No month-end buy signals in the metals!

Larry here. Today’s video update was actually recorded last week due to my travel itinerary. No problem, because on Wednesday, Feb. 29 — after weeks of rallying — gold and silver gave up all their gains in a single day, and they failed to elect any monthly buy signals.

You’ll want to know what it all means. Plus, you’ll want to know what the Dow Industrials are telling you. That market actually did give a monthly buy signal!

Best,

Larry

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P.S. This week I’m hosting a FREE blockbuster event with legendary energy investor T. Boone Pickens and our in-house resource expert Sean Brodrick — and you’re invited!

Join in on this candid discussion between two powerhouse commodity investors, and you’ll hear the insider insights … surprising revelations … and the uncommon wisdom that have made Pickens one of the richest men in America!

Do not miss this important summit on the future of energy, and energy investing, in our country. Mark your calendar for Thursday, March 8 at noon Eastern. Space will be limited, so I urge you to claim your spot right away by clicking here.

External Sponsorship

The China Catastrophe

China is about to make an announcement that will

shake the world to its foundations – and that will

destroy everything you’ve ever worked for.

So says a renowned financial journalist on

assignment in Asia – and the crazy thing is,

he’s famous for being right.

He was one of the few to warn of the great

tech stock meltdown of 2000 … the housing and

banking bust of 2007 … and the recent boom

in gold and commodity prices.

Is he right again?

Watch this shocking free video here,

and judge for yourself.

}

IFTHEN(FIELD9=3) {

External Sponsorship

The China Catastrophe

China is about to make an announcement that will

shake the world to its foundations – and that will

destroy everything you’ve ever worked for.

So says a renowned financial journalist on

assignment in Asia – and the crazy thing is,

he’s famous for being right.

He was one of the few to warn of the great

tech stock meltdown of 2000 … the housing and

banking bust of 2007 … and the recent boom

in gold and commodity prices.

Is he right again?

Watch this shocking free video here,

and judge for yourself.

}

IFTHEN(AFF) {

P.S. This week I’m hosting a FREE blockbuster event with legendary energy investor T. Boone Pickens and our in-house resource expert Sean Brodrick — and you’re invited!

Join in on this candid discussion between two powerhouse commodity investors, and you’ll hear the insider insights … surprising revelations … and the uncommon wisdom that have made Pickens one of the richest men in America!

Do not miss this important summit on the future of energy, and energy investing, in our country. Mark your calendar for Thursday, March 8 at noon Eastern. Space will be limited, so I urge you to claim your spot right away by clicking here.

}

IFTHEN(FIELD9=0) {

P.S. This week I’m hosting a FREE blockbuster event with legendary energy investor T. Boone Pickens and our in-house resource expert Sean Brodrick — and you’re invited!

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}

Video Transcript

Good morning! This is Larry Edelson with my Uncommon Wisdom video market update for Monday, March 5. I’m actually recording this video update on Wednesday, Feb. 29 due to my travel plans over the next few days.

However, the action that we saw in the markets on Wednesday, Feb. 29 is very significant, and I don’t expect many changes in the intervening days between when I’m recording this video and when you see it on Monday.

The all-important action I’m referring to occurred on Wednesday, Feb. 29 and indeed that being the month-end, it is very, very important action.

Let’s go right to the charts:

First, gold: As you undoubtedly already know and as you can see from this chart, on Wednesday, Feb. 29, the gold market had a $76-$80 down day. The rally failed above this support level here and gold plunged, giving up almost two weeks of gains in a single day.

Now, it’s very likely that gold may rally back to the $1,742 level in this resistance area here. But the action that occurred on Wednesday, Feb. 29 is very significant. Gold did not elect a monthly buy signal. That is very important — after all this rallying over the last month or so that had everybody upset and many others jumping into the gold market, gold did fail to elect a monthly buy signal.

To me and my systems, that indicates that there is still a very, very high probability that we will see gold move back down with the initial support coming in around $1,625, $1,635, and a distinct possibility that we could go into late March/early April testing sub-$1,500 levels.

So, if you’ve acted on any of my advice to take on some short-term bearish speculative positions in the gold market and/or hedged up long-term core gold holdings, I recommend that you hold those bearish positions and hedges because it appears to me that the short-term gold rally is over and we will retest support levels.

