Cycles Hitting Now!

It’s been a long, hot, dreary and boring summer for most markets — with some of the tightest trading ranges and lowest volatility seen in decades.

Blame it on whatever, the heat, the elections, diminished investor confidence — it doesn’t matter. All that matters is …

A. We now have some of the tightest-coiled markets, ever, springs ready to explode. And …

B. Short-term cycles now pointing to those springs ready to produce explosive trends in many markets.

Put another way, all that sideways trading of the past several months is finally coming to an end!

And per my recent columns, you should know my forecasts:

For gold and silver, sharply lower into early October.

For the U.S. dollar, sharply higher into the end of the year.

For U.S. and European stock markets, sharply lower into October/November.

For those of you who like my AI charts, here’s an updated montage of gold (silver’s chart is similar), the dollar index and the Dow Industrials.



Click image for larger view

If it were me, as I noted in last week’s column …

I would hedge any gold and silver holdings you may have with inverse ETFs. For gold I would consider ProShares UltraShort Gold, symbol GLL, which is already popping higher.

For silver I would consider ProShares UltraShort Silver ETF, symbol ZSL, a double leveraged ETF, seeking to deliver twice (2x or 200%) the inverse (or opposite) return of the daily performance of silver bullion in U.S. dollars. Already smoking hot!

Hedge any gold and silver holdings you may have with inverse ETFs.

For the Dow Industrials and the S&P 500, I would consider ProShares Short Dow30 ETF (DOG) and the Direxion Daily S&P 500 Bear 1X Shares (SPDN), both unleveraged.

Lastly, I repeat my warning of last week: Everything I study, all major markets and all my major indicators, tell me we’re rapidly approaching a major inflection point in the markets.

Keep in mind, the global economic and geopolitical scene is nasty, and getting worse by the day. In addition to ISIS and domestic uprisings in Europe and the U.S. …

First, the European sovereign debt crisis is getting worse. In fact, on August 11 a bank in a small Bavarian town 50km south of Munich, said starting September 1, it would levy a “custodian charge” of 0.4 percent on deposits above €100,000.

In 2014, Deutsche Skatbank, a small German co-operative bank in the east of the country, introduced negative interest rates for private clients on balances above €500,000.

Germany’s biggest banks, such as Deutsche Bank and Commerzbank, charge negative rates for big corporate and institutional clients and will soon have no choice but to charge retail banking customers as well.

All the result of negative interest rates and hair-brained policies of the ECB.

Second, disinflationary forces are still dominant. Throughout most of Europe, investors are mainly concerned with getting to cash and liquidity, and taking on little to no risk.

That’s disinflationary and it’s having a major impact on all markets, far more than most realize. Europeans who are not investing in our property or stock markets are hoarding cash, not gold.

Long term, though, it is a major force that supports the view for a major new bull market in gold, other precious metals and U.S. stocks.

But not just yet. Pullbacks are needed first. Think of the pullbacks as the forces needed to pull back the string on a bow, creating a compressive force that when released, will send the projectiles launching forward.

Stay tuned and stay safe!

Best wishes,

Larry

P.S. A tidal wave is headed our way! It will wipe out the lifesavings of millions of investors. But most people can’t even see it coming. It’s called “The K Wave” or “The Long Wave.” Whether you are totally wiped out by it — or whether you ride the “crest” of this wave to a level of wealth you never dreamed possible — depends entirely on what you decide to do today. Click here to see how you could multiply your money by 300% … 400% … even 500% if you “surf” the K Wave safely into shore.

