Have You Seen Your Profits? Plus, Q&A …

I don’t normally give specific recommendations in my Uncommon Wisdom columns.

I reserve those for subscribers to my Real Wealth Report.

However, since almost all of the suggestions I’ve made here are racking up some pretty sweet profits, I don’t want you to miss out on grabbing them off the table or protecting them.

So let’s get right to it.

If you acted in a timely manner on the suggestions I gave in my March 16 and April 6 columns on ways to play a big rally in the Asian markets, then you could be sitting on gains of as much as …

 50.23 percent in Aluminum Corp. of China (ACH)

 51.72 percent in iShares FTSE/Xinhua China 25 ETF (FXI)

 33.34 percent in PetroChina (PTR)

 31.50 percent in Posco (PKX)

 24.96 percent in U.S. Global China Region Opportunity Fund (USCOX)

 22.21 percent in CNOOC Ltd. (CEO)

 21.31 percent in Korea Electric Power (KEP)

 6.90 percent in Huaneng Power (HNP)

Not bad for just over four months! Indeed, I calculate that if, for example, you had put $2,000 in each of these investments back when I recommended them — you’d now be sitting on total open gains of roughly $4,842.64, for an overall return of 30.27 percent on your invested capital. Excluding dividends earned, and, before accounting for your broker’s commissions.

So, what now?

My view, based on my cycles research and other technical indicators: The Asian markets have rallied too far, too fast. A pullback is likely coming over the next few weeks.

So, I believe it’s time, as I said at the outset, to grab some of those profits. Specifically …

First, I recommend you consider SELLING Aluminum Corp. of China (ACH) … PetroChina (PTR) … Posco (PKX) … and CNOOC (CEO) at the market. And, of course, at the same time, cancelling any protective sell stops you might have placed on any of these positions.

Second, consider holding the remaining Asia plays: iShares FTSE/Xinhua China 25 ETF (FXI) … U.S. Global China Region Opportunity Fund (USCOX) … Huaneng Power International (HNP) … and Korea Electric Power Corp. (KEP).

Third, I recommend placing protective sell stops on a good-till-canceled basis for the above remaining positions. Here’s what I suggest …

 For FXI: at $27.09

 For USCOX: at $5.89

 For HNP: at $27.39

 For KEP: at $10.24

If you currently have protective sell stops in place for the above four positions that are lower than the above, cancel them and replace them with the above stops.

And bear in mind …

There Are More Profits On The Table …

Over the last few months, I’ve made quite a few more suggestions and almost all of them are showing nice profits. So in addition to the above mentioned positions, I’ve recommended …

 Kinross Gold (KGC) in my April 27 column; now showing an open gain of 27.42 percent

 Dow Jones Diamonds (DIA), on March 16, now showing a gain of 23.32 percent

 Agnico Eagle Mines (AEM), on April 27, now up 19.90 percent

 Energy Select Sector SPDR (XLE), on March 16, up 17.77 percent

 PowerShares DB U.S. Dollar Bearish Fund (UDN), on March 30, up 8.44 percent

 SPDR Gold Trust (GLD), on March 30, up 4.12 percent

 ProShares UltraShort 20+ Year Treasury (TBT), on May 11, up 1.08 percent

 ProShares Ultra Real Estate ETF (URE), on June 29, up 5.16 percent

 ELEMENTS Rogers Intl Commodity ETN (RJI), on July 6, up 2.25 percent

 Rydex Inverse Government Long Bond Fund (RYJUX), on July 6, up 1.68 percent

 ProShares UltraShort MSCI Europe ETF (EPV), on July 6, the only loser, down 15.37 percent

I recommend you consider exiting the ProShares UltraShort MSCI Europe ETF (EPV), at the market, and if you used a protective sell stop, cancel that at the same time. Hold all of the other positions, and I recommend placing good-till-canceled protective sell stops at your entry price, if you don’t already have them in place.

Now, For Some Q&A …

Last week’s Uncommon Wisdom column and the associated cycle charts generated quite a lot of interest, and questions to boot.

So, let me run through the questions here now, and my answers …

Q: Larry, your cycle chart on the Dow shows a rally into April 2010. But I thought this is still a bear market?

A: It is still a bear market! But that does not preclude a continued rally. Nor a big one at that.

Keep in mind that bear markets are famous for sucking in the majority of investors, only to smash them yet again, when they least expect it.

So I would not be surprised at all to see the current bear market rally go further, and last longer, than anyone expects.

That’s especially true now because the very important, and very strong, 24 and 40 month cycles have bottomed. In a worst case scenario, that means the downside is now very limited, and the upside can gather lots more strength.

Q: How high can the Dow go in a major bear market rally?

A: Right now, I see three resistance targets for this rally: 9,500 … 10,000 … and at its extreme … 11,887.

Also, if the Dow closes higher than 9,500, expect to see it to reach 10,000. And if it closes higher than 10,000, expect the extreme target of 11,887 to be reached by April of next year.

Nevertheless, do not expect a rally to go straight up into April 2010. There are bound to be frequent, and sometimes sharp, pullbacks along the way.

Q: Larry, is it possible that the bear market is over?

A: Yes, it IS possible. But it’s way too early to say for sure.

It’s also possible the Dow could rally for several months, into April of next year … reaching as high as 11,887 — and then crashing big time in a second wave down in late 2010 going into 2011 and 2012. It’s just way too soon to say with any certainty.

Q: You’ve been right on with the dollar. It continues to slide. What’s your short-term outlook on the buck, and when do you expect it will lose its reserve status?

A: Short term the dollar looks very weak. Although I expect it to bounce again as it tries to lift its head. Longer term, the dollar should continue lower into late 2012, early 2013. That’s also the time frame in which I expect the dollar to lose its reserve status, and the world will transition to a single-world currency.

Q: I heard you’re short-term bearish on gold, and of course, long-term, very bullish on gold. Why do you think gold will be weak in the short-term?

A: My reasons why I expect a decline in gold are purely technical and cyclical. The short-term cycles point down, and there is massive overhead resistance in gold at the $959 level. Should gold close above $959, then my short-term forecast would be wrong.

Q: Congratulations on your alliance with the Foundation for the Study of Cycles. How long have you known them and how much of the research that you do with them will you bring to your various publications?

A: I first started working with the Foundation’s vast database on markets — some of it as old as 5,000 years — back in the early 1980′s. I plan on bringing the work to all of my publications in various forms, including …

 On an educational level, for investors to learn how to better understand why markets do what they do …

 On a historical basis, to understand the long-term economic cycles that are now all converging, at literally the same time, causing unprecedented changes in economies around the world, in society, and in politics …

 And of course, in Real Wealth Report and my other trading publications, to generate more potential profits for subscribers.

So, expect lots more from me on the study of cycles — the hidden forces that drive economies and markets.

Best wishes,

Larry

P.S. For even more action, and more profit potential, certainly consider a subscription to my Real Wealth Report. At just $99 a year, for 12 monthly issues, flash alerts, special reports, website access — and more — it’s a bargain. Click here to join now.

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