The same can be said for silver: Here is the chart of silver. Silver had a massive 6% down day on Feb. 29, again month-end. Interestingly, we were well-above the $35.85 monthly buy signal that I’ve been telling you about.

But on Wednesday, Feb. 29, silver plunged over $2.25, failing to elect that buy signal on a month-end closing basis and putting in an outside reversal day and falling back into this declining wide trend channel that you see here.

So silver, like gold, remains poised now to test at least the $32 level. And once that gives way, we can see sub-$30 levels, at least $28, and maybe even lower going into April.

The interim rally is over here. The long-term bull market in the precious metals is not. The fact that the European Central Bank is printing money now, the Federal Reserve is printing money (and) many other central banks around the globe are printing money does not mean that gold, silver, and precious metals are going to explode to the upside.

Money-printing is a long-term bullish fundamental, but it does not have to be bullish every day of the year they are printing money. That does not mean that gold or silver has to go up.

There are contextual situations and conditions where money-printing can actually be bearish for the metal. And I believe we have that in place right now.

One of the reasons is they’re printing money like crazy to save the banking system in Europe and to save Greece. But Greece is not going to make it. Greece is going to default as sure as I know my own name.

Greece is going to pull out of the European Union and take back its drachma. And as this unfolds over the next 30 to 60 days, yes, the banks might print money like crazy. But again, that doesn’t mean that every day is going to be up for gold and silver. Quite the contrary.

As the euro disintegrates and Greece defaults, you’re going to see savvy investors and not-so-savvy investors run to cash. That’s going to be bullish for the dollar and bearish for just about all commodities out there.

So, again, money-printing doesn’t mean everything has to go up day in and day out. Far from it. You have to know when money-printing is bullish and when it’s not. That’s my take on the fundamentals.

The U.S. dollar: The dollar has been acting weak overall but – lo and behold – on Feb. 29, the dollar did put in an outside reversal day. It is finding support in this level and the next move in the dollar should be higher up to the near 81 level and, if we can get through that, probably to new highs up near 83.50 or 84.

As the dollar moves higher on a flight to safety, overall that will be a bearish tone for commodities, particularly gold and silver.

Dow Industrials: This market has given me a monthly buy signal with the Dow closing above the 12,850 level that I’ve been writing about on Wednesday, Feb. 29. This is a very early signal that the Dow Jones and S&P 500 are going into a long-term new bull market that will find stocks trading substantially higher in the years ahead.

That does not mean you should run out and buy stocks wholesale right now because we got a monthly buy signal. Indeed, I expect some kind of pullback along with metals and along with the general liquidation tone that might take root in the markets over the next few weeks.

But that buy signal in stocks does give you an indication that a new bull market in stocks is near. I expect by 2015-2016 we could see the Dow close to 20,000 if not higher. So there’s plenty of money to be made on the upside there.

Now the focus in the Dow should be on buying dips rather than getting all-out bearish. For now I recommend holding any short-term bearish positions because, as I said, there’s likely to be a pullback in the Dow and I would look to get out of those positions at lower levels and start picking support levels to get positioned for a new bull market in stocks.

Having said that, this is Larry Edelson. I’ll be en route back to Asia over the next couple of days. I will talk to you next week. I will give you an extensive updates on all these markets.

Your thoughts on “No month-end buy signals in the metals!”

  1. Larry:

    You said that metals should be headed downward in the short term but the stock market looks to go higher with perhaps a small dip or so. What is your take on gold stocks in the short term? Many of us liquidated these positions anticipating that both the metals and the market would head lower. Perhaps you could discuss this in an alert to RWR subscribers.
    Thanks,
    John S.

  2. Hey Larry, Just a few short months ago you were calling for Dow 9000, Gold at $1,200/oz Silver at $22 / oz.
    I have followed your advice and been burned pretty bad. Your other colleagues there at Weiss have been making better picks for the past year. Now, you’re saying to buy the Dow on pullbacks ? That silver may break below $32 / oz. And gold may go as low $1,600 ?
    A broken clock is right twice a day, right ?

