Dear Subscriber,

Last week we certainly had some game-changing events, with the German court ruling in favor of the European Stability Mechanism ... Europe going ahead with yet more bailouts ... and, perhaps more staggering, Fed Chairman Ben Bernanke committing the Federal Reserve to buying $40 billion worth of mortgage-backed securities each month on an open-ended, unending basis until employment improves.

These are possibly game-changing fundamentals for the markets.

They’re entirely consistent with my longer-term views of monetization of debt, commoditization of not just commodities but stocks as well, and monetization of paper money (or fiat currencies) by levitating and re-flating financial assets and tangible assets much higher over the longer term.

So with that in mind, we’re going to take a look at some weekly charts.

Although there have been some game-changing events in the last week or so, they have confirmed my longer-term views on longer-term bull markets in commodities and stocks.

However, I am not convinced that the recent rallies are the beginning of those long-term breakouts. So let’s take a look at this weekly chart of gold.

We’ve seen a significant rally in gold; yes, I missed it. But the real breakout in gold will not come until we see a close above roughly the $1,810 level, which would be a cyclical breakout.

That would be your sign that new highs are coming and the bull market that will take gold to $5,000-plus over the next two or three years is here.

But we do not have that yet, so I am still very cautious on the long side of gold.

If you have long-term core gold holdings, hold on to them. If you don’t, then you should be buying on a breakout and monthly close above $1,810 or on the next pullback.

And you’ll want to stay very close to my Real Wealth Report and my other publications because we are reaching some critical turning points in the markets.

Now let’s take a look at silver.

It’s pretty much the same thing in silver. We got a significant rally, one that caught me flat-footed.

However, we don’t have a full-fledged breakout yet. That would require a close roughly above the $37 level in silver above the cyclical downtrend line here, and we don’t have that yet.

Until we get that, I’m not ready to buy silver. I would prefer to see a pullback and buy that pullback before loading up on silver.

Now let’s take a look at the Dollar Index.

As you can see from this weekly chart, the Dollar Index has drifted down to the rising bottom of an up-channel. It needs to hold here, and I believe it will hold here, and it will possibly move a little bit lower to the lower boundary of its second channel.

The dollar will not enter the next phase of its bear market conversely to gold and silver until we see a break below this level on a closing basis.

So in the short term, it looks like gold and silver and even stocks are taking off to the upside and the dollar’s breaking down. But I’m not so sure yet.

What we’re seeing is largely an implicit glimpse of the future and what these markets are capable of on a long-term basis. But we’re not 100% there yet in terms of breakouts in the metals or stocks. That is not 100% confirmed yet, so please do be careful.

Next let’s take a look at the Dow Industrials on a weekly basis.

The Dow has been very, very strong — again that’s a glimpse into the future on how bullish the U.S. stock markets can be, based on monetization of debt by the Federal Reserve. But we’re not there yet.

Your signal for an all-out new bull market in the Dow Jones Industrials and the S&P 500 will be a close above the previous record high at Dow 14,198.

We’re not there yet, as you can see we are facing formidable resistance between 13,500 and 14,200. We could get as high as 14,200 and then pull back. But we are not in the new leg of a new bull market in the stock market until we get a close above 14,198 in the Dow Jones Industrials.

OK now, please stay tuned to everything I write and comment upon going forward this year. The final quarter of this year — with the elections, the fiscal cliff and the Federal Reserve monetizing debt — is going to be a doozy. So please do stay tuned.

Best wishes,

Larry

P.S. Too many investors get emotional and frustrated by the markets, with short-term moves often tripping them up, and it costs them dearly. Don’t let that happen to you.