Welcome To the Stock Synergy, Momentum & Breakout HUB On AGORACOM

Edit this title from the Fast Facts Section

Free
Message: uncommwisdom comments

October 24, 2011
Important year-end signals!
by Larry Edelson

Dear Subscriber,

Good morning! I'm on my way back to Bangkok, some 40,000 feet over the North Pole as you read this column. I'll be back online Tuesday afternoon, but let me tell you right now, virtually all markets are shaping up for some pretty wild moves as we head into the end of the year.

So much so, that I've decided I want you to have some very important technical signals for year-end. I've borrowed some of today's content from my October Real Wealth Report which published last Friday.

In particular, I'm going to give you my important leading indicators for year-end moves in many major markets, and what those indicators mean.

I can't give you all the signals, mind you, nor the complete analysis and recommendations I gave my Real Wealth Report subscribers in the October issue. Naturally, those specifics are reserved for members.

Nonetheless, I want you to have some of the important observations I made in that issue. Hence, what follows are what I call my "momentum ranges" for 2012 for each of the most important markets.

The momentum ranges tell you, in no uncertain terms, whether a market is positive, or bullish in momentum on an annual basis; is neutral, or bearish in momentum.

This is important for it lets you know where the market's "energy level" is, so to speak, and whether or not it has a long-term bullish or bearish bias to it.

But there's more to it than just momentum. Also important are my annual trend indicating ranges, which tell you precisely what the trend is for each market as we head into the end of the year and for the coming year.

As I mentioned earlier, these are numbers I simply cannot give you. I base many of my specific recommendations on them, and by releasing those ranges to you I would be violating a cardinal concept of what my Real Wealth Report members pay me for. I'm sure you understand.

Nevertheless, the momentum ranges are critical and useful, and I want you to have them. I suggest that you print out this column and keep it by your side for the next couple of months as we head into year-end.

Let's get started, first with ...

External Sponsorship

The I.R.S. Will Hate This, But it's Perfectly Legal

U.S. Treasury TIPS are virtually a scam. They're supposed to be indexed to inflation, but considering that the government's "official" inflation numbers don't include energy and food, they're always woefully too low. And since TIPS adjust with official inflation and not real inflation, investors fall behind more and more every year.

The world's wealthiest investors have known this for years and use their own "Privatized TIPS". They've enjoyed a steady stream of income from their own Privatized TIPS program.

This has been their secret ... until now.

A new guide shows you exactly how to set up your own Privatized TIPS program, no matter how much money you have to start with.

Click here for more about Privatized TIPS.

Gold. 2012 Momentum: $1,243.60 - $827.50. Clearly, with gold trading at the $1,620 level right now, it remains hugely positive in momentum as we head into the end of this year.

Plus, as long as it closes above $1,243.60 at year-end, it will be positive in annual momentum for 2012 as well — which is entirely consistent with my forecast that gold remains in a long-term bull market.

But, and importantly, gold is WAY above the upper range of the momentum figure at $1,243.60 — which also suggests that a correction is way overdue. That's one of the reasons I've been short-term bearish lately and will likely remain bearish (as long as gold remains below $1,705 on a weekly closing basis).

Bottom line: Gold should NOT be purchased right now.

Instead, as I've mentioned in previous columns, hedges should be in place, and you should also be prepared to buy or add to gold positions when this correction is over.

Silver. 2012 Momentum: $19.78 to $10.77. Like gold, silver is in a long-term bull market with strong upward momentum. But short term, it's far more overextended than gold is, and it is still vulnerable to a correction all the way down to test major support levels.

Yes, major support lies at the $19.78 level. But I do not expect silver to fall that low. Technical (chart) support lies at the previously published $25 and $23 levels, which I do expect to be tested heading into year-end.

Once those levels are tested, I expect silver's long-term bull market to resume.

U.S. Dollar Index. 2012 Momentum: 93.89 to 77.01. Currently trading at the 77 level as I pen this issue, the U.S. Dollar Index is trying to hold a neutral annual momentum indication.

It's a bit too early to say, but I do expect the Dollar Index to hold the lower number, 77.01, heading into year-end. If so, it would be fully consistent with my forecast that the dollar has entered a counter-trend bounce, one that could easily carry into 2012 — on the backbone of the crisis in the euro.

