US Dollar & Stock Market Video Analysis

Gold & Silver Bullion Video Analysis

Precious Metal ETFs Video Analysis

Trader Time Swing Trades Video Analysis

SFJ Core Position Stocks Video Analysis

Today’s videos and charts (double click to enlarge)

Thanks,

Morris

Most analysts shy away from making forecasts. They don’t want to take a chance of being wrong. So they end up talking out of both sides of their mouth. Or worse, they give you a bunch of mumbo-jumbo leaving your head spinning trying to figure out what they are saying.

Not me. I consider myself in the business of forecasting. After all, if I say “buy,” I am forecasting the price will rise, aren’t I? And conversely if I say “sell.”

I don’t mind putting my reputation on the line. It comes with the territory. I am not going to be right 100% of the time, or even 70% of the time. It’s going to come in streaks. Streaks of being right, and streaks of being wrong.

But you should all know that. And if you don’t know that forecasting the markets is one of the toughest things in the world to do, then you shouldn’t be trading. It’s that simple.

That said, my forecasting, unlike most other analysts, is NOT based on opinion, interpretation of fundamentals, news, or anything similar.

My forecasting methods are based solely on objective criteria that eliminate all emotion, all subjective interpretation, from the equation. In short, I use …

– A unique form of technical analysis that has its roots in Newtonian physics and the basic Newtonian law of actions and reactions. It also includes measurements of entropy, for all systems have energy in them and are governed by many Newtonian physics laws.

– I use the power of today’s modern computing to crunch hundreds and, in some cases, even thousands of years of data to screen for cycles in prices that cannot be seen with the human eye.

These cycles can range from as short as a few days in duration to decades-long major price cycles.

– I use neural net forecasting models that then take all the cycles that have been discovered, crunch that data based on their past iterations, and then project them forward dynamically.

Most cycles are fixed in duration. But when acting together, they become dynamic, and fluid, vacillating back and forth in a new matrix of cycles that govern price behavior.

And then finally, I use my buy and sell signals to determine what is a legitimate signal that indicates either a trend change or continuation, all in accordance with what the cycles say.

The buy and sell signals are also a proprietary program I developed in the mid-1990s. It’s uncanny how accurate it can be, often pinpointing trend changes to the penny.

Right now though, I want to freeze this moment in time and give you a roadmap of what I am seeing in the major markets. In gold, silver, oil, the dollar, the euro, and the Dow Industrials.

This way you’ll have a roadmap by your side. Print it out. It should come in very handy over the next few weeks. We start our journey now …

Gold: Correcting as expected and has already given a daily sell signal by closing this past Thursday below $1,227.70. The pressure remains to the downside.

Weekly support at the $1,201.30 to $1,202.50 level should now be tested. If those levels give way, gold should fall to at least the $1,168 level — where it would be a tremendous buy!

In short, gold is now correcting its first leg up. This first pullback since that first leg up now becomes all-important. As long as gold holds major support at the $1,168 level …

The next, second leg up should see gold soar to over $1,400.

Ditto for mining shares. They should pullback sharply, then as long as support holds in gold, take off again to the upside with a vengeance.

Silver: Same overall pattern as gold. Now correcting the first leg up. Silver has support at the $14.57 level and first major overhead resistance at the $15.46 level. Silver is going to be far more volatile than gold, so be careful with it. Key your silver trades more off of gold.

Crude oil: I don’t like to brag, but with oil, I feel compelled to pat myself on the back. When it was trading in the mid-$100 level, I put out forecasts that oil would not bottom until it fell below $30, and more specifically, tested the $26 level, where a bottom would form.

That is, indeed, precisely what has happened, and now oil is back up near the $40 level, bouncing to and fro, relieving some of the built-up pressure of its first leg to the upside.

So what now for oil? It’s simple, per my objective, unemotional models. Crude now has MAJOR support at the $32.15 level, with a pivot point at the $39.25 level. A pivot point simply means that when oil is above $39.25, it will tend to be bullish, building support … while when below $39.25, it will tend to have a bearish flair to it.

Additional support lies at the $36 level, which may be tested on a pullback, while additional overhead resistance stands at the $42 level. Right now, oil is and will be in a trading range for a month or so, but its next big move should be a breakout to the upside to the $50 level.

So keep your eyes on the $42 level in oil. That’s your next breakout point.

U.S. Dollar: Largely caught in a trading range for now, but within the context of a long-term bull market. Short-term support can be found at 93.197 on the Dollar Index, followed by 91.257.

Resistance will be found at 96.955 and then the former highs just above the 101 level.

Overall, the dollar’s fate is in the hands of the euro, a dying currency. So as the euro dies, the dollar will soar like an eagle. I expect new highs in the dollar and new lows in the euro by late June.

Euro: The dollar in reverse, trading sideways right now, but with a bias to the downside. Support at 1.1030 followed by 1.08995. After that, support plunges to the 1.05 level, then 1.03 and then even lower.

Overhead resistance is formidable at the 1.1216 level to 1.1400 area. I doubt any short-term rally could see the euro move above 1.1400, and if it gets anywhere near there, I would short the heck out of it using an inverse ETF, such as EUO.

Dow Industrials: Toughest market on the planet to forecast short term, due to all the cross currents. But all of my models are still resoundingly in agreement that there will be a possibly large and steep correction before the re-emergence of the long-term bull.

