Update, Dow’s Last Gasp and New Trade …

Larry here with an important update on the markets. Certainly the Dow Industrials have rallied more than I expected. Nevertheless, the trend remains firmly lower with the August lows expected to give way and the Dow to move to as low as the 15,000 level, possibly much lower.

Take a look at this zoomed-in weekly chart of the Dow Industrials.

As you can clearly see, there is a mass of overhead resistance starting at current levels and scaled in up to the 17,500 level.

I doubt very much that the Dow can reach that high. It is far more likely that the Dow will tease everyone by moving just slightly above 17,000 and then fail wickedly, with a forceful decline to follow thereafter that is likely to shatter the August low at the 15,300 level.

It is also very possible the market could simply rollover right now and start heading lower.

While it certainly is not fun, sweating through the market’s gyrations and having positions that were in your favor move temporarily into the red, we should expect this kind of action right now because we are on the cusp of a new era in the markets – and volatility is running high.

Hold all stock market related positions with your protective sell stops in place on a good-till-cancelled basis.

Today is October 7. Many of you have asked what event will occur today.

Let me answer that question right now. I don’t expect one single event to occur today and I never did. Rather, today represents a date that months and even years from now, I think we will all be able to look back to as the start of a new era in the markets.

The telltale evidence is already mounting. Putin bombing Syria. NATO strongly objecting, setting the seeds for war. The refugee crisis in Europe getting worse by the day. The Federal Reserve – not likely to raise interest rates this month yet again. A debt ceiling fight looming in Congress. The IMF warning that the global economy’s biggest threat is sovereign debt.

Sovereign bond prices falling as a free market starts to take interest rates higher, no matter what the Federal Reserve does or says.

And more. If you look at the world around you and read its tea leaves, clearly the other side of the financial crisis that started in 2007-2009 with the real estate bubble bursting – is now gathering steam.

That crisis is going to be in government debt. For the simple reason that the governments of Europe, Japan and the United States have recklessly built up mountains of debt that cannot – and will not – ever be repaid.

Of course, the debt was built up way before the real estate crisis. But since then, governments have racked up even more debt, some $58 trillion. And they have known full well that the day of reckoning is coming.

That is why for the last several years we have seen the governments of Europe, the United States and Japan engage in what is called “financial repression.”

That is the term used when governments and central banks deliberately and intentionally repress their citizens through various methods, including raising taxes … and artificially keeping interest rates near zero so that savers cannot save (and instead wealth is effectively transferred to government coffers).

Not to mention governments spying on their citizens tracking down every penny of their wealth – as is the case with the Foreign Account Compliance Tax Act (FACTA) – where every American with an overseas bank account and a balance of over $50,000 must report that account to the government.

This is only the beginning of the repressive methods governments will use going forward. Also in their arsenal of tools are the following: eliminating or seriously reducing the use of cash and instead forcing more and more transactions to be totally electronic in nature so they can be tracked.

Eventually I would not be surprised even to see indirect confiscation of retirement accounts. By indirect I mean governments would require you to hold a certain percentage of your retirement savings in sovereign debt, thereby helping to keep governments funded.

In the end, this is all going to lead to a revolution against big government and the debt-based monetary system we currently have – and to a new world that will see prosperity once again. But getting from here to there is going to be like a roller coaster ride through hell.

We will survive and prosper. My Real Wealth Report gives you everything you need to protect and grow your core wealth, conservatively.

This service, Supercycle Trader, will help you grow your wealth, spectacularly. All you need to do is be patient, unemotional, strong, and follow my directions as closely as possible.

Not every trade will be a winner. But as I showed you in my recent webinar, it is not how many winning versus losing trades that you have. It is how you manage your risk and your losers that counts. If you do that, by following my recommendations closely, the profits will flow to you and in abundance.

Now let’s talk about gold. Gold is performing as expected. It is firming up, probably in anticipation of a stock market decline. I expect gold to gradually rally up to about the $1,170 level.

If that scenario unfolds – as I expect it will – then I will be looking for you to grab profits on UGLD and simultaneously reverse into a bearish position to capitalize on the expected decline into what could prove to be a major low in November.

Let’s talk about the dollar now. The dollar is simply trading sideways biding some more time. But it remains poised for a very strong rally in the days and weeks ahead. Conversely, the euro also remains poised for a very sharp decline.

Therefore, hold your long dollar ETF (UUP) and either your inverse ETF on the euro (EUO) or the call options on that inverse euro ETF and keep your protective stops in place (for all but the call options where I am monitoring the position for you).

New Recommendation

Now, to my latest recommendation: I have said all along that oil likely had one more rally in before collapsing to below $30 a barrel.

As you can see from this chart here, oil has now broken out of a triangular formation and is looking like it will make a last gasp effort to rally, as high as $55 to $60 before succumbing once again to its bear market.

Similarly, the United States Oil Fund, symbol USO, is also breaking out of a triangular formation and likely to rally from its current level to at least $19.50 and possibly as high as $25.

Therefore, I recommend all members purchase shares in USO per the details in the trade table below.

Please act on this recommendation as soon as possible.

For all members:

Best wishes and stay tuned …

Larry