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Patrick MontesDeOca
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Published Technical Analyst, Author, Commodity Trader, Systems Developer, Algorithmic Intelligence, Computer Modeling of Processes. I custom build Proprietary Artificial Intelligence for each individual client's portfolio needs. After more 30 years in the business, Patrick MontesDeOca has... More
My company:
Equity Management Academy
My blog:
Trading Talk
My book:
Vedic Codes of the Stock Market Volume 3 – ETFS
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  • Electronic Wisdom Cycles And Global Futures Presents A LIVE Webinar – 1.25.2012 Part 1.

    Thank you for spending this hour with me and I hope that I can live up to your expectations in sharing this incredible tool I discovered for the application of trading in the financial markets.

    I also wanted to thank Global Futures for sponsoring this event and hopefully we can capture some informative quality time. I hope you had a chance to read how the Vedic Code Price Momentum Indicator came about. It was through meeting, a chance meeting with Swami Ram Charran, a physicist, mathematician and experienced consultant in Vedic mathematics.

    In sharing this information I was able to take this mathematical formula - that is basically an ancient formula that uses Vedic mathematics, and applies the basic Hindu Arabic mathematical system of 1 to 9. This form of mathematics is the basis of western mathematics, enabling me to integrate it with Elliot Wave principles and Fibonacci sequences, thus creating a proprietary algorithm for trading in the financial markets.

    In using this formula I was able to essentially make an incredible discovery. The application of this formula for the financial markets increased the standard deviation ratio from 50% to anywhere from 85 to 90%, which is phenomenal.

    Let's move on to taking a look at the beginning of the long-term cycle which started back in the 2008. Basically what we're looking at is a nine year cycle. The basis of this mathematical formula uses the nine year cycle you see on the chart below.

    At the bottom of 2008, we experienced this massive financial meltdown, causing all class assets to collapse in value during the month of September of 2008.

    I remember clearly… I've never had a gut feeling such as the one that I experienced in 2008, and that told me as a trader that we were beginning to experience something really unusual. Since then, basically the market has followed through with the bullish energy pattern into 2009, as expected and as we look at the acceleration pattern in 2010, it exceeded the objective of 1,800 in 2011.

    Now, what you need to understand is that this information is produced twelve months in advance on the yearly charts. On the long-term charts it is produced nine years in advance. And on the thirty day chart it is produced thirty days in advance. So, this information is prospective information that you would have been able to have access to before 2008, recommending you hold onto your position all the way till you met your objective and target of 1,800 in 2011.

    This is where we are right now. If we take a look at the long-term chart pattern in 2011, this is a second wave corrective pattern by integrating Elliot Wave formulas. We have gone into a second wave ABC correction which according to this chart appears to be completed by the end of 2014. We are in this first leg down from the 2011 highs above 1,800 made on September 6, and within this corrective pattern ever since.

    Obviously in following this pattern, what I can say to you is that I have really some serious doubts, based on the recent resolution of the energy of this leg whether we will be able to get down to 1,300 level as opposed to what it appears to be developing, is possibly one of the strongest moves for this particular wave cycle year.

    We will take a look at the yearly chart in a minute, but in completing this nine wave cycle gives us an idea in terms of the wave pattern that this code is following and it's indicating that the completion of this corrective wave pattern should take place sometime in 2014, from which we are going to experience probably the biggest and the longest rally in this market prior to the culmination of what could be the completion of this long term wave cycle top in 2020 above 3,200. We are looking at prices in 2016 to reach minimum levels of more than 2,500 dollars an ounce.

    As you can see, the chart pattern in 2016 completes wave number IV, which is essentially setting the market up for what I believe to be a massive correction to the downside, very similar like the one we saw in 2008.

    Let's move on to basically a comparison of the Gold Vedic Code Price Momentum indicator for 2011, with the real-time chart comparison below and you can see that the actual energy of the real time chart is very accurate or similar to the Vedic Code energy chart that was anticipated twelve months in advance.

    Here you can take a look at the top in April… the end of April, and in fact silver got up to about fifty dollars an ounce. Look at the double top formation that gold made as of September 6, at 1,923.70, before the major downturn unfolded the rest of September. What we see here basically is that the correction that we saw in April, 2011, was not as deep for gold as it was for silver. Silver came down about 8% while gold was down about 30%, then we saw this massive rally from around late June, early July lasting all the way to September.

    I hope that most of you were able to capture this up move and were also able to capture the top of the market that was made on September 6, at 1,923.70.

    In fact we documented this trade on our first YouTube tape posted on September 7. You can follow the recommendations, confirmations that documented what this phenomenal code has produced since.

    I want to move on to the next chart above and compare the chart to the real thirty days cycles that we use to capture tops or bottoms in the market as well as the acceleration patterns daily.

