Time and price

As an investor, you shouldn’t be surprised to hear that I use Elliott Wave Theory to help me think about where we are in cycles, and specifically, the pattern of price movements that attach to individual assets over time – by Undercover Investor

For those that do not know Elliott Wave Theory, I can’t do even a half decent job in a few words here. What I can do is say “please go and research it”, because over time it really can be insightful and even highly accurate in forecasting shorter term share price movements.

For proponents of long-term ‘cycle investing’, many will argue that WD Gann was the master of assessing the longer-term cycles (though he studied short term cycles as well). Again, I haven’t space to explain and provide credit at the level that I think is due, given that WD did not have access to all the systems and knowledge that we do today. He used pencil and paper and, I believe, probably understood his trade all the better for it than we might do today by relying upon our black boxes.

I have always found it amusing that the most well used investment software (institutionally at least) almost advertises that it is just one big black box by displaying everything against a black background! WD’s track record was good enough that I would encourage you to be quite thoughtful about his insights, even though they were derived in the 1920’s and 1930’s.

Time, price and predictability

The essential ingredient that ties both Gann and Elliot Wave theory together is to understand that time can be more important than price, and that both can move in predictable ways.

If this is a rather long and boring introduction, let me make it a little punchier. If you’re a proponent of Elliot Wave analysis, or a follower of WD Gann, (or even the famous 1875 Samuel Benner work that you must have seen) you should have already worked out that 2026 is a notable year for investors. If not, buckle up.

I was brought up to believe that technical analysis was ‘hocus pocus’ and was not worthy of a professional ‘bottom-up’ investor’s attention. It has bothered me throughout my career that on almost any look back basis, one can see the cycles quite clearly in both the short and the long-term. Rubbishing such technical analysis is therefore somewhat tricky.

Politics and price

Writing to you in the second week of February 2026, I have to say that I am growing increasingly nervous of political and economic developments across the world and how these might show up in asset prices. So rather than use just my ‘gut feel’ (which in fairness it has done me well for many years) I thought I should take account of what the cycle gurus say.

Looking at Gann and taking a simple average of cycle projections from here suggests that it might be time to de-risk a little. The major cycles upon which he relied most, the 20, 30 and the 60-year cycles all suggest to me that if they were to repeat, it is going to get a little uncomfortable for the shorter-term investor.

Talking of being uncomfortable, are you invested in Bitcoin? I have argued before for a small holding in a large, diversified portfolio (please note, not “a large holding in a small portfolio”!) but clearly, with drawdowns such as these, which go against my expectations based upon financial and liquidity cycles, it has been pretty uncomfortable to hold such a highly volatile asset. Let me acknowledge that there will be some readers here that don’t believe it is an asset at all of course!

We’ve been here before

We are not able to apply WD Gann 20/30/60-year cycle analysis to an asset that has not even existed for the shortest of these time periods, but we can apply some Elliott Wave Theory if we so choose. Bitcoin produces some wonderful cycles, and remember, it has been here before.

The extraordinary performance of silver recently might be of interest to readers too. Elliott Wave analysis might well have warned you that parabolic 3^rd waves can end up in deeply uncomfortable 4^th waves, especially if the players are leveraged. Which in this case they most certainly are!

Better news for some might be that the 4^th wave is usually followed (if the pattern holds) by a 5^th, which could take the metal comfortably beyond the highs of the 3^rd wave. If you invested in the hype and in the last stages of that 3^rd wave when prices went almost vertical, and are now nursing some losses, looking at Elliott Wave theory whilst hoping for a 5^th wave might be a useful way of spending your time.

Gold, silver and other precious metals

The same pattern can also be seen in gold, which has also confounded many with its price appreciation. I suspect that we have seen the short-term top of a 3^rd wave (in Elliott speak) but not its long-term high which could follow a 4^th wave correction.

Looking at gold, silver, and other precious metals (especially copper), I dare to still say that they are all fundamentally important, (for slightly different reasons) and I see no reason to doubt that they are a longer-term hold, even if they go up and down a bit on the journey higher. They have performed remarkably well recently, and a 4^th wave pullback might be rather healthy. It might give one time to catch one’s breath and reload so to speak.

Diversify

Bitcoin, almost the mirror opposite in recent performance terms, could possibly be at the bottom of a corrective wave, so could now confound expectations and be stronger when other high beta stocks are starting to suffer a period of extreme volatility (double digit moves in in a single day in Microsoft and Broadcom, to name but two, will already be too uncomfortable for many).

Sadly for some, we have to wait to see the wave confirmed before knowing where we stand. It all goes to the value of not having all one’s eggs in one basket and understanding where we are in the cycles. Perhaps not the way crypto investors think which is why so many were carried out in October 2025. Be diversified I continue to argue. Especially in periods of increasing volatility.

If you’re clever, you can trade these cycles (and the cycles within the cycles) and I know several that do. A very few of them are extraordinarily successful, but it is only ‘the few’ that are. I personally prefer trying to get one key question right at the outset ‘Is this asset likely to appreciate over time for good reason rather than just speculation’? If I conclude that it should, then I would buy and hold through the waves whilst keeping the question top of mind. To that, I have learned to look at the cycles.

Without being alarmist, the next few weeks might be the time to decide whether you are a long-term or a short-term participant in the markets. We can be certain of one thing: the black boxes that drive institutional behavior are short term, and most won’t be thinking about time and price in the way that you can.

Published by our friends at:

The post Time and price appeared first on USNewsRank.