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 38

Brendan Thow August 24, 2016

Larry I absolutely LOVE your knowledge and Work. Hope to meet you and buy you a Steinlarger Pure one day soon Cheers Best Rgds Brendan

Sajal Banerjee August 29, 2016

Larry, Thank you for the AI graph with important dates. Please add to the AI graph, the projected numbers on those important dates. Regards, Sajal

john August 24, 2016

Larry Your forecast this time is very specific> If loks like its following your projected path> If it happens as you forecast it will be the first time in my lifetime that I will have seen a forecast by financial punters work out as predicted! John

jim step August 24, 2016

Questions 1. Is your K cycle in line with Elliott Wave Theory? - EWT says that Wave 3 is coming. Does that match your K Wave? EWT says 1st wave was year 2000 (tech crash), 2 wave was 2007-8 (house mortgage crash) and then Wave 3 (the big crash) for which they have no specific timing now. 2. Why isn't Weiss Ultimate stock portfolio recommendations (stock purchases) more in line with your forecasts?

barry ingleton August 24, 2016

THANK YOU for your projection, Larry. What will digital currency/crypto currency do or bring to the table during the crisis you describe? Will it perform like Gold and other commodities? Thanks again and cheers, Barry

Sandor August 24, 2016

I would also recommend JDST or DUST to play the inverse in the miners.

Phil August 24, 2016

I am eagerly awaiting October to finally start improving my position and actually buying some shares per your recommendations. By the way,we seem to have lost out on Harmony which seems to be breaking out with a really big gain.

Paul Demuynck August 24, 2016

Hi Larry, I always read your comments with great pleasure and interest, altough I am not an investor and only a small goldbug. ( I am an Art historian and I put my savings merely in Antiques as this is my field of expertise). Yesterday I heard an analysis by Harry Dent who predicts the general deflation we are heading into will bring gold down to 650 to 750 dollar levels within a few years. His arguments seems rather plausible. I really don' t know what to make of this...What is your opinion on his comments I would really like to know ! Thanks !

THEUNS PAXTON August 24, 2016

Hi, I agree with Paul.Harry Dent's prediction on gold is rather strange.Please comment.Thanks

John August 24, 2016

Hi .. Enjoy reading your articles. Quick question. Do you follow Martin Armstrong? Seems like your views are very similar on some things. Regards

Nick August 24, 2016

Larry, I have always thought your models and theories are "right on" long term, albeit I have not made money with either as yet. I should say "I did but", it went quickly with this unexpected record surge, even with good stops. Unlike most, I was right about Brexit, I bet on UVXY , big time the night before. And, then, I watched it pop, as it should the next day, only to sink back so fast it would make your head spin! Such price action back to the upside I have never seen! How strong it was! I should have known then to stay away. Oh well easy come easy go. I really hope you and Mike are right here, because like a fool I'm heading back in per both your models and suggestions. I set aside a percentage for SCT and AWT over a year ago. I look at it as insurance and fighting back in the face of what is being done to all of our money and it keeps me on top of it... I think our time is coming too.

anthony g August 24, 2016

I having been waiting for your view to emerge. It is my view as well.

Ray Simpson August 24, 2016

Should we sell our mining stocks

Howard August 24, 2016

"Second, disinflationary forces are still dominant. Throughout most of Europe, investors are mainly concerned with getting to cash and liquidity, and taking on little to no risk." Larry It is worth taking a global perspective for a moment. Disinflation, exacerbated by a low interest rate environment, is impacting on large demographic consumer groups all around the planet. The poor and unemployed, the retirees, generations of baby boomers who rely on a fed free economic environment are being crushed through poor financial policy decisions. And so we just have to wait.

Hedy August 24, 2016

Larry has been calling for a major correction for over 6 months. In the meantime those who invested in minors have made a great deal of money. He knows this which is why he is advising to hedge with leveraged products. Totally agree. Have taken original investment off the table and hedging rest. For those of your wishing to do the same remember that double and triple hedges can only be used for short periods of time. E.g. DUST. Major tracking errors over long periods. Better to buy calls on single leveraged indexes or short GLD, GDX, GDXJ. Same for SLV.

Justin August 24, 2016

What about crude oil? Late last year, a month or two before we saw December's bottom in precious metals, you also called for oil to bottom about a month later - which it did. What are your prospects for black gold now?

Anthony August 24, 2016

Hi Larry I live in Perth West Australia. I always look forward to your articles with great especially this one interest. I always believe in the fact that when the US stock market sneezes Australia catches a cold. I hope the graphs especially on Gold and the Dow above come true. On your advice I am prepared to sell my holdings in shares and gold mining and hold in cash with the timeline shown on the graphs. Will keep everything crossed. Thanks for the advice

Jason August 24, 2016

Hi Anthony, I'm in Australia too and looking to invest in some gold mining stocks. May i ask which mining stocks?