    If we use the index which is the 1 to 9 axis on the left of chart, anything above 9 is completely overbought. As the momentum indicator shows anything at 1 is oversold.
    So, if you're taking a look at the 9 year cycle and you are buying long term you would be buying into the corrections. If you see the previous chart again, the long-term chart for a second, and the yearly chart, I want to point out to you that from this correction that ended December 15, it is the ABC completion of the 5 wave pattern in 2011, and essentially picks the bottom or the beginning of the wave currently unfolding as the first wave pattern for 2012.

    Okay. So let's go back to the 30 day daily action chart above and I want to point out to you how accurate this was in today's action. If everybody was watching we saw a massive move to the upside today. In fact we are looking at the 25th of January and the code is saying to cover short and reverse to long. So if you are trading the long side of the market, use the low entry points or the lows of these cycles to buy into your positions. If you are selling to take some profits use the high points in the chart to shave some profits. Or if you want to add to your position based on the trend use the acceleration mode patterns.

    I want to the move on to the real-time chart above, the weekly Gold Fibonacci Retracement that we published in Seeking Alpha Jan 22, which essentially reflects the Vedic Code Price Momentum chart using a line chart. And you can see here just on the surface the first impression is very similar to the Vedic Code Chart produced twelve months in advance for the yearly charts.

    So, it is pointing to us that here on this chart for example, using Fibonacci Retracements and breaking out of this pattern which seems to be a descending wedge, is a very bullish formation on the bigger picture. Here from the high made in September to the low made on December 29, we have a bearish flag formation which is a highly technical indicator anticipating the market is about to break out to the upside with the 2011 high as a short term target.

    Ladies and Gentlemen, this is indicating to us that we're about to experience the most historical part of the gold market. This is a historical buying opportunity and we are beginning to see the price and charts aligning themselves to the energy that has been prospectively forecasted months in advance.

    Let's take a look at the silver market in comparison to the gold Vedic chart above. Now here let me show you how I am personally using the Vedic Code gold price momentum indicator to trade in the silver market.

    To be continued…

    Disclosure: I am long AG, AGQ, PSLV.

    Additional disclosure: Additional disclosure: PRECIOUS METALS PRODUCTS TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

    Jan 31 6:04 PM | Link | Comment!
  • THE STOCK MARKET MOST POWERFUL AND MOST MISSED WAVE - THE 9TH WAVE OF VEDIC CODES!

    Every system has a division of 9 elements in Vedic Code Waves. Whether it is the conception of a child or a business or a plant or the stock market, they are all within a system of 9 divisions according to the time line.

    The time line can be any unit chosen, such as an hour, a day, a month or a year or a decade. Since time has no end or no beginning, we have to create the beginning when it comes to choosing to calculate a system. There are certain universal parameters that help us to calculate time.

    As you can see the number 9 is very predominant in all phases of the universe. It acts like zero and at the same time acts like a powerful number that completes a system and prepares it for renewal. The Huricanes Katrina (8/28) and Wilmer (10/8) both were destructive in their paths. The 9th hurricane in 2011- IRENE was very destructive and fearful.  If you check the history, most of the 9th hurricanes were destructive in nature.

    Most burial grounds are located on 72nd streets in the United States and if not on a street that begins with the letter “I”. OJ Simpson was living in a house number of 720 (9) when he was accused of murder and lost all of his wealth. Martin Luther King was killed in front of his hotel room number 378 (9). Al Capone the Mafia leader that murdered many was born on 9/27 (9). The Stock Market Crash of 1929 ended in 1935(9) and most of the natural disasters occur around the month of September (9) such as 9/11, the stock market crash of 2008 and the stock market crash of 2011. The Great Depression Era of the United States actually started at the end of 1926 before going into the big crash in 1930.

    As you will observe, most stock market crashes occur around the months of September and October, or February. That is because we have two year ends, a lunar one and a solar one. The solar year ends in September-October and the lunar one ends in March. Some Vedic traditions have been following the solar calendar system while others are following the lunar system. The stock market tends to follow the lunar calendar of 13 months. Since September-October is the 9th month, most crashes will happen around that time. Most world disasters also will happen around that time, such as 9/11, the Tsunamis, the hurricanes, the earthquakes and so on.

    The Market has seen significant crashes in the years such as the silver crash of 1980, the crash of 1989, 1998, and 2007. The September –October period will always see a significant drop in the energy of the stock market, especially the metals and non-eatable commodities. That is because the end of the universal cycle of waves occurs within these two months and is equal to the 9th wave in the Market as well in every person’s life.

    We all get affected by the harvest season and we all get affected by the Stock market crashes at this time in the year. It is also the time when school terms begin and when lots of tuition payments are due.

