Market action heating up! Here’s what to expect next …

Larry here with an important video market update. The European debt crisis is getting worse by the day, and now, virtually all markets are starting to understand the implications. You won’t want to miss my video update, where I give you some pretty specific forecasts that can have a major impact on you.

Best wishes,


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Video Transcript

Hi there, this is Larry Edelson for my video market update for Monday, November 14. Well, we’re certainly seeing plenty of action, aren’t we? Of course, the big news behind all the markets right now is still Europe. The crisis is rapidly worsening, with there now being a very high probability, as I’ve said all along, that Greece will default and exit the euro to bring back its currency.

In addition, the contagion is now hitting Italy, whose bond market is collapsing, despite the firewalls that were agreed to just a couple of weeks ago by European leaders. So the euro is now taking a shellacking again.

Mark my words: The European debt crisis is still in its infancy! In the weeks and months ahead, here’s what you can expect …

  Further market losses in the sovereign bonds of Italy, Spain, Portugal and even France.

  Further losses in the value of the euro currency.

  More crisis summits by European leaders that basically end up with nothing more than they’ve generated all along: A lot of hot air, no details, and a very stubborn attitude toward keeping the euro in place, at virtually all costs, even at the cost of a widespread depression in Europe, and rebellions.

Also, expect Greece to default and take back its currency, and new resounding calls for Italy, and perhaps even Spain, to start considering the same.



Right now, we must also keep in mind that no matter how short-term bullish many markets may sometimes appear, we are in crisis mode, and the big surprises will be to the DOWNSIDE.

We’ve just seen it in stock markets, which despite their rallies over the last two weeks are now turning down sharply. The same thing is now starting to hit again in the commodity markets, where gold, silver and many other commodities are beginning to also roll over again.

So let’s now go right to the charts. FIRST UP, none other than GOLD.

As you can see from the chart of gold below, gold did indeed manage to rally back to the $1,800 level, just as I expected. However, given all the bad news, wouldn’t you think gold should be trading much higher, near or even at record highs?

Well, it’s not and the reason is fundamentally the European crisis is causing savvy investment money to go to cash for safety, even to the U.S. dollar, rather than any investing at this time.

So the pressure is still on gold, and once you see it fall back below this uptrend line here with the red arrow, I believe you’re going to start seeing gold slide to at least the $1,500 level and very possibly, much lower. The bottom line is you should hold long-term gold, but refrain from adding any new positions or trading the long side on a short-term basis.

Gold Tested Major Resistance; Now Ready For Next Leg Down

Next, silver. Let me preface my comments on silver with full disclosure. I am personally SHORT the silver market AGAIN, as I believe another devastating crash in silver is about to begin. And this time, it could prove to be even worse, with a plunge from the $34 level down to the $25 level and lower in the cards.

Fundamentally, there is simply no way, in my opinion, that silver is headed much higher when most big money is moving to cash and when the industrial uses of silver are certainly hitting some speed bumps as Europe and U.S. economies slump heading into this crisis.

In addition, all of my cycles and technicals on silver are BEARISH. Here’s the latest chart. You can clearly see that silver did not even rally as much as gold did over the last couple of weeks and now, it’s already turning back down. Notice how silver remains well below the two downtrend lines, noted by the blue arrows, and even below a more minor downtrend line.

Also notice where the bottom of the current channel is, down below $25. That’s the path I soon expect silver to head into, and a very sharp decline, which can begin at almost any minute.

Silver Preparing For Another Crash

Now, let’s go to the U.S. dollar. Naturally, as cash leaves Europe and heads down a rabbit hole for safety, it’s going to cash, and since the dollar is still the world’s reserve currency, that means the dollar’s value is rising. You can see it in the chart of the Dollar Index.

After testing extreme support, the dollar started a sharp rally that just recently broke through the upper side of the declining trend channel. While the dollar will suffer some pullbacks, everything I monitor tells me that the dollar is going to rally more now, probably up to the 81 to 82 level in the Dollar Index. Now, keep in mind, this is a short- to intermediate-term move in the dollar. The long-term trend for the dollar is still MUCH lower. That has not changed.

Dollar Stages Sharp Rally That Will Continue

While Euro Gets Sucked Under

Now let’s go right to the Dow Industrials. Yes, the bounce in the Dow back up to the 12,187 level surprised even me but resistance has held strong at that 12,200 level and now the Dow is squarely back on track for lower prices. I still fully expect we will eventually see the Dow 9,000 level in the weeks and months ahead, but keep in mind the stock markets now are going to swing as wildly as commodities or currencies do.

Take a look now at the chart of the Dow Industrials. You can see the latest rally and how it stopped dead at the lower end of my system resistance channel, which spans from 12,200 up to 12,800. That’s a massive roof of overhead resistance, and I believe that the test of that roof is now complete.