  3. Isn’t it ironic that within minutes of when Ron Paul grills Bernanke on the value of metals versus the Federal Reserve Note, miraculously gold and silver tank hard while most other commodities were untouched or even up for the day. If it was coincidental, it’s still funny and ironic. The 29th smack down was likely due to manipulation with the speculative plays from the bullion banks. It really is funny how predictable their games are getting.

  4. these are very informative emails and well worth following most of the time. Henry

  5. I’m short in a number of ETFs and taking a huge bath. Might you please start making very short commentaries in your Windfall Trader updates about when you think it is a goodl time to liquidate these shorts; ie: “for those of you looking to get out of dow and S&P shorts now may be a good time”, or something along that line. Thank you!

    Lisa

  6. Why DOW to 20,000? Continued “QE” = asset inflation?

    Thanks, just trying to understand your comment.

    1. Yep, weakened US dollar / hyperinflation due to QE and other factors will force Dow prices higher. Plan on making the Warren Buffet play here and buy strong well capitalized blue chip type stocks that are under priced but have a good future and good track record and pay great dividends.

  7. A few weeks ago you said that you expected a big correction in the stock market with the Dow in the 9000s in the first half of this year. Now you see only a small pullback in the Dow. So either you are contraddicting yourself or you changed your mind

    1. Not at all. The risk of a sharp pullback was present up until recently, when the Dow closed February above 12,849. Markets are fluid. — Larry

  8. Everyone is all in a tizzy over the huge subterranean gas finds in several parts of the U.S., and that has been a major thrust of investment analysts, including at Weiss, for many weeks now.

    CHINA HAS GAS

    A report released just last week now verifies that CHINA has MASSIVE GAS pockets that make ours look small by comparison. The report estimates that China may have enough to power the country for the next 200 years!

    One big problem: No pipelines to speak of to deliver it. But, if we know one thing about China it’s this: They can do things fast.

    CHINA HAS GOLD
    China is now not only the world’s biggest gold producer, but also its biggest gold buyer, as confirmed by reports that appeared last week. It has exceeded India, which was number one.

  9. For sure, for sure… Larry’s quotes are getting higher and higher … no more gold at $ 1400 ( was $ 1200 before that ) or silver at $ 23 or even lower … now gold maybe to $ 1625 and silver to $ 30-$28 … if lucky . And the Dow? No 9000 anymore, eh ? Missed the low in Dec. …… but that’s o.k. … a new bull will come alive soon . … after April .

  10. Have the funny money wanna-be masters of the universe decided to fill their coffers by ramping up the markets with another war perhaps? I started checking out this series of videos from curiosity. Gives a real idea of how everything is so choreographed to the benefit of the money masters:
    Illuminati Project (there are at least 279 parts to this series and I’ve only made it only through the first 33 so far and don’t agree with everything but it’s pretty interesting stuff and pretty well documented. You can sort newest to oldest or sort from oldest to newest here:
    http://www.youtube.com/user/FaShoFaSho1212/videos?sort=da&view=u
    I vehemently oppose the claim that Israel is stealing Palestinian land as a lie of the devil, but some other stuff is very well documented and interesting, raises many questions and answers a lot
    Also check out:
    Dark Secrets of the Bohemian Grove original video by Alex Jones:
    http://video.google.com/videoplay?docid=-82095917705734983#docid=5688492591288248198
    And these bozos that cavort in their little druid costumes are running our governments and major corporations. What morons…er I mean masons!
    Enjoy.

  11. This was a paper raid. Just like the Fed is a paper tiger that is what this was. There is no fundamental reason for Gold and Silver to drop this significant within minutes. All this is planned manipulation by the Fed government to keep the price of PM down and cover up the PONZI scheme. I can guarantee you will not find an ounce of physical silver for $34.00 or gold for below $1600.00. Anyone investing in paper(when the picture looks rosy) will get hammered by the paper tiger. Those who invest in physical assets don’t get margin calls and the whats not, to make them loose their investments in seconds. I have never heard of silver or gold that was worth $0.00 as an investment. But my bank account with fiat worthless paper gets $0.00 interest in return. I guess that shows the true worth of the paper. My $9.00 silver stash is now over $30.00 an ounce, creating my own bailout funds due to greed of the banksters and fed printing! While the market is cracking, I will keep stacking! LOL! All vampires get a silver stake through the heart to render them lifeless. The silver and gold raids can only last a short while then, the race is on, just look at the recovery prices after the raids.

