The Signal Before the Fall: When Momentum Breaks First and Why Silver May Enter a New Reality

Michael Oliver joins our Podcast to argue that market momentum has already snapped beneath U.S. equities - just as it did ahead of 2000 and 2007 - and that the next great rotation won’t be into bonds or Bitcoin, but into monetary metals, with silver poised to sprint ahead of gold as a rare “spread breakout” triggers a regime change.

Momentum Breaks Before Price: The Hidden Sell Signal in U.S. Equities

Every market leaves tracks before the avalanche. Most investors don’t see them; they stare at the price and miss the moment when momentum, the current running beneath the surface, quietly changes direction. Michael Oliver has built a career following those internal currents. His message today is simple, unnerving, and clarifying: the S&P 500’s backbone - on long-term momentum - broke in January 2025.
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Price later made marginal new highs, what he called the "tease", but momentum did not. That divergence is Oliver’s red flare. In his framework, you plot monthly bars against a rolling three-quarter average, creating an oscillator that reflects the market’s structural strength rather than the money-unit-distorted price alone. In January, that oscillator broke a two-year uptrend channel. The market’s heartbeat changed—before the headline price did.

“We broke the backbone in January. Price made a teasing new high—momentum did not.”‍

Oliver’s historical rhyme is unsettling. In both 2000 and 2007, momentum cracked first; only then did price float to a fresh high, seducing trend followers before the real decline began. He calls those late highs “the trap.” And he adds: leadership has narrowed from “Mag 7” to something closer to “Mag 3,” a classic end-of-cycle tell.
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Narrow Leadership and Retail Leverage: Echoes of 2000 & 2007

The present bull is the longest and most extended of the modern era - roughly 16 years of ascent since 2009 for the S&P 500 and Nasdaq 100. Prior booms - late 1920s, early 1970s, late 1990s - ran hot for half a dozen years before cracking. This run was supercharged by suppressed rates and explosive money supply growth (M2). Oliver argues that on a 75-year view, even 5% policy rates count as cheap fuel.
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At the same time, retail positioning and margin are stretched. Retirement accounts and brokerage statements became national mood rings in 2025: “green” equals confidence. Take those gains away late in the year, Oliver warns, and emotion arrives right on time. Oliver notes,

“Both tops in 2000 and 2007 teased investors with higher highs after momentum broke. That’s the trap.”

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Fragile Pillars: Financials, Consumer Credit, and Bitcoin’s Risk Mirror

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Where might the first breaks show? Oliver points to financials: many big banks share a similar, fragile structure - just a few percent below current marks sits the kindling for “stories.” He also flags consumer-credit proxies—Visa and MasterCard—as “dancing a percent above” quarterly momentum levels that could force a sharp downside push if breached. None of this is a fundamentals rant; it’s a structure rant. When emotional leverage and thinning leadership meet brittle momentum scaffolding, price gaps can follow.
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Then there’s Bitcoin. For several years, its monthly pattern has tracked the Nasdaq 100. Whatever it once represented to purists, in market structure it now moves like a risk-tech twin, embedded in the same liquidity and sentiment loops. If Bitcoin breaks sharply, Oliver argues, and you impact equities - not because they share cash flows, but because they share emotion. According to Oliver,

“Bitcoin is now the Nasdaq’s twin—embedded in the same emotion. Break it hard and stocks feel it.”

Bonds and the Dollar: Broken Safety Nets for the Next Drawdown

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Historically, flight-to-safety meant Treasuries. Oliver isn’t convinced they’ll save you this time. After the 2020–2023 bond bear, the 30-year future has built a flat, heavy base. Each breakout attempt fizzles. He marks 116–118 as tactically important - and warns that prints toward 111 could trigger policy panic rather than portfolio comfort. In that scenario, the Fed and its peers reach for the only lever they truly own: easing.

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The U.S. dollar index (DXY), meanwhile, shows a broken long-term momentum structure. Price has chopped in a tight range, but Oliver’s multi-year oscillators say the backbone is already cracked. A resumption of dollar weakness would amplify equity losses for foreign holders (currency translation cuts both ways) and push more capital toward non-credit, non-duration assets. Oliver predicts that,

“If T-bonds print 111, expect policy panic. They’ll cut. They’ll print. They always do.”

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Gold’s Secular Case: Why a New Pricing Regime Is Plausible

Gold, Oliver argues, has already told the truth. It refused to roll over during the equity air-pocket in early 2025 and continued to grind higher. On a long-term log-scale view, the last two secular gold bulls each made ~8-fold moves from trough to peak. If the current cycle simply matches the dimension of those prior legs, his charts imply a path toward $8,500 gold. So, Oliver isn't really making a wild projection, but in his mind a proportional target.

The more policy relies on money creation to paper over debt and duration shocks, the more gold - the non-policy asset - becomes the natural sink for capital looking to sidestep credit and counterparty risk. As Oliver puts it, gold “knows” there won’t be monetary restraint if equities break and bonds wobble.

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Silver Spread Breakout: The Regime-Shift Trigger Most Investors Miss

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Oliver’s most urgent signal isn’t about gold at all - it’s about the spread between silver and gold. He studies the relative performance (silver/gold) as its own tradable object and, crucially, its momentum. Three facts frame the opportunity:
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• Silver currently trades around ~1.125% of gold’s price (~80:1).
• In 21 of the past 50 years, silver has traded at ≥2% of gold’s price (~50:1).
• In bull accelerations (1979–80, 2010–11), silver ran at ≥3% (~33:1).