    The 9th wave can match the 4th wave correction as well as the 6th wave correction. However the 4th wave is not as bad as the 6th wave and the 9th wave corrections. The 4th wave is a foundation correction, the 6th wave is a directional correction and the 9th wave is a death-renewal correction. The above table includes mostly the death renewal corrections in August-September – October months of the year.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Jan 02 11:04 AM | Link | Comment!
  • Exclusive Interview with Eric Sprott Concerning Silver Price Outlook Brought to You by CMT-Group.com
    Exclusive Interview with Eric Sprott Concerning Silver Price Outlook brought to you by CMT-Group.com
     
     
    Patrick MontesDeOca: Mr. Sprott, can you please give us the current situation in terms of price in the silver market? What you might see in the short term as it unfolds in the next six to twelve months, what is your forecast?

    Eric Sprott:Sure, I take a longer term view than six to twelve months. I’ve been involved in silver for about probably almost ten years now and of course the price of silver has done wonderful things in that time period even though recently it has come under a lot of pressure. My thesis of being that even though the last decade has been the decade of gold, this decade will be the decade of silver. I can only imagine that it will go back to its historical relationship to gold of 16 to one in term of price. And as an example of 16 to one, with gold at $1600 it would suggest that the silver price should be $100. And most of the data that I look at certainly as it pertains to day to day markets, and I don’t mean the Comex, were not talking about that, were talking about the physical market for silver, and we have data points that suggest that buying for silver by the public is almost on a ratio of dollars of silver being bought to dollars of gold being bought. We can see that the U.S. Mint’s data that comes out every month, and pretty much every day, so for example, the amount of silver coins being bought through the mint’s service they sold 50 times the number of silver to gold coins. This month it’s actually running around 70 to one. This really means people are putting as many dollars into silver as they are into gold. But there is nowhere near the amount of silver to invest in as there is gold.

    P:So what do you attribute this correction we saw recently to the correction we saw in the beginning of April?

    E:Sure, well, I think both corrections were orchestrated by people who are massively short silver. When the price when from 20 to 50 roughly, I mean, those shorts had lost about 20 billion dollars. If silver had broken through $50, things would have gone absolutely crazy. Like when gold went to 850, it doubled shortly thereafter, which would have created great stress on those people who were short. And unfortunately in the Comex market, which is mostly a paper market, those who have huge amounts of money can force the price down, and as you may have recalled Patrick, there was a Sunday night around 9:30 when the price went down $6.

    P:And it’s usually over the weekend that this happens.

    E:Exactly, when nobody was trading. And that particular day the Chinese market was closed that day and the UK market was going to be closed that day. And of course, everyone comes into work at the New York time and the price of silver is down $6, they already have the margin call. Then the CME raised margins 4 times in the next week which put the long holders of silver contracts under tremendous duress, so they had to sell them. So a lot of the short position has been covered here, I’m not saying there won’t be further raids. There was a raid recently where they recently knocked it down to $27, and that is what happens in the paper markets. Paper markets can trade up to a billion ounces a day, while we only produce 900 million ounces a year. And looking at the physical markets, which I spend most of my time looking at, I can identify something like a 380 million ounce change in supply and demand just in the past five years in a 900 million ounce market. I believe that sooner or later we are going to run into a shortage in physical silver and the physical silver price will then determine the Comex price.
     
    P:I think a lot of people would like to know, potentially, how soon would you see this change taking place?

    E:Well that is a very tough question to answer because there are forces at work every day, right, and you have to exhaust those forces or they have to have some reason to change their view on what’s their best interest in the paper markets. I’ve always imagined there, or hoped that some industrial user of silver will say “Oh, I can’t get the silver” and the word gets out that there is a physical shortage. Or the people just continue to buy at the rate they are buying, because you just can’t keep buying silver on a one to one ratio to gold and have the price be 50 to 1. That is mathematically impossible.

    P:I know that you like silver very much, but let’s talk about gold for a minute and please tell me your opinion about Venezuela, Chavez repatriating the gold that they had on deposit with English banks. Is this possibly or potentially the beginning of a new trend of realizing the inventory of real gold by these countries or institutions.

    E:Sure, well, I think it is one step in the process. One other thing that has happened is we’ve now seen that central banks are buying gold; which they used to be sellers of physical gold, now they are buyers of physical gold. The GFMS this year suggested that central banks may buy as many at 500 tons of gold, where as they were sellers last year. And this is in a 4000 ton a year market. And I think Venezuela’s statement is “We want to have out physical gold in our physical possession”. Is it going to make a difference? I can’t tell you the answer yet because of course Venezuela doesn’t have their gold yet. And I’m surprised it’s taken, theoretically, until the middle of November for them to get their gold because it was on deposit you wouldn’t think the logistics of transferring that amount of gold, I think its 93 tons or 110 tons, that’s not a lot of gold is it in terms of physical size; because it is so dense.