  12. Looks like every time the FOMC and Bernanke fire up the press they end up getting a “crude oil enema”. Bernanke even admitted that his “stimulus” gets cancelled out by higher energy prices passed on to the consumer. They seem to forget algebra originated in the middle east.

  13. Larry,

    Zerohedge had a story a couple of days ago about I think the goobermint of Israel buying US stocks. I suspect the US goobermint is doing the same to prop it up to help the presidents reelection bid. What effect will goobermint purchasing of stocks have?

    I’m wanting PMs to fall in price and hope they do. Do let us know when you think it’s time to buy.

    Larry, you say DOW to 20K in a few years – tell us this: What do you think will maintain our purchasing power best: PMs, DOW index funds, land, oil/gas stocks, etc, etc, etc. THAT’s what we need to know.

    Thanks.

  14. Quote from President Woodrow Wilson:

    “There are two beings who assess character instantly by looking into the eyes,—dogs and children. If a dog not naturally possessed of the devil will not come to you after he has looked you in the face, you ought to go home and examine your conscience; and if a little child, from any other reason than mere timidity, looks you in the face, and then draws back and will not come to your knee, go home and look deeper yet into your conscience.”

  15. Larry, your calls over the last month are bearing fruit… rest assured there are some out here that believe in your ability to see the big picture and won’t criticize when the market doesn’t jump your way immediately. Went long TZA last Tuesday to build cash to buy gold when it nears 1500… thanks for sharing your outlook.

  16. Larry,
    Following your reccomommendation, I have maintained a large cash position waiting for the big correction
    In silver. To date, with little or no trading in my portfolio, I feel very fortunate and well-situated to take advantage of the coming silver downturn. I admire your patience and steadfastness in this volatile market. Thanks.

  17. Fancy new comment section, UWD must have made some $$$ off short positions initiated last Tuesday evening.

    Larry, The crowd has been harsh (my self included), but the proof seems to lie in the pudding. We are about to hit your $32 mark, but as the saying goes: how low will it go…?

  18. How many folks have cancelled their RWR subscriptions in recent months because of Larry’s bad calls? Let’s see if Larry publishes this comment!

    1. Admittedly, my short term calls have been ill-timed. However, the recent declines in gold and silver wiped out many of those who ignored my forecast and who bought over the last month. In fact, three weeks of gains have been given back in just a couple days of trading action. Plus, I stand by my long-term track record in the markets, which are unparalleled. — Larry

      1. I’m with you Larry. I lost money also,but i sure as hell do not blame you.
        Some people will always Bite the hand that feeds them.
        Ray

      2. Larry, better to be right in the direction of the market than in the timing. The NYSE BPI did confirm an intermediate short term up trend in the S&P starting in November 2011, but it now looks like it’s run its course based on yesterday’s close. The long term trend is still down.

      3. Wiped out in gold and silver ? Did they all buy high and sold low ? Did nobody buy Gold at $ 1500’s low ? Silver at $ 26 ? Those are NOT wiped out at all . Tell me … who got wiped out ? The ones in a 3x bear silver got wiped out … nobody talks about that . Are your subscribers are all traders ?

  19. larry was a genius:
    1) when he predicted gold’s bull market a long time ago
    2) when he called a bottom for the stock markets at DOW 7.000 or so (i don’t remember exactly where)

    He made a mistake when he became too short-term oriented.
    Again though he is right when he makes his longer term predictions.
    He’s bad at shorting, but overall has helped me make lots of money.Keep in mind, he is essentially a bull, optimistic at heart, therefore not a great bear investor.
    Here’s to Larry.

  20. ZSL is dying a slow, agonizing death by 1000 cuts. On Sept 26, 2011 SLV hit 27.41 and ZSL hit 22.13. On Dec 29, 2011 SLV hit a lower low of 25.65 but ZSL made a lower high of 17.82. On this recent sell off it moved from 8.12 to 10.57 and is now back in the single digits and It looks like it is heading to new all time lows.

  21. Almost everyone is buying gold and silver and stocks and commodities.
    All you bears and doubters get out of the way.

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