ALL THINGS BIG AND SMALL 2.0

 1974 EPIPHONE CASINO vs GIBSON ES335 Many guitar enthusiasts regard the Gibson ES335 as the king of hollow body guitars that are in between Strats, Les Pauls and Teles and the full-size jazz archtops. But there is one guitar that in my opinion is better than the ES-335- the iconic Epiphone Casino. First popularized by the Beatles, it is still being used by many well-know musicians from Oasis' Noel Gallagher to Rolling Stone's Keith Richard and Gary Clark Junior. Unlike the ES335 which has a center block in its body to damp the feedback, the Casino is fully hollow. Together with its P90 pickups, this gives the Casino a unique edgy yet woody tone that is eminently suited for modern music. My 1974 MIJ Casino is a beautiful guitar, with fine wood grain, pickups with a slight covering of patina, and wonderful electronics. It is a blue sticker pre-Elitist Casino -much rarer than the beige and orange sticker MIJs. The 1992 Gibson is also a very playable guitar with the ability to get...

 It is only with the USA-Iran War and the closure of the Strait of Hormuz that we realise how crucial crude oil and natural gas are to the modern day economy. I didn't know that fertilisers need the  methane from natural gas. And that semiconductor manufacturing requires Helium the supercoolant. Take a good look at the infographic from the Straits Times Singapore. 

 The above image shows two heatmaps (one with a 104 week rolling window  to capture the correlation and the other with a 26-week rolling window) of economic and financial  market variables that are known to be correlated with the price of Silver. By looking at the change in the degree of correlation of each variable in the 26-week heatmap from the 104-week heatmap, we can get a sense of the probable directon of each variable in the next few weeks. Data & Method Frequency: Weekly (W-FRI). Transforms used before correlation: • Silver, S&P 500, Gold, Brent, USD proxy: weekly log returns • M2: weekly log change • 10Y Treasury yield: weekly first difference (percentage-point change) Heatmap coloring: Fisher z-transform z = atanh(r) applied to the correlation matrix for improved visual scaling near high |r|. Cell annotations show the raw Pearson correlation r for interpretability. Tickers / Series:  Yahoo Finance: SI=F (Silver), ^GSPC (S&P 500), GC=F (Gol...

  A LESSON FOR THE USD. My Spade and Knife money and Zimbabwe 100 trillion-dollar note are examples of what happens to money when it is not based on a physical asset with inherent value and no counter-party risk such as gold and silver (or bronze in the case of the spade and knife money).  When in 221 BC the Qin Emperor Shih Huang Ti united all of China, he decreed that all the seven States (Qin, Qi, Zhao, Chu, Wei, Han, Yan) shall use a new standardized bronze coin (see image below: the round coins with sqaure holes in the middle)  The old knife and spade money in its various forms could be exchanged for it based on the weight of their metal content. On the other hand, the Zimbabwe 100 trillion-dollar note was printed into existence (just as the Fed prints into existence new USD) with no physical backing whatsoever in January 2009 but was abandoned just three months later because people did not trust it and refused to accept it for trade and daily use.  Under the 19...

 

Understanding what percentage of the current price action is noise-driven and what percentage is fundamentals-driven helps prevent emotional/panic response to volatile market swings. The metric used is a Haar Wavelet* that is efficient at separating noise from true signal without being whipsawed.   The fundamentals underpinning gold are: safe-haven asset, hedge against inflation, a component of country foreign reserves, monetary metal, increase in demand from China and India The fundamentals underpinning silver are: industrial demand (Solar panels, EV batteries, semi-conductors, defence [missiles, communications, drones] medical devices); increasingly becoming a monetary metal like gold, severe production deficit for continuous 6 years ; 70% of silver is a by-product of Zinc, Copper, Lead. Increase in demand from China and India.   Key Takeaways - Silver noise is 3.2x higher than Gold (12.8% vs 3.9% of price) -Both metals are undervalued vs their fundamentals — Silver by ...

 ARE WE REALLY GOING TO HAVE A CRASH BEFORE MID APRIL? SEE CHARTS BELOW.  HeatMap shows at the moment main determinant of gold, silver price is negative correlation with USD (DXY)

TOO GOOD TO BE TRUE? BUT THE MODEL PERFORMANCE DIAGNOSTICS ARE SO GOOD. (SEE LAST PARAGRAPH BELOW) WE SHALL SEE, WE SHALL SEE. EVEN IF Q50 IS ACHIEVED I AM SET FOR LIFE!   The most immediate impact of the current USA/Israel-Iran war has been the sharp rise in oil and LNG prices as Iran closes the Straits of Hormuz. According to the latest announcements by the US, Israel as well as the Iran governments, the war may likely continue for at least a few weeks or even a few months. I want to see if I can model the impact of changes in the macroeconomic environment which the war will inevitably cause, on gold and silver prices in 60 days from now.  This is a departure from my usual models using just XAUUSD, XAGUSD price data. The macroeconomic variables input variables are:  1. Inflation (FRED Core PCE) 2. The US Dollar (FRED nominal broad dollar Index DTWEXBGS 3. 10 -year Treasury yields 4. Equities (stock market) S&P500 The impact on gold and silver prices will dep...

