Larry Edelson, of Uncommon Wisdom Daily, provides his near-term and long-term technical and cyclical analysis of the gold market. Additional discussions include the US Dollar, Dow Jones and oil. (Video blog follows excerpts below)
We’re really about a year away from the big moves down in the Dollar and the big moves up in gold. Cycles aren’t always right, but the evidence I have says that this is not the big next leg down in the Dollar and not the next big move up in gold.
On to the Dow – the Dow is holding quite nicely. I expected it to pull back a little bit more last week then it did, it hasn’t. We may still yet see a pullback there, however, the short-term, cyclicals in the Dow and broad stock indices continue to show higher prices for the next several weeks. Don’t run out and buy stocks based on that statement.
Watch Larry Edelson’s Video Blog September 10, 2009
I think that Larry is right about the dollar and gold, but i think he is just copying from Faber :). As far as the DOW going higher, I don’t put much stock into that comment at all (no pun intended). You can tell he doesn’t either. Instead of taking money off the table, I switched it into shorting financials with a play on SKF.
I do like Larry, and he does a lot of cyclical analysis in his Real Wealth Report, which is published monthly. Whether he copied from Faber or not, I am not sure, but it sounds like he believes a market correction is coming, and gold may get taken down with it.
I am certainly not going Long the stock markets right now. I have been nibbling a little bit here and there with tight stops, mainly following the advice of Harry Dent and his short-term analysis.
SKF is a great little ETF, though it ate my lunch back in May/June! Took a nice hit when the markets didn’t correct like they were supposed to! haha. Luckily oil and UNG blew up and i made the loss back at the same time.
Right now, I have some DEC/JAN PUTS on Citi and BofA— Citi puts for DEC were $0.01 so i had to pick up 100 of them just for the hell of it! Probably a loser since Citi is owned by the gobment, but for $100, am willing to take a shot.
Recently, I have picked up TWM (Russell 2000 2x Inverse) and SRS (real estate 2x).. but unloaded it the very next day when nothing came of the correction.
At this point, I think the markets are significantly overbought, and all this talk about the dollar crashing has me wondering if the fix is in and the dollar may recover!
I still have my core gold positions with a majority of my portfolio, but am going to continue to play around with SRS, TWM, SKF…Dent has suggested that his models are pointing to a breakdown in the 9600 to 9800 Dow Level, which we should hit next week… so i am going to move in around that area into these double-levs. If the Dow breaks under 9100 / S&P around 975, i am probably going to pick up some SPXU (S&P 3x lev yee haw!) and gamble a little hoping for a total breakdown.
President Obama is supposed to give a speech Monday night about the financial crisis, and i wonder what the hell that is about… perhaps he will say we are now in recovery and they are going to back off on further stimulus for now. Or, he may say — “We’re closing the banks!” haha… probably the latter — so that may be cause to hold off on loading up on the shorts for now.
hard to say. i am watching daily — following Denninger, ZeroH, Dohmen, Dent, Faber, Rosenberg, Mish, Schiff, et. al. and looking for a sign of a breakdown event. Martin Armstrong, whose analysis i highly respect, has also indicated that he sees a breakdown in the markets shortly after Labor Day.
Last year, Denninger spotted a liquidity drain about 2 days before the collapse in September, so I think there will be signs — whether we spot them early enough is another story.
Oh, also, one of my fav indicators these days is the Slow Stochastic, which has been more or less a good indicator for the last year or so. Right now, S&P is still not at a short-term trend turning point according to it, but is getting close.
It all seems to be lining up for some time next week, which has been a target for me since last June.
Only thing throwing me off right now is the yield gap between corporate bonds and Dow dividends. it should be much lower now, but is still riding in a ‘bullish’ area for stocks:
http://online.barrons.com/public/page/9_0210-wyldgp.html (I am looking for a reading of -3.5 to -4.0 here, per Howard Katz).. it is going in the wrong direction! In addition, the 10yr and 30yr Treasury yields are quite low.. I was looking for the 30yr to be around 4.8% to 5.0%+ before the collapse, so these readings aren’t there — but this may be because of heavy govt intervention in these markets as well.
Anyway, playing it day by day. keeping the stops tight.. willing to lose a little in the hopes of a black swan event that will turn over some solid profits, especially in the leveraged instruments.
Just some thoughts.