Dog days of summer? Not much happening in the markets? Tight trading ranges? Yes, all are true. But that’s no reason to be complacent! Quiet markets and tight trading ranges can be very deceiving, often leading to surprises.
Check out my latest video update for more.
Best wishes,
Larry
Video Transcript
This is Larry Edelson with my Uncommon Wisdom video market update for Monday, July 23.
The last couple of weeks since I last spoke with you by video haven’t seen much in the markets other than tight trading ranges, a lot of coiling up like a spring ready to break.
That’s somewhat understandable considering we’re almost in the dog days of summer. And there’s a lot of uncertainty about what’s happening in Europe and, of course, the latest developments in the Middle East with Iran and Syria.
The major trends have not changed so let’s go right to the charts.
Gold: Here is a fresh new chart of gold. As you can see, gold is largely going quite a bit sideways. It’s coiling up and that’s usually an indication of a substantial move coming.
I do believe that it will be to the downside. Nothing’s changed there.
My system signals continue to suggest a sharp move to the downside; however, in a tight trading like this anything goes. I wouldn’t be surprised to see one last rally out of gold, even up to $1,680, before the next leg down occurs. You can see right here there’s tremendous resistance overhead in gold between $1,680 and $1,700.
Bear in mind, I’m long-term very bullish on gold, but that next leg up in gold will not materialize until we get a solid test of long-term support down below $1,500, probably around the $1,400 level.
Silver: Silver, much like gold as you can see here, is really coiling up in a very tightly wound trading action here. Silver, like gold, could stage one last rally. However, I believe that we are still very likely to see $23 and $20 silver before silver’s long-term bull market reemerges.
You can see here it’s on the edge of doing something in this contracting triangle — we’re very close to perhaps a short-covering rally or a complete breakdown.
There isn’t much in the way of support once $26 is broken. There’s some minor technical support at $23, and then really no support until around the $20 level. So keep your eyes on both gold and silver. I think we’re close to some significant moves there despite the recent, very tight, sideways action.
U.S. Dollar Index: The dollar is looking very healthy here, again, because the euro is so sickly. The dollar has had a nice uptrend, which I correctly forecast.
We’ve pulled back a little bit and we could pull back a little bit further basis the Dollar Index to about 83, but then we should see another leg higher to the 86, 87 level as Europe’s crisis continues to roll on.
Dow Industrials: The Dow Industrials have been very resilient, which is a testament to what I’ve been telling you all along — that it is in a new long-term bull market; but short- and intermediate-term, the Dow is not acting that well.
The internals on the Dow Industrials are not very strong. The breath of the recent rally is not very healthy. Volume is lackluster. As you can see from this pattern here it’s really not, as Elliott Wave people would call it, impulsive to the upside.
This is a correction. And we are now at a very significant resistance level in the Dow. So I would not be surprised to see the Dow start to roll over.
I’m still looking for a test just below 12,000, 11,500, maybe even 11,000 down here, before the next big leg up in the Dow Industrials occurs.
As quiet as the markets have been in choppy, tight trading ranges over the last couple weeks, and the fact that we’re heading into the dog days of summer, I do recommend that you stay in touch with all my writings and keep abreast of the markets because, as you can see from these charts, things are coiling up and that’s usually a sign, a precursor, of some big moves ahead.
So stay tuned and have a good week.
{ 12 comments… read them below or add one }
Larry, when do you record your videos? From the chart of the Dow Industrials, it appears that you recorded this after the markets closed on Thursday. On Friday, and again today Monday, the Dow has fallen. Perhaps you can not have so much lag time between the recorded videos and reality.
Thanks
You got to be kidding ? From Thursday to the following Monday the markets have changed in your opinion ?
Ae you on a daily watch list with Larry ? Trading daily ? You got guts … or too much mula $$ .
Hi Larry,
Question: when you go over the charts, why do you only refer to the DOW? Why not also cover & go over the S&P 500? > after all it’s a RWR recommendation/holding currently. Think this would be very helpful to review, especially since the inverse SPXU has been less than stellar.
