{"id":61539,"date":"2025-04-23T10:04:57","date_gmt":"2025-04-23T10:04:57","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=61539"},"modified":"2025-04-24T01:18:42","modified_gmt":"2025-04-24T01:18:42","slug":"blow-off-or-buy-the-dip","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/04\/23\/blow-off-or-buy-the-dip\/","title":{"rendered":"Blow-off or buy the dip?"},"content":{"rendered":"<p>President Charles de Gaulle once equated being an ally of the United States to sharing a lifeboat with an elephant. The last month has been like sharing a lifeboat with an elephant on ketamine.<\/p>\n<p>Gold epitomizes recent volatility in financial markets. It spiked up to $3,500 per ounce on President Trump&#8217;s threat to fire Fed chair Jerome Powell and then plunged when Treasury Secretary Bessent and later Trump moved to placate markets.<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-22-gold.png?resize=525%2C404&#038;ssl=1\" alt=\"Spot Gold\" width=\"525\" height=\"404\" \/><\/p>\n<blockquote><p>Wall Street flipped to buy mode on Tuesday, without any fresh criticism of U.S. Federal Reserve Chairman Jerome Powell or flip-flops on tariffs from President Donald Trump to disquiet markets again. Indexes reversed Monday&#8217;s tumble, hitting session highs following a report that U.S. Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable and he expected the situation to de-escalate, raising hopes a bit on U.S. trade negotiations. (<a href=\"https:\/\/www.reuters.com\/markets\/global-markets-trading-day-graphics-2025-04-22\/\">Reuters<\/a>)<\/p><\/blockquote>\n<h2>Is this a blow-off?<\/h2>\n<p>No. The Trend Index shows a sharp rise in volatility since April 9, but these are short-term moves rather than the culmination of a long-term acceleration.<\/p>\n<p>Blow-offs typically occur after a feedback loop in which rising prices attract more buyers, who drive up prices, attracting more buyers. The cycle repeats, with the trend growing increasingly steeper until the market reaches saturation point, when new buyers dry up and the market reverses in a sharp blow-off top.<\/p>\n<p>Similar feedback loops occur in nature&#8211;from bushfires and housefires to locust swarms and cyclones&#8211;where they start slowly and accelerate into a massive culmination. A bushfire runs out of dry brush, a fire in a room runs out of oxygen, a locust swarm runs out of food, and a cyclone runs out of moist air when it reaches land. All end similarly: expanding rapidly until they consume all available fuel, then suddenly dying.<\/p>\n<p>The weekly chart below shows a typical stock blow-off, experienced by vaccine specialist Moderna (MRNA) during the 2020-2021 COVID pandemic.<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-22-mrna2021.png?resize=525%2C404&#038;ssl=1\" alt=\"Moderna (MRNA)\" width=\"525\" height=\"404\" \/><\/p>\n<p>MRNA gained 2500% in less than two years before the accelerating uptrend ended suddenly, with a <a href=\"https:\/\/www.incrediblecharts.com\/candlestick_patterns\/candlestick-patterns.php#shooting-star\">shooting star reversal<\/a> at $500. The stock had more than doubled in the preceding four weeks, with the weekly Trend Index spiking to a high of 5.<\/p>\n<p>In comparison, gold gained 75% over the past 14 months, accelerating to a 16% gain in the past five weeks, with the Trend Index peaking at a high of 1.<\/p>\n<p><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-22-gold-w.png?resize=525%2C404&#038;ssl=1\" alt=\"Weekly Gold Chart\" width=\"525\" height=\"404\" \/><\/p>\n<h2>Conclusion<\/h2>\n<p>There is no evidence that rising demand for gold is approaching a culmination. Private demand is growing, and central banks are rapidly converting reserves to gold. Demand is fueled by global uncertainty, and there is no end in sight.<\/p>\n<p>The current pull-back is a much-needed correction after a steep advance. We expect strong support around $3,150 per ounce and will buy the dip. Our long-term target remains $4,000 within the next six months.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>President Charles de Gaulle once equated being an ally of the United States to sharing a lifeboat with an elephant. The last month has been like sharing a lifeboat with an elephant on ketamine. Gold epitomizes recent volatility in financial markets. It spiked up to $3,500 per ounce on President Trump&#8217;s threat to fire Fed &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2025\/04\/23\/blow-off-or-buy-the-dip\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Blow-off or buy the dip?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,34],"tags":[4404,1365,6839,6838,6840,3204,3782],"class_list":["post-61539","post","type-post","status-publish","format-standard","hentry","category-gold-precious-metals","category-us-canada-countries-regions","tag-blow-off","tag-feedback-loop","tag-moderna-mrna","tag-president-charles-de-gaulle","tag-shooting-star-candlestick-reversal","tag-spot-gold","tag-tariffs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Blow-off or buy the dip? - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Blow-off or buy the dip? - the patient investor\" \/>\n<meta property=\"og:description\" content=\"President Charles de Gaulle once equated being an ally of the United States to sharing a lifeboat with an elephant. The last month has been like sharing a lifeboat with an elephant on ketamine. Gold epitomizes recent volatility in financial markets. 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He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008\/2009 and 2020 bear markets well ahead of actual events. 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He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters. Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis. Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008\/2009 and 2020 bear markets well ahead of actual events. 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In a nutshell: The economy remains solid The labor market remains solid Inflation remains \"somewhat elevated\" compared to the Fed's 2% target Increases in tariffs this year are likely to push up prices\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"Fed Chair Jerome Powell","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/powell2.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":61522,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/04\/17\/no-fed-safety-net-if-markets-collapse\/","url_meta":{"origin":61539,"position":1},"title":"No Fed safety net if markets collapse","author":"Colin Twiggs","date":"April 17, 2025","format":false,"excerpt":"Summary Fed Chair Powell warned that tariffs may increase inflation and reduce growth He also stressed that there was no \"Fed put\" if markets collapse Stocks retreated after a hawkish speech by Fed Chair Jerome Powell and Q&A session at the Economic Club of Chicago on Wednesday. His message was\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"S&P 500","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-17-spx.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-17-spx.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-04-17-spx.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":63622,"url":"https:\/\/thepatientinvestor.com\/index.php\/2026\/02\/13\/markets-swing-to-risk-off\/","url_meta":{"origin":61539,"position":2},"title":"Markets Swing to Risk-off","author":"Colin Twiggs","date":"February 13, 2026","format":false,"excerpt":"Key Points The Dow Jones Industrial Average retreated below support at 50,000. Bitcoin respected resistance at 70,000, signaling a financial market swing to risk-off. 10-year Treasury yields fell to 4.1% as investors fled to safety. Bitcoin1 (BTC) is in a steep downtrend, breaking support at 70,000. The steep fall warns\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"Bitcoin (BTC)","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-02-12-btc.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-02-12-btc.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-02-12-btc.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":63676,"url":"https:\/\/thepatientinvestor.com\/index.php\/2026\/02\/21\/supreme-court-ends-peak-trump\/","url_meta":{"origin":61539,"position":3},"title":"Supreme Court Setback for Trump","author":"Colin Twiggs","date":"February 21, 2026","format":false,"excerpt":"Key Points In a 6-3 decision, the Supreme Court ruled that the International Emergency Economic Powers Act of 1977 doesn't authorize President Donald Trump to impose tariffs. The Yale Budget Lab estimated that households' average cost burden would fall by about half in 2026, to between $600 and $800, if\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"Chief Justice John Roberts","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/chief-justice-roberts.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":62103,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/07\/09\/trumps-50-tariff-on-copper\/","url_meta":{"origin":61539,"position":4},"title":"Trump&#8217;s 50% Tariff on Copper","author":"Colin Twiggs","date":"July 9, 2025","format":false,"excerpt":"Summary President Trump announces a 50% tariff on copper US copper futures jumped more than 12% London copper prices fall as this ends arbitrage trade ahead of US tariffs Tariffs will increase prices and shrink GDP, moving the US economy closer to recession BEIJING, July 9 (Reuters) - U.S. President\u2026","rel":"","context":"In &quot;Copper&quot;","block_context":{"text":"Copper","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/gold-commodities\/commodities-gold-commodities\/copper\/"},"img":{"alt_text":"Jeroen Blokland","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-07-08-blokland.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-07-08-blokland.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-07-08-blokland.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":63467,"url":"https:\/\/thepatientinvestor.com\/index.php\/2026\/01\/13\/trumps-attack-on-powell-sparks-flight-to-safety\/","url_meta":{"origin":61539,"position":5},"title":"Trump&#8217;s Attack on Powell Sparks Flight to Safety","author":"Colin Twiggs","date":"January 13, 2026","format":false,"excerpt":"Key Points Chair Jerome Powell said on Sunday that the Justice Department has opened a criminal investigation against him for allegedly misleading Congress about a building renovation project at the Federal Reserve's headquarters. Precious metals demand spiked in an investor flight to safety. Jan 12 (Reuters) - The past three\u2026","rel":"","context":"In &quot;Copper&quot;","block_context":{"text":"Copper","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/gold-commodities\/commodities-gold-commodities\/copper\/"},"img":{"alt_text":"Spot Gold","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-01-12-gold.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-01-12-gold.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2026\/2026-01-12-gold.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/61539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=61539"}],"version-history":[{"count":5,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/61539\/revisions"}],"predecessor-version":[{"id":61545,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/61539\/revisions\/61545"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=61539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=61539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=61539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}