Just another quick update here: Don’t expect much out of the markets for the next several days. Choppy action, you bet. Major moves. Not yet.
Reason: The entire world is now waiting with bated breath for Janet Yellen’s interest rate decision next week.
I have never seen such anticipation, not in my nearly 38 years in the markets.
This I do know: While the markets will be choppy for several days leading into next week’s decision – whatever the Fed decides won’t make one iota of difference when it comes to the major trends underway. Not even the short-term trends.
For in the end, all central banks are powerless. All they can ever do is react. They can never, ever alter the trends that are set by free market forces.
And those trends, as you well know now, are almost entirely deflationary in nature.
Stocks remain poised for new lows below August’s lows. Then a major bottom and a new bull leg higher that will take the Dow to 31,000 over the next two years – on the backbone of flight capital running for cover from sovereign debt bubbles bursting first in Europe, then in Japan.
Not to mention the ramping up of the war cycles I have reported on, which are going to tear at the very fabric of society all over the globe in the months and years ahead, but send hundreds of billions of capital into the safety of the U.S dollar.
Commodities – still in a deflationary trend. Gold is basing now for a short-term rally, having just this morning tested important support at the $1,095 level, which held.
Oil, ready to bounce one more time, then lower, to below $40, then below $30 early next year.
The dollar, getting ready to soar again, no matter what the Fed does. The euro, getting ready to plunge again.
Hold all positions, but stay tuned. Despite the choppy markets right now, I expect new signals in a few markets and where recommendations could come early next week.
Best wishes,
Larry
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