Here are the key numbers you need to know about:

Major resistance: 17,901 and 18,500. Unless the Dow can get above both of those figures on a weekly closing basis, the bias toward the downside will remain the more probable path of direction.

Major support: 16,652 and 14,687.

Notice the gap between where the Dow is right now as I pen this column (17,519 Monday 9:46 AM EST) and the first level of major support at 16,652.

That’s almost 1,000 points below the current market, compared to the Dow being a mere 400 points away from resistance at the 17,901 level.

Some would notice that and say that’s a sign of the Dow’s strength; it’s closer to resistance than it is to support.

But that would be a rookie talking. An experienced trader knows that all markets like to suck or draw in the unwary by moving and hanging out near resistance levels …

Only to chew them up and spit them out on the way down.

So beware: Unless the Dow Industrials can soon blow through 17,901 and 18,500 on the upside … the blood will overwhelm the street on the downside, with the Dow still capable of plunging to the 13,900 area.

Stay tuned!

Best wishes,

Larry

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.

1. Gold continues to track the sideways action of the US dollar against the Japanese yen, ahead of Friday’s important US jobs report.

2. Investors who focus only on the USDX are focusing mainly on the action of one risk-on currency (the dollar) against another (the euro).

3. That’s a mistake, because gold is the world’s premier risk-off asset. Gold’s price action against the dollar is highly correlated to the dollar’s price action against the Japanese yen.

4. Double-click to enlarge the image. This daily bars chart of the dollar against the yen shows the dollar is meandering sideways, roughly between 111 and 115.

5. It’s unknown whether the dollar will break out to the upside or the downside from this trading range, but the target price zone of the huge head and shoulders top pattern is the 105 -107 area.

6. A decline to that area would probably be accompanied by gold rallying to $1350, and perhaps to as high as $1500.

7. Next, please click here now. Double-click to enlarge this daily bars gold chart.

8. There’s a very large inverse head & shoulders bottom pattern forming, and I expect the right shoulder low could occur around the April 19 time frame. Here’s why:

9. That’s when the Shanghai Gold Exchange (SGE) is scheduled to launch its gold price fix. The Chinese government has already told Western banks that their gold bullion dealings in China could be curtailed if they do not play a fair and significant role in the new gold fix platform.

10. Please click here now. Gold often sells off quite strongly after Chinese New Year ends, but investment demand has surged, as I predicted it would when the gold market became more stable.

11. I have more good news about the love trade, for higher gold price enthusiasts. To view it, please click here now. The ebb and flow of Indian gold demand is highly correlated to the monsoon season.

12. For the past few years, El Nino has brought warm winters to the West, and relatively dry monsoon seasons to India. That’s about to change.

13. Not only is El Nino fading, but La Nina appears like it will replace it, and that means bumper crops for Indian farmers who are the world’s largest gold buyer class!

14. Also, La Nina can bring cold winters to the West, and higher oil prices. Rising oil prices tend to be accompanied by rising gold prices.

15. The US jobs report occurs this Friday. Gold has a tendency to be soft in the days ahead of that report, and then stage a nice rally after the report is released.

16. As the power of the love trade grows, the importance of the US jobs report is waning, and that is adding more overall stability to the market. That stability is highly attractive to Chinese investors.

17. Polls in the USA suggest that while elderly citizens may want to rebuild the America of the 1950s with a Trump/Cruz team, America’s youth are obsessed with socialist Bernie Sanders.

18. The US 1950s GDP “super boom” occurred after World War Two ended. The America of the 1950s was built by hard working veterans. I’m a little worried that America’s senior citizens may be overestimating the heart of the current younger generation to rebuild what they built, even with better tools and technology.

19. So, my suggestion for stock market enthusiasts who dream of the past is this: focus on Chinese and Indian stock markets, where billions of gold-oriented hard working citizens stand more ready to take on any task, and get the job done.

20. On that note, please click here now. I’ve suggested that Chinese stock market declines and crashes need to be bought, rather than predicted. Chinese culture is very old, and that society brings vastly more experience to the table than the West does. The latest news suggests that a major move higher in Chinese markets is coming, and probably in the very near future.

21. Please click here now. Double-click to enlarge this key Chinese stock market chart. From a technical perspective, the upside implications I’ve annotated on this chart are in sync with the solid fundamentals and pension fund news that is now in play.

22. Please click here now. Double-click to enlarge. This daily bars GDX chart shows support in the $17 area. I think it’s very important for gold stock investors who are out of this market to be substantial buyers in the $20 – $17 area.

23. I’m a buyer on every 25 cent decline in this price zone, using my systematic capital allocator. If GDX declines below $17, I won’t do any more buying unless it makes a new low.

24. I don’t expect that to happen. Instead, I think GDX is going to surprise most analysts, and stage a big rally towards the $28 area. That’s mainly because of La Nina affecting Indian demand, the action of the dollar against the yen, and the re-emergence of the Chinese investor class!

Thanks!
Cheers
st

Stewart Thomson
email:  stewart@gracelandupdates.com
email:  stewart@gracelandjuniors.com
email:  stewart@gutrader.com

Special Offer For Website Readers: Please send me an Email to freereports4@gracelandupdates.com and I’ll send you my free “GDX Versus GDXJ, Mano A Mano!” report. As the gold price moves higher, GDX will lead at times, and GDXJ will lead at other times. I highlight key leading stocks within each ETF, with key buy and sell signals for each!