Dow Failed At Massive Resistance; Preparing For New Leg Down

Now, the market is turning back down, and quite frankly, there isn’t much in the way of system or technical support until the Dow gets back down the 10,400 level which is a critical level, as I’ve noted for you previously. Once that level gives way — and I DO expect it to give way — then the Dow will be on a path that will bring it down the 9,000 level.

So right now is NOT the time to be heavily invested in stocks. Instead, I recommend sticking with my recent recommendations for speculative positions using inverse stock ETFs.

That’s it for today. As always, please stay tuned to any of my specialized publications you subscribe to for more frequent and detailed analysis and recommendations!

Your thoughts on “Market action heating up! Here’s what to expect next …”

  1. The language in Larry’s update is so confidence inspiring. Stocks don’t actually go down in the massive way Larry has been hinting at for months, but now they “starting to turn down” but never actually get there. Add to your short bets and “start” to lose money. Oops, the money losing part started a while ago and is still ongoing. Don’t worry, Larry’s strong conviction here that maybe things might start to turn down instills great confidence that the shorts are sure to lose (again).

    Disclosure: I’m a subscriber and I’m long everything Larry is short (and unlike Larry’s subscribers, lately, I’m making money and almost dug out of the hole that was dug by following Larry’s advice). You don’t need to believe me, just go back and watch Larry’s past videos and see how wrong he has been.

    We’ll hit DOW 12,700 before we hit DOW 9,000. If I’m wrong, I’ll buy Larry a fine bottle of Scotch. If I’m right, Larry can refund my subscription fees.

  2. If Mike Larson is wrong will he admit it? Gonzalo Lira wont admit his hyperinflation call is bogus. Bob Prechter wont admit he has been wrong on gold for 3 years. Martin Weiss wont admit he was a deflationist when inflation was the problem and an inflationist when deflation has been the problem. Mish wont admit that there has been no serious deflation.

    Whats the point of all these bold predictions? They never come true. Could it be attention seeking? I think that is what it is…Attention.

  3. I watch Larry because he calls the price of gold right more times than not. I would like to know why he thinks silver prices are going to collapes in the future.

  4. Your new video set up is producing a distracting echo, when you speak, sounding like your in a hollow tunnel. Maybe just opening a door or hanging some material on the wall opposite you would help. Otherwise I really get a lot out of your video’s. Thanks.

  5. I would not even think about buying any stock at this time. I believe really hard times are coming. America may be the next Greece.

  6. hasn t he been saying golds going down since it was $1200? well, I guess eventually he ll be right!

  7. Larry, When the stock market starts down do you feel that gold stocks will go down too?
    PS. I think some of the ‘know it all’ commenters here should start their own newletters and see how they do. If they know half as much as they claim to they should be quite successful. I’ll stick with Larry.

  8. Way too many bears in the metals for me. Particularly in silver. I cannot find 1 analyst that is bullish. All the money is on the sidelines waiting for a crash. It Ain’t Gonna Happen. Disclosure: I am long silver.

  9. as we all know … nobody is right all the time .. that applies to all who sell the Crystal Ball but so far … since I read Larry’s columm – April 2011 – he has been more right than wrong for the markets except for gold and silver … gold is stronger than Larry and way above the target he thinks for gold .
    Larry says … the DOW has to go to 12,800 to show strength … it’s 800 points away from that … but Larry is convinced the DOW would fall to under 10,000 ….. it’s 2000 away from that … is THAT not an indication where things want to go ? Of course… we just wait and see … no hurry for anything these days but going bear can lose you money as well .

  10. Larry

    You keep mentioning that the Euro is toast and wont be around in a year or two. My question is bearing in mind that property in Spain in certain resorts is 50% cheaper than 4 years ago wouldnt now be a great time to take out a 100% mortgage on some fabulous property in this region. (Yes these offers are still available if your credit rating is good)
    When the Euro goes down the pipe and Spain goes back to Psetas wouldnt the mortgage be worth nothing? I’m presuming you are earning in any currency except Euros. Is this feasible?


    1. You are assuming a national default will also include private debt within the nation. While this is possible, it is more likely the loan will be converted to the new currency.

  11. Wonder if Larry will ever post on his own forum again. Seems like all these comments fall on deaf ears.

  12. I find Larry’s commentary on metals to be the best in the business. Several times I’ve been tempted and saved by following his advice. Of course exact timing predictions are not within any mortal’s capability but a general wisdom about the markets, arising from years of observation and experience, is.
    I’m not a fan of Weiss publications but commentary from Larry I value. I reckon metals are not easy to judge and perhaps that’s why other writers shy away from taking a stand on them. Why is it that Larry seems to be the only one with the guts to say “no” when he judges it best for investors. I like this. I also like that he’s not selling metals out of his back pocket like most metals commentators. In fact, he seems quite willing to contradict other Weiss propaganda.