But don't get overly bullish on the dollar. As sometime in 2012 I expect to see the dollar slide back into a negative momentum position and turn bearish again as the sovereign debt crisis begins to fully hit the United States.

The Euro. 2012 Momentum: 1.5069 to 1.2368. Naturally, the euro should be virtually the mirror image of the Dollar Index. Currently trading at the 1.37 level as I write this issue, the euro is neutral in momentum heading into year-end. However, based on other indicators I monitor, I do expect the euro to roll over from a bull market to a bear market, and before the end of the year.

That means we face the potential for a very sharp move down in the euro to quite possibly the 1.2368 level in the weeks ahead. Stay away from the euro at all costs right now.

Crude Oil.2012 Momentum: $93.89 to $77.01. At current price levels, crude oil is neutral in momentum, fully consistent with my view that oil is largely in a wide trading range right now.

A fully re-established bull market in oil would require it to close 2011 above the $93.89 level. I do not see that happening, just yet. I do see it happening, however, in 2012 — when the dollar resumes its long-term bear market.

Copper. 2012 Momentum: $3.53 to $1.60. Currently trading at $3.16, copper's previously strong bull market is waning. It would take a year-end close back above at least the $3.53 level for copper to reestablish some upward bias to it. Short of that, copper is likely to drift lower into year-end.

As a commodity that's extremely sensitive to what's happening in the global economy, it's hardly surprising that copper is weakening. I expect that to continue into 2012, with copper bottoming when the dollar peaks out. Long-term investments in copper are not suggested at this time.

Now, on to the major U.S. stock markets ...

The Dow Jones Industrials. 2012 Momentum: 14,232 to 12,232. In short, the Dow is currently neutral in momentum, suggesting a downward bias heading into the end of this year.

The Dow would only turn positive if it were to finish the year above the 14,232 level. I do not see that happening this year (but do see it happening by year-end 2012).

As I mentioned in prior columns, I do expect the Dow to head lower into year-end, and to test and break the 10,668 level. This would set it up for two moves in 2012 ...

1. A test of major support at 9,034 and 8,000 and then ...

2. A major rally out of that low that forms to close 2012 above 14,232.

This scenario is fully consistent with my other indicators which show that the U.S. economy is dramatically weakening — and with my long-term forecasts that when the bear market in the dollar resumes, stocks will reinflate (again) to the upside.

Best way to play the above: Steer clear of almost all stocks right now, take a short-term bearish position, as I've recommended in previous columns ... conserve ammo ... and be prepared to go aggressively long the U.S. stock markets sometime next year!

Ditto for the S&P 500 Index and the NASDAQ.

Last but certainly not least ...

U.S. 30-year Treasury Bonds. 2012 Momentum: 126 19/64 to 100 31/32. This market has the potential to shock most investors heading into year-end, and certainly in 2012.

Based on the above momentum range and an assortment of other indicators I use, I believe the U.S. bond markets are a disaster in the making; they are topping out in what could prove to be one of the biggest bubbles of all time.

I've been warning about a massive bear market in bonds. I believe it's almost here, if not here already. Steer clear of bonds at all costs!

Best wishes, as always ...

Larry

P.S. For my complete analysis and forecasts for important market moves as we head into the end of the year — and my very specific recommendations on how to profit from them — become a member of my Real Wealth Report.

At just $89 a year, it truly is a freaking bargain. Plus, you'll be able to get the October issue that just published, and all the information and recommendations it contains. Click here now to join.

About Uncommon Wisdom
For more information and archived issues, visit http://www.uncommonwisdomdaily.com

Uncommon Wisdom (UWD) is a free daily investment newsletter published by Weiss Research, Inc. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. We cannot guarantee the accuracy of third party advertisements or sponsors, and these ads do not necessarily express the viewpoints of Uncommon Wisdom or its editors. For more information, see our Terms and Conditions. View our Privacy Policy. Would you like to unsubscribe from our mailing list? To make sure you don't miss our urgent updates, just follow these simple steps to add Weiss Research to your address book.

Attention editors and publishers! Uncommon Wisdom content may be republished with a link to the full story on UncommonWisdomDaily.com. Such republication must include attribution with a link to the Uncommon Wisdom home page as follows: "Source: http://www.uncommonwisdomdaily.com"

Weiss Research, Inc. | 15430 Endeavour Dr. | Jupiter, FL 33478 | 1-800-291-8545

Share
New Message
Please login to post a reply