hair's breadth above the recent spread highs," Oliver explained, highlighting the strong fundamentals of many gold mining companies.
Oliver identified the $65 level for WTI crude as a critical threshold. A sustained move above this point, he argued, would signal a "bear trap low" and the beginning of a significant upward trend, potentially reigniting inflationary pressures.
"If you get back above that 65 floor... wake up because you probably saw a bear trap low... and momentum says I'm breaking a multi-year downtrend and I'm re-engaging to the upside strongly," Oliver warned.
Oliver concluded by emphasizing the confluence of factors, including geopolitical tensions, that could contribute to unexpected market dynamics in 2025. He echoed Lyn Alden's sentiment that the U.S. is exhibiting characteristics of a "banana republic" with bonds and the dollar declining while gold rises.
"Interesting time,s Ren Kai and I think 2025 will be a historic year in terms of probably unexpected dynamics in markets that nobody expected," Oliver stated, urging investors to "be on the right side" of these potentially transformative events.
Michael Oliver's comprehensive analysis serves as a significant warning for investors navigating increasingly turbulent markets. His forecast of a looming bear market in equities, coupled with his bullish outlook on precious metals and a potential rebound in oil, underscores the need for a cautious and strategic approach to investment in the coming months.