    1. Well Said, I agree… No one has a crystal ball… Larry has integrity from what I can tell and seems to watch out for us little guys. Most every one else seems to say what they want YOU to hear.. not what they are really doing… Larry if you are reading this… THANK YOU!!! FR

  13. For you idiots like Zachary, SEP, jake… obvilusly they don’t read Larry as a independent news source. Larry’s predictions has been right on but not timed. But then again, who can time the market? Larry wouldn’t be doing this if he could time the market. He is great at predicting trends though. I would recommend you non-believers to open a ear to Larry…

    1. “obvilusly” [sic] you haven’t been following Larry for much more than a year or you’d know better.

  14. Does anyone know why the volume on GLD has dropped by more than 50% starting Sept.30 and stayed down ever since (at least according to google finance)? Is the google chart defective? Several other ETFs (SPY, SH, SLV, TMV, +?), but not all ETFs, show the same pattern.

  15. Even if Larry doesn’t post on these comments, it’s amazing to me that he’s stopped censoring the comments. I know he’s censored many of mine that call him out for certain things and were overall calling into question his predictions.

  16. Brain,

    Here is a good article on why GLD is a losing bet.


    TONS of analysts were promoting a pullback, don’t tell me he is the only independent analyst that is bearish for PMs short term. Second, if your not timed well, your not “right on”. If he was not trying to be “right on” time, he wouldn’t advise readers into short positions….which lost tons of money again and again. Watch who you are calling an idiot.

  17. Zac

    how are those longs looking this morning

    Unprecedented times, us Europeans aren’t fixing anything in a hurry so hold onto your hats

  18. Ok larry here is a question for you.Will DOW begin a multi year rally from 9k levels? or will it hover around there for sometime and then smash upwards? What and how do you see the dow panning out over the next 2-5 years AFTER it hits 9k levels.

  19. I’m still wondering about the low volume issue on selected ETFs. Its a strange pattern beginning exactly on Sept.30 and continuing to today on a fairly wide range of them. For example, both SPY and SPXU, which are opposite bets on the market, both show this pattern. UUP which is a US dollar ETF and its inverse UDN also show low volume starting sept.30. I don’t see this effect on individual stocks that I’ve examined so far. This seems like a dramatic sign of some sort but I’m not a chart expert and I’ve not seen anyone else comment on it.

  20. Whether you like Larry or not, his info provides insight and is useful. Got tired of sitting out so I opened a put/call spread on SLV on Aug 28th using only 5 contracts each side. Use weeklies and sell the call and Jan12 to buy the put. As of yesterday’s close I’m +4,861.30. Trade is still running. Although I have seen Larry mention options in the past I don’t recall what strategies he employs. There are so many it can be confusing. I offer this because most agree that this is a really bad time to own stock.

  21. Can I just ask why there is no mention of market volumes? A chartist who ignores volumes is fundamentally floored & should be ignored!

    The incredibly low market volumes however do back up the points you make. However, surely common sense says investors will be buying real silver & gold when the U.S.$ & € collapses. What you’re commenting on is a manipulated paper price of gold & silver which has nothing to do with he tangible stuff!


  22. Can’t see how holding physical gold does the average joe any good. To own physical gold means you must also be willing to own a gun and be willing to use it to defend your pile of the yellow metal.

  23. If Larry is a student of Martin Armstrong – as it was said on this site – I would recommend for Larry to re-read Armstrongs article ” GOLD an 11 yr. high for 2010 ? ” … written Sept. 17 2010 .

  24. I don’t nderstand the bold confidence in these predictions either. I have broker friends who have been in this bsiness for 30 years, telling me they’ve never seen the markets act like this. I am trading ETF’s based on the market direction of the day. I am starting to get back to break even.

  25. I find Larry’s opinion on the PM’s, especially silver to be a joke. While the market continues to trade vast quantities of etherial imaginary GLD and SLV those wanting to cash in on this windfall by purchasing the physical to hold they are confronted by shortages and minimal if any price reductions from the bullion merchants. If you can’t hold it in your hand you don’t own it as many of you paper traders will find out when the ship hits the span and the economy goes over a cliff. I will be thinking of you.

  26. Gold! Hmmm. Isn’t that the yellow stuff that FDR claimed as his in the early 1930’s? Yes, I remember now. If you owned it, and it was in the U.S. He took it at around $ 20.00 per ounce. Your precious hedge against inflation becomes Obama’s if the s@@@ hits the fan! Don’t believe me. Wilkipedia the acronoym IEEPA, and you will understand why Larry is telegraphing that the smart money is going to paper currency. Gold is worthless as an emergency stock pile if all chaos occurs. Also, the latest book Currency Wars by James Rickards is invaluable to validating Larry’s predicitions. He is totally on the right side of this geopolitical prediction. Market timing as always is the key. Anyone that knows the exact moment of a USD catastrophy, will be extremely wealthy. Everyone else… very broke.