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What matters now: Oliver says the momentum of the silver-gold spread has already broken out; a monthly close above ~1.31% likely ignites the slingshot - silver sprinting while gold continues higher. That’s the regime shift: from a world where silver plods behind to one where it reprices quickly to a higher reality.
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He pushes the idea further: the equity expression of that move is silver miners. His ratio work shows silver miners breaking out vs. gold miners—often a leadership tell before the metals’ own ratio confirms. If you’re expressing the metals via equities, the silver-miner overweight has structural support.
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Commodities and Stagflation: Rotation Into Hard Assets When Stocks Crack
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Beyond the monetary metals, the Bloomberg Commodity Index has churned sideways for more than two years - coiling beneath an upside momentum trigger. Historically (late 1970s is the canonical case), commodities can rise into recession while equities fall, because the flow of funds avoids duration risk and seeks collateral. Even laggards like oil often catch up once the broader index breaks out.
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Oliver emphasizes that this shift will not be a one-month pop - it’s a new pricing reality. Silver, remarkably, has spent nearly fifty years capped by a horizontal range touching its 1980 and 2011 peaks. Think of it as a spring wound for decades. When it snaps, the new range can be much higher - with pullbacks occurring within that higher regime, not back to the old world. At least according to Oliver.
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A High-Risk Macro Playbook: What to Watch, What to Weigh
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If your still reading this, you aren't a tourist to these markets. There is a good chance, like us, you operate at the junction where policy, geopolitics, and liquidity collide - and you need tests you can monitor, not crystal-ball stories. Oliver’s framework offers precisely that:

• ‍Equities (Trap Test): Accept that a bear market can unfold after price makes “new highs.” In his map, the January S&P high (~6147) is the pivot. Lose it decisively and even “price-only” technicians will see the problem.
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• ‍Financials & Credit (First-Break Test): Watch the bank cohort and Visa/MasterCard. Their quarterly momentum floors sit perilously close. Breaches here create the “surprise from the side” that jolts emotion.
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• ‍Bitcoin (Risk-Twin Test): Treat it as a Nasdaq proxy. A sharp Bitcoin break isn’t a hedge; it’s a risk-off amplifier into equities, given their shared emotional circuitry.
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• ‍Bonds (Failed-Refuge Test): Track 30-yr futures near 116–118; sustained slippage toward 111 signals policy panic over “safe-haven” comfort.
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• ‍Dollar (Tailwind Test): The broken long-term momentum in DXY turns FX into a second-order risk for global equity holders and a tailwind for monetary assets.
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• ‍Gold (Secular Map): The $8,000+ dimension projection is a map, not a promise. The more policy leans on printing, the stronger the non-policy asset bid.
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• ‍Silver (Trigger Test): The spread trigger - ~1.31% on a monthly close - is your siren. Historically, once confirmed, silver races toward 2% (50:1) and, in raging bull markets has historically reached 3% (~33:1). That’s a radically different world for silver pricing, miners, and optionality.
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• ‍Miners (Expression Choice): If you’re equity only, Oliver’s work supports silver miners > gold miners on a relative basis during the acceleration phase.
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Why Price Lies and Momentum Tells the Truth (According to Oliver)

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Traditional price charts are measured in money units that expand and distort over time; they can flatter assets that merely keep pace with M2. By anchoring analysis in momentum vs. a dynamic mean (e.g., 3-quarter, 100-week), he seeks to filter out some of that distortion and focus on the asset’s internal dynamics - how aggressively it’s being repriced relative to its own trend.
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In this lens, tops and bottoms telegraph themselves with clean momentum structures before price admits the truth. That’s why he was able to turn bearish months after the 2011 gold high based on a blown annual-momentum ceiling, and why the February 2016 upside break on annual momentum marked the new secular bull - even as price action still looked messy.

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What Could Invalidate the Precious Metals Bull?

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Oliver says very little threatens gold/silver now because the nearest momentum ceilings sit far below current levels. Could gold drop a few hundred dollars and still be fine structurally? Yes. In his framework, momentum almost always breaks first; until you see major momentum structures form near the market and then fail, the primary trend remains up. For silver, the bigger risk is investors under-positioned when the spread finally closes above ~1.31% - because the acceleration window can be measured in months, not years.

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Final Turn: Half the Move in Six Months

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The dangerous beauty of late-stage bulls is that the end feels wonderful - right up until the edge. Oliver’s map gives you a non-emotional checklist: if financials crack, if Bitcoin trades like risk (not refuge), if bonds fail their rescue act, if DXY resumes its longer slide - and if the silver-gold spread closes the month above ~1.31% - then the next six months could contain half the move.

That’s not when you try to be clever. That’s when you hope to be positioned - on the right side of the new reality the market is writing, in real time.

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^{This article is for informational and entertainment purposes only and should not be construed as financial advice. The views expressed by Michael Oliver are his own and do not necessarily reflect those of Pinnacle Digest. Always conduct your own due diligence and speak with a licensed financial advisor before making any investment decisions.}