XAU/XAG - 25th January 2024 | @ 264 Days | + 9.59%
Last trade: + 9.59% | 'B' class signal detected in Gold/Silver ratio. Running at an average wavelength of 264 days over 12 iterations since February 2015. Currently peaking.
ΣL Cycle Summary
This excellent, longer term, periodic wave in the gold to silver ratio peaked very recently and is likely now on it’s way down to the next trough iteration, due May 2024. This means silver will outperform gold during this down leg, likely manifested in increased amplitude for silver relative to gold. Both metals have virtually identical frequency profiles, variance is mostly governed by differing amplitude (volatility). This ratio helps us to identify a periodicity in that difference and choose instruments accordingly when faced with similar phasing.
Trade Update
See also: Live ΣL Portfolio & History
Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous post for this instrument, linked below.
Type: Buy - XAU/XAG 22nd September 2023
Entry: 22nd September 2023 @ 81.72
Exit: 24th January 2024 @ 89.56
Gain: 9.59%
Current Signal Status
Defining characteristics of the component detected over the sample period.
Detected Signal Class: B - learn more
Average Wavelength: 264.11 Days
Completed Iterations: 12
Component Yield Over Sample: 171.04% - learn more
Time Frequency Analysis
Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.
Current Signal Detail & Targets
Here we give more detail on the signal relative to speculative price, given the detected attributes of the component. In most cases the time target to hold a trade for is more important, given we focus on cycles in financial markets. Forthcoming trough and peak ranges are based upon the frequency modulation in the sample (learn more).
Phase: Peaking / Peaked
FM: +- 54 Days
AM: 2.45419
Next Trough Range: April 5th - July 22nd, 2024
Next Peak Range: August 18th - December 4th, 2024
Sigma-L Recommendation: Sell
Time Target: ~ May 30th, 2024
Current Signal Phase
This is ‘how far along’ the cycle is in it’s period at now time and is related to the predicted price action direction.
Current Signal Frequency Modulation (FM)
This is how much, on average, the signal detected varies in frequency (or wavelength) over the whole sample. A lower variance is better and implies better profitability for the component. Frequency usually modulates relatively slowly and over several iterations.
Current Signal Amplitude Modulation (AM)
This is how much the component gains or loses power (price influence) across the sample, on average. Amplitude modulation can happen quite quickly and certainly is more evident than frequency modulation in financial markets. The more stable the modulation the better.