Mike August 24, 2016

I to am invested in gold/silver and am interested in larrys take on Harry dents forecast

Phil August 24, 2016

I am a little worried when you talk about Gold "long term"-I am sensing Gold is likely to fall hard as you say "into October" but worry that it will go out with the "Bathwater" and not rise for a long time.Sadly I have lost 2 friends who died waiting for the Uplift in Gold.

EAB August 24, 2016

How does one get answers to questions submitted on the comments submitted? I too have read Harry Dents predictions which contravene the majority of opinions by other commentators. His prediction on $750.00 gold price seems extensive...Ernie..

Rick August 24, 2016

What one or two unforseen yet entirely possible specific political and/or financial events could dramatically alter your predictions for the next year?

John T August 24, 2016

eagerly awaiting your Oct. 17, 2016 low so I can load up on gold stocks, still waiting to back up the truck?

Al August 24, 2016

Larry, what is your thoughts on Proshares ultrashort calls Jan. 28 012017 EUO--in at 1.81 a nd now .17--is there still light at the end of the tunnel? Thanks.

Linda August 24, 2016

Larry I looked at a long term chart of symbol UUP and noticed the trading range is about $2.00. How can you make money buying this ETF?

Dan August 24, 2016

Larry, In January the AI Model called for a worst case pullback in the Dow of 13,600. Now it's 17,000. Looks like we left a lot on the table.

Dave August 24, 2016

Larry, What about the yuan officially joining the SDR sep30. Is the US Dollar days numbered?

cyrus August 24, 2016

Dear, Larry What do you think about DUST ,when Gold is correcting , How high "Dust 'could go up . Thanks cyrus

John August 24, 2016

Just a question, Larry. You have suggested the inverse ETF GLL to insure gold. What do you consider would be a ball park number of contracts to protect $100K of gold over a few months? I appreciate that these are designed for more short term moves, but a rough guide would help.

ji kim August 24, 2016

As you said, the gold price went down dramatically! I will follow your graph to trade JNUG

Ji Kim August 25, 2016

Thank you posting this article.

Ferrari fred August 24, 2016

Larry,what about GGN, a fund that holds gold stocks , but wrigths covered calls on them . The fund pays out 12.%. You could ride the dip in gold and make a real good return.

Doug S August 24, 2016

Larry, A HUGE thank you!!! I love your AI models!!! I wish we could see an updated model every week. I find these charts EXTREMELY useful/helpful in navigating forward. Keep up the great work as I am a LONG-TIME subscriber and very appreciative of your candid knowledge/insight!!!

Dennis Green August 25, 2016

If I sell my stocks is the money safe in an AMERITRADE ( FDIC INSURED DEPOSIT ACCOUNT ) ????

Milt Fall August 26, 2016

In considering the Inverse Index ETFs you recommend, DOG and SPDN; both look to have very skinny volume. Aren't there higher volume ETFs that would be easier to trade or are these lower volume ones a tactic/strategy of which I'm missing your reasoning? Thanks for an explanation... Best regards.

Lynn Peterson August 26, 2016

Silver bottomed yesterday on August 25, 2016, and will now trend higher until about April 17, 2017 according to FTC.

John Esor August 26, 2016

Dear Larry, Reading your latest article in which you mention the famous constant Pi. I feel duty bound to point out it can be used to calculate several properties about a circle. The approximate value of Pi is 3.14159265...... but the number of decimal places of it's actual value is infinite. It can be used to calculate the circumference of a circle knowing it's diameter or the area of a circle from it's product with the radius squared. John

Richard Salyer August 29, 2016

Hi Larry; Finally became a trial member of Real Wealth. Particularlly I'm a huge fan of you AI Charts on Gold, $USD, DJIA. Please add one for Silver? You don't have to 100%, but your Charts give us a good, Idea and with any big Macro Change we can make adjustments to you Prognostications and still by on the right end of the curve for making money in Gold/Silver ETF's. Thanks. Mr. Salyer