    P:You experienced the same kind of reaction I believe when you recently wanted to purchase some silver. Where it took a little longer than what one would think to be normal.

    E:Well, when we started the Silver Chest, we had to go into the market and buy 15 million ounces. This was about exactly a year ago. And 15 million ounces at the time, [an ounce] was probably $20, was like 300 million worth of silver, which is not a lot of silver. And you would think people advertise it as a billion ounces of silver and you want to buy 15, you’d get pretty speedy delivery. It took us 3 months for us to get the silver and some of that silver that was delivered to us was manufactured after we had made the purchase agreement. Which really means, in my mind, there wasn’t a tremendous amount of silver lying around waiting to be delivered.

    P:So there could be the possibility that we may have a lot less inventory than what appears to be told on these government reports.

    E:Sure, nobody really knows how much inventory there is. We know how much is in Comex, we know how much the PSLV owns, but theoretically that shouldn’t be available, beyond that, I just don’t believe there’s huge amounts of silver and we are buyers of silver every day. We’re very often delayed on our shipments. You know we could go in and buy 2 or 300 thousand ounces and we sort of get the common “Well, you know that shipment is going to take 2 or 3 weeks”, which really means, I don’t think there is really any ready silver inventory that’s just waiting for someone to say “Ok fine, I’m going to buy” [then] “We’ll deliver it to you” because it’s not really that difficult to deliver silver.

    P:Let’s talk a little bit about the European crisis, Eurozone crisis, the banking crisis. How do you see that effecting the silver price short term, intermediate, or even long term?

    E:Well, I think, Patrick, it depends on how it gets resolved.  I mean if it gets resolved simply by printing money, I would think it would be incredibly positive for gold and silver. Because people would realize that felt currencies are being debased through those actions. I think the fact that gold and silver are where they are is very much a result of people more and more realizing that the powers that be seem to care less about how much they print and therefore if that is the solution; that we just print I think it would be very optimistic. But there is one other choice. The choice is: they don’t solve the problem, which as you know has become a banking problem and if there was a banking problem that erupted, it could be even more positive to silver because people will realize “If I can’t have my money in a bank, what are my choices”, and as we all know, very limited. And most of us that are believers in silver and gold, believe we don’t want a counter party and we’d much rather own the physical, so we aren’t relying on someone else to fulfill the promise.

    P:According to Arabian Money they commented that the Arabian banks have isolated themselves from what they believe to be an economic crash of the western world. How do they fit into this equation in terms of the demand for precious metals?

    E:I don’t have a lot of data on Arabian banks. I truly don’t. I mean, we watch the gold sales in Dubai and places like that and we’re very aware that the Arabs, the whole Arabian community is a believer in gold and they like trading physical things for physical things, but I must confess, I am not enough of a student of what’s actually happening in that area to tell you one way or another what the flows are. We did see a data point about a years ago where Saudi Arabia said “Oh, our reserves were supposed to be this but they are really 60% higher” and it came out of nowhere. I mean, I would certainly imagine if I was there, and I were selling goods to the world I might very well want to have my cash invested in silver and/or gold.

    P:I’m going to ask you to stick your neck out here and try to do some kind of a forecast for our audience. What do you see, I would say; let’s say within 2012, in terms of the mint picture, the crisis in Europe and essentially trying to resolve this issue and finding some kind of resolution? If these economic world leaders are able to come and put together an intelligent plan, what do you feel the price of silver could do?

    E:Well, I have to beg to differ with the word ‘intelligent plan’, because I don’t think there is an intelligent plan. In fact I think we all now know that most plans have not worked and created a very difficult situation for the average person in the world and has exacerbated the problem in the banking world. So, they’re going to come up with a plan, it won’t be an intelligent plan. I don’t think solving a debt problem is solved by more debt and leveraging, which is what’s being discussed in Europe today. But either way, as I said before, I don’t think the impetus will be for precious metal prices to rise, if I had to predict, I certainly would believe that silver would be above $50 next year and that gold certainly would be above $2000 and it could be substantially higher than that. It’s a question of how irresponsible governments are and maybe we will find out there is a Eurpoean plan, and then 3 or 4 months later, there is an American plan where we get QE3. It’s hard to know where it’s going to go because we don’t know how irresponsible the governments are going to be, but they are tending to be irresponsible, therefore you would think there would be lots of impetus for higher prices.

    P:Eric, I would like to thank you once again for taking this time to spend with us and answer some of these questions for our audience. Thank you so very much.

    E:Patrick, My pleasure.

    P:Please visit CMT-Group.com/contact for further information. Have a good day. 
    Nov 10 2:28 PM | Link | Comment!
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