  The media is reporting that investors are showing heightened interest in Gold, Silver and Platinum as alternatives to savings deposits, annuities and stocks. Here is a primer.  Gold, silver, and platinum are classified as precious metals because they are naturally occurring elements defined by three primary criteria: rarity, high economic value, and chemical resistance (for various industrial ushes). GOLD (XAUUSD) -Current Price: $5,108.25 USD (as of Feb 20, 2026) -Reserves: Relatively scarce; estimated 50,000 metric tons of economically viable reserves remaining globally - Mining: Primarily mined directly from gold ore deposits through open-pit and underground mining; also recovered from placer deposits - Top Producer: China (approximately 11% of global production), followed by Australia and Russia) - Investment Role: Premier safe-haven asset, inflation hedge, currency debasement protection, central bank reserve asset, portfolio diversification - Industrial Usage: Electroni...

 

 A BIG THANK YOU TO EODHD.COM FOR DATA ON SPOT GOLD AND SPOT SILVER/ As analysed by ourWavelets Noise vs Fundamentals model, above chart is self-explanatory.  Its shows how Gold is less prone to attacks by speculators, and therefore more resilient. Silver price on the  other hand is very noisy, and therefor much more volatile. The distance of the blue line above the pink rectangle shows how much safer Silver is.   The column distribution below shows how extreme Silver price movement is compared to Gold.  Silver is 4 x more noisy than Gold. The Table below shows you that currently Silver is undervalued and Gold is fair value. The choice depends on your risk appetite and investing philosophy. 

A BIG THANK YOU TO EODHD.COM FOR PROVIDING THE DATA FOR THIS POST XAGUSD Flash Crash Analysis - January 30, 2026 Crash Verdict: 109% Noise-Driven - Fundamentals Intact Price Drop: $117.63 → $111.12 (-$6.51, -5.5%) Attribution:Fundamental Change: +$0.57 (fundamentals ROSE during crash) Noise Change: -$7.08 (speculative bubble collapsed) Current Status (Jan 30) Fundamentals: $107.24 (strengthening) 30-Day Trend: $0.74/day ↑ (accelerating) 10-Day Momentum: $6.42 (strong, well above $3 threshold) Daily Change: +$0.57 (positive) Noise: $3.88 (collapsed from $10.96) Price now only 3.6% above fundamental Noise at 93rd percentile (last 60 days)

Table 1 Chart 1 If we are able to measure and differentiate Noise from Fundamentals, it can be useful for investing . Using the spot price of Silver as a case study, we use Wavelets to measure what portion of the price movements (whether up or down ) is due to Noise (N ) and what portion is due to Fundamentals( F). We define Noise as Speculative Activity and its Residual (remainder) as Fundamentals.    About Wavelets  Wavelets are a powerful mathematical tool for cleaning noisy time-series data, such as stock prices or medical heart rates, because they can simultaneously identify when an event happened and what its frequency was. Unlike traditional statistical measures like the Fourier Transform—which views data as an endless series of smooth waves—wavelets use "mini waves" that start and stop quickly. This unique "multi-resolution" capability allows them to surgically remove high-frequency random noise while preserving sharp, abrupt changes in the data, such as a s...

Introduction Traditional financial models assume markets are efficient, linear, and predictable. But real markets behave as Complex Adaptive Systems (CAS) - networks of interacting agents that self-organize, adapt, and generate emergent patterns. Using synthetically-generated data to mimic the price of a financial asset, this article examines eight key properties that distinguish CAS from traditional equilibrium models.  1. Path Dependence Markets exhibit path dependence: different sequences of events lead to different outcomes, even from identical starting conditions. History matters because early events can "lock in" trajectories that constrain future possibilities.   The visualization shows five simulated price paths starting from the same point. Despite identical initial conditions, different sequences of regime shifts and shocks cause the paths to diverge dramatically. By day 500, outcomes range from 40% losses to 150% gains - demonstrating that the order and timing of e...

A BIG THANK YOU TO EODHD.COM FOR PROVIDING WITH ACCESS TO THEIR FINANCIAL MARKETS DATA: XAGUSD AND XAUSD ! Above is the probability heat map for Silver. It covers the price range USD70.00 to 90.00. As you can see, the forecast is optimistic. Even 09 and 10 Jan re-balancing of Bloomberg Commodity Index where Silver's current weighting of 9% has been rebalanced to its allocated 4% has not dampened the bullishness. As of US market close on Friday 09 Jan, spot Silver is 79.84. So probability of 90.00 being achieved in current forecast horizon is achievable.   Below, the is day-by-day quantile forecast table to serve as a guide for your investing: And here is how the probabiltues for HitAnyDay and CloseAboveOnDay20 are calculated. SILVER FORECAST PROBABILITY CALCULATIONS 1. Monte Carlo Simulation Setup We run 1,000 simulations of silver price over 20 business days. Each simulation: Starts from the last observed price Uses ARIMA model for expected return Uses...

The previous forecast was almost on the dot: See https://ngtiankhean.blogspot.com/2025/12/spot-silver-updated-forecast-till-31.html  The current forecast is for each day from 05 Jan to 30 Jan 2026. I consider this forecast "Interim" because there are many exogenous factors during this period that may come into play which we cannot model and will make this forecast irrelevant. Among them: impact of China's export control, Bloomberg will also rejig the  weighting for Silver in its Commodity Index due to Silver's outperformance, COMEX declares force majeure and pays in cash if it cannot make physical delivery, the bullion banks may exit all Silver positions even if they incur losses. The Model For those who want to know: I use GARCH, ARIMA, 1000-trials Monte Carlo Simulation and Quantile Projections. The data is fitted to a Student-t Distribution to better accomodate tail risks. The Distribution is diagnosed for Fit with Aike Information Criteria (AIC). Also, ARIMA Resid...