Markets are finally breaking into action. There’s a lot going on, so I wanted to give you an update, even though it’s a holiday.
Enjoy the day, and be sure to view my video.
Good morning! This is Larry Edelson with my Uncommon Wisdom video update for Monday, May 28. It’s a holiday today so I hope you’re enjoying it with your friends, family and loved ones. I certainly am enjoying the long weekend, and I’m also looking forward to getting back into the markets Tuesday morning.
Over the last couple of weeks, we’ve seen plenty of action, fortunately following right along with my forecasts. So let’s take a quick look at the charts.
This will be a bit of an abbreviated video today because it is a holiday, but I still want to show you the charts of the main markets.
Let’s start with gold. As you can see here on this chart of gold, gold has indeed slid quite sharply down to around the $1,526 level, testing the low from late December 2011, and it is finding some technical support there.
We should see a bounce, bringing it back up to say $1,600, $1,610. But I do believe, based on all of my indicators, that we will see a break below $1,500 down to around the $1,440 level in the coming weeks. So I remain bearish on gold.
Now let’s also take a look at silver. Silver has been following gold quite closely and is falling actually even sharper than gold, which is to be expected.
Silver’s finding some technical support in here, but I do expect silver to break through the $26.60, $27 support level and move lower still.
All of my indicators remain bearish in silver.
Let’s take a quick look at the U.S. Dollar Index as a proxy for the U.S. dollar. Indeed, in the last video update I did for you, I did indicate that I expected the dollar to break this resistance line here, mid-channel, and move above the 81, 82 level.
That’s precisely what happened. I wouldn’t be surprised to see a little pullback then a further rally up to 84. This is largely being driven by the meltdown in Europe and the European sovereign-debt crisis, which in the short term is bullish for the U.S. dollar.
Now let’s take a look at the Dow Industrials. We have begun to see a rather sharp sell-off here. However, we’re coming into some very important support levels in the Dow. More specifically around 12,250.
As long as that level holds, we should probably trade back up to the 12,900 level. And we’ll have to see what happens at that point. If 12,250 gives way on a closing basis, we could see further losses in the Dow — down to about 11,800 or maybe even 11,500. It’s a little too early to say.
Right now I want you to enjoy your holiday. We’ve got a lot of action-packed markets that will probably continue right after the holiday as they open tomorrow morning and heading into June. I see lots of volatility and lots of trading opportunities.
So stay tuned. This is Larry. Again, have a nice holiday today and a good week.