Gold and silver are stair-stepping lower, toward their next support levels. Meanwhile, as expected, the dollar is strengthening and the Dow is looking great.
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Good morning. This is Larry Edelson for my Uncommon Wisdom video update for Monday, March 19. I’m actually recording this video clip from a hospital room where I’m having some tests done and have to stay overnight.
Not to worry, though — I’m on top of the markets. I have my laptop with me and I’m watching them very closely. So having said that, being in the hospital this will be a rather short update.
Gold and silver are moving nicely now to the downside, as I’ve been forecasting. Let’s quickly go to the gold chart here. This is the same chart I showed you last week, where the rally failed to give the important monthly buy signals. And now you’re seeing gold stair-step lower down to this next support level, which comes in just below $1,600 and $1,585.
I do expect that we will fall lower than that, below $1,500 on this next leg down, as I’ve noted to you in my written work.
Let’s now take a look at silver. Like gold, silver’s rally failed on the monthly February buy signals and silver is also stair-stepping lower. First primary support will be found just above the $30 level and then will probably fall down to about $25 thereafter.
The next chart I want to go over with you is the Dollar Index. The Dollar Index, as I indicated to you last week, would probably move above the 81 level, which is precisely what happened. You can see that right here.
We did sell off a little bit in the latter part of last week; however, I do believe that the dollar is going to continue to rally higher, as high as the $84 level up here, as the euro continues to weaken due to the European sovereign debt crisis, which has not been solved by the recent deal to bail out Greece.
Now let’s take a look at the Dow Industrials. The Dow Industrials are acting very, very nicely here. Not so surprising to me, as I reported to you we did get a monthly buy signal in the Dow Industrials.
I am a little bit surprised we’re moving up so quickly. It makes me a little hesitant. I’d like to see a pullback and test of the 12,900 level from the recent action up to 13,253.
But overall, the Dow Industrials is looking more and more promising as far as the long-term bull market (that I’ve been warning you about) would unfold.
It has arrived sooner than I expected — there’s no question about that — and it’s not yet time to fully deploy capital in the stock market.
But please, stay close to my signals and writings on the Dow because a lot of people are going to be very surprised on how the blue chip and cream-of-the-crop stocks in the United States, especially the Dow Jones Industrials and S&P 500-type stocks, take off substantially higher over the next few years to come, reaching at least 20,000.
So please stay tuned. I’ll tell you when to deploy your capital safely in the Dow. You’re not going to see anything at this point. Look for a little pullback then we’ll be deploying more capital.
Until next week, this is Larry.