  27. Ok, regarding my volume question: I checked out some other sites and saw that the volume of SPY etc did not really change on Sept.30. So it looks like Google Finance is the one that is probably in error…or not.

    Does anyone have a ‘real time trading platform’ who can comment on this? I don’t really know where to go to get accurate and user freindly information at this point.

  28. Brian. Not from ur Nov 22 Question from 11-22; rather from ur 11-17 post and ??? Are u really in a holding position with an ETF that is reliant upon google for sell positions? First of all, what can you can control with an ETF? Second, why would you ever rely on Google? I swear… I mean no sarcasm. I am trying to learn how to make $$ in an impossible situation. I am not ur antogonist. Rather, I am trying to learn on how to survive. But, ur question is interesting. You are asking 2 questions on 2 failing institutions in my opinion. Please… Please.. Prove me wrong. With all due respect! I am a simple man with simple investing ideals. I don’t trust very many people at this point; let alone electronic positions,

  29. I would very much like to hear what Larry has to say about the possible re-introduction of the D-Mark. Larry, what would be a PIPs chart look like on the D-Mark re-introduction.?

    The reason I ask is prior to the Euro, the D-Mark was the 2nd RESERVE currency behind USD. Germans are looking for the escape door from the euro…My belief is they are disguising their intentions and have aligned with France and Brussels to combine gold reserves and reintroduce a gold backed currency. The latest news briefs and comments from their leaders exhibit this possibilty. Larry… your thougts as I challenge you?

  30. Thanks Larry, you are the one voice I feel I can count on to be accurate most of the time, a good trick in money and markets it seems.

  31. Death of the Euro is premature and like gold going down to 1500, and silver revisiting 25 and lower, is the kind of analysis that rivals Krugman blaming the rise of gold to 1500 on idiots following Glen Beck’s advice. Jesse Livermore once said that the hardest thing to do is to do nothing and stick with your conviction (as painful as that may be) while everybody else listens to useless predictions. Shorting PMs is case-in-point; just make sure that if you are compelled to do so, short the spot price, not actual gold and silver. Also, instead of shorting, how about adding to your position if the spot price drops. Telling people that you short something while being long long-term makes no sense. Remember what happened earlier this year!

  32. I read this column occasionally. That blogger named “pat” was involved in a long raving dispute with some of the other bloggers, then abruptly and angrily signed off “for good” vowing never to comment again on this blog. That same person virtually labelled the author’s comments as idiotic.

    I followed that ongoing debate for weeks, then all the participants disappeared except for that zachary guy. He still kept writing little short sarcastic comments aimed at Larry’s analyses, like he did here above concerning the “slow simmer.”

    Now that “pat” person is back (don’t know if it’s a man or woman) into the game. Maybe we’ll get this blog heated up again with those back and forth arguments like before? I remember that previously, pat and zachary were posing as allies and lovers in the arguments. Wonder if that will still be the case?

  33. Pat. The Euro is collapsing before our very eyes. Do you think that the death of the Euro is a silly prediction? Is so, I hope you don’t find the soup line to be an inconvenience. The 2008 crisis came with little to no notice. BofA didn’t do too well in the recent stress test. UK is preparing for the worst. Capital is leaving the Euro. The IMF’s bailout plan is just a plan. Time is out in the hour glass. Gold is worthless whether in hard asset or electronic form. Google IEEPA, and then FDR forcing the sale of gold in the 1930’s. The only question I have is whether Forex can be forced like the banks to take a holiday? An individual country can ban short selling. Is it possible to hault a Forex exchange?

    1. Breezy said: “The 2008 crisis came with little to no notice.” … which is precisely why predictions that crisis will repeat in the Euro zone is bogus. The definition of a black swan event is that it’s not predictable. That doesn’t stop all the chicken littles screaming about the sky falling when all that’s really going on is a game of brinkmanship and beggar thy neighbor.

      As far as gold being worthless (it presumes the dollar is not) … all fiat currencies fail eventually and go to zero. The dollar lost 95% of its value since Fedzilla was born in 1913, so it’s nearly worth zero now. Meanwhile gold went from $35 to where it is now. Worthless indeed!

  34. If Europe’s back is pushed against the wall, the world might become surprised to find out it will further strengthen its unity rather than go down in flames. Now, wouldn’t that be a doozy?! A United States of Europe, which all the pundits say is impossible due to the conflicting national interests of the member states and the divergence of economic health among them.

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