Thanks so much!
A.
These comments have little meaning actually, as it is so very obvious that the markets are being totally manipulated by the “controllers.”
The bizarre endless sideways movement of silver and gold indicates the manipulation.
And, it further erodes all short positions—-as it is calculated by the “controllers” to do. They take your money. You lose your money. Plain and simple—-has nothing to do with dog days of summer.
The only solution is being quietly pursued—massive and voluminous lawsuits from local, state, and federal governments against the “manipulators.” LIBOR is the prime example, but not the only one.
Rest assured, it is only a matter of time before these vermin are taken down. Thieves, crooks, manipulators, and scheisters—-that’s the banksters. Larry feels something big brewing. Yes, he is very correct in that feeling, and this is it.
The complete fall of a massively corrupt system is growing ever nearer. Rejoice!!!!
@ FS
If there was a major contagion and subsequent crash I agree with you that you might see some familiar faces doing the perp walk. The major controllers will never be affected. That red shield is kryptonite to enforcers of any stripe.
Back up the Mack trucks NOW.
Wait? The Fed announced it will take
action next week, or in September.
Do you still want to WAIT to buy
precious metals?
WAIT? FOR WHAT? To get left in the dust?
So….1,400 is your low in Gold before the next big leg up??….which potetnially just came down from 1,700??…sounds range-bound to me…
Ran across the following on 26JUL2012. Kind of supports your projection:
“It has been one month since we last looked at gold and wondered if we would get a chance to buy it on sale in July.
So far, that pullback hasn’t happened. In fact, gold is a few bucks more expensive than it was back then. It’s hardly trading at the bargain-basement levels I was hoping we’d see by now.
But there’s still hope. Gold is trading in a consolidating-triangle pattern. And one way or another, it’s setting up to make a major move…
For the past couple months, the yellow metal has been stuck in a trading range between about $1,550 and $1,625. But that range has been tightening, and gold has been storing up energy for another big move. That move could happen as early as next week.
Take a look at this chart of gold…
CHART WOULD NOT COPY
Gold is approaching the apex of its triangle pattern. That’s the breaking point – where the metal either breaks out to the upside of the pattern or breaks down. Either way, there’s the potential for a $140 move in either direction. And based on the chart, it could happen in the next couple weeks.
Frankly, I’d love to see the metal break down here and give us a chance to buy it near $1,450 per ounce or lower. But I’m starting to doubt we’ll get that lucky.
With all the recent talk about a global recession, deflationary pressures, and Bernanke’s testimony to Congress last week that he does not want a third round of quantitative easing… gold has had plenty of reasons to drop in price. But it’s been holding steady above the $1,550 support zone. Maybe we won’t get a chance to buy it at as huge a discount as I’d hoped.
There is a big move coming, though, and here’s how I plan to trade it…
If gold breaks out to the downside of the triangle and loses support at $1,550, I’ll look to buy the metal somewhere around $1,450 or lower. That will be the best gold-buying opportunity we’ve seen in years.
On the other hand, if gold breaks out to the upside and rallies above last month’s high of $1,625, forget about buying it on sale. Just buy it. Gold will have entered “rally mode,” and will likely challenge its February high above $1,775.
Either way this plays out, there’s big opportunity ahead in gold.
Best regards and good trading,
Dog days of summer and ugly gold / silver charts ……
The dollar has topped and gold has bottomed. Global monetary easing now to infinity. It is mathematically impossible for everyone to buy gold at the bottom of a correction. Unless you have scaled back in, you will be chasing higher.
Did you have your readers sell their SPXU when it hit $50.? That was a quick 10% gain on a volatile ETF. Now it’s close to break even. I would also like to point out from a technical point of view that there is a bearish MACD divergence on the dollar and a bullish one on the Euro. It looks like the risk on trade is back at least for few weeks.
Everyone here is worried about minor ups and downs, while the REAL events are escaping your minds!
There are currently underway massive arrest plans in actions to legally take down the scheister banksters.
It’s happening folks. Hold on to your seats!!