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I can’t tell you the complaints I’ve received over roughly the last 14 months, when I started warning everyone that a stock market correction was coming. Possibly a big one.
They said I was nuts. That I was a stopped clock. After all, the major indices such as the Dow Industrials and the Nasdaq were making one new high after another.
I even told investors who were interested in dividend income to stay out; they’d lose more than they could possibly earn in dividends or royalties when the principal of their investments would plunge.
And even after Brexit, stocks simply roared right back.
But I am standing my ground, backed by time-tested models. And the facts now are this …
A. Even before the stock market started to plunge last week, more than 42% of all publicly traded U.S. stocks were down at least 10%.
B. Now that the market is falling, those figures are even greater. More than 46% publicly traded stocks are now down more than 10%.
C. And fully 24% are now down more than a whopping 30%!
Thing is, most investors who didn’t listen to me won’t listen to me when I scream that the bottom is in and that the Dow Industrials are headed to well over 31,000 over the next few years.
And that Asian markets, as ugly as they seem right now, will do even better, with China probably quintupling.
Instead, they will be panicking near the lows, claiming it’s the end of the world. That the Dow is going to go below 5,000 or some ridiculous number. That China and Asia are going to crash and burn. That the only safe place to be is in U.S. Treasuries.
And guess what? Those investors will …
A. Miss out on the biggest stock market gains, ever. And …
B. They will lose almost every penny they invest in U.S. or European sovereign bonds.
Let me give you perhaps the two most important insights you could ever have on how markets work. Insights that you only get from studying thousands of years of data every which way you can, and from being a professional trader yourself.
First, the majority of investors lose money. They are caught on the wrong side of the markets, especially at extreme highs and lows.
Second, pullback, crashes, mini-panics, market rallies in bear markets, etc. — all create the energy needed for the major underlying trend to finally re-emerge.
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| It’s the crashes that pave the way for the next bull run higher. |
In other words, it’s the crashes, like we are seeing now in stocks, that pave the way for the next bull run higher.
It’s the way the markets move, like a giant pendulum, swinging from one side to the other, from fear to greed and back again.
Let’s say, for instance, that the swing of the pendulum to the right is a bull market. How can it possibly swing to the right unless it first swings to the left?!
On the flip side, let’s say the pendulum’s swing to the left is a bear market. Well, how can it possibly swing to the left if it hasn’t already swung to the right?
Get the picture? That is precisely how markets work. To get those swings, the majority of investors must, by definition, get trapped, bailing out precisely at the wrong time.
Shorts bail out at tops; longs bail out at bottoms.
And only the savvy know when to get out and back in at the right times!
That’s also why I couldn’t be happier about what’s happening in stocks now. Not only because I’ve been right on course, but far more importantly …
It’s setting up that inevitable swing back to fear, which will create the energy for the pendulum to swing back in the other direction, to the right, and help fulfill my long-term forecast, that the Dow is headed to 31,000+ over the next few years.
Problem is, as I’ve said before, very few investors, except those who subscribe to my Real Wealth Report and Supercycle Trader will profit from it.
I’m not boasting, mind you. I am just telling you like it is. Even if you’re not a member of my services and never become a member, please at least take the lessons I try to give you in these columns seriously; they will help you to both avoid losses and make more money to boot.
So what now for the stock market? Will it still crash? If so, where might it stop?
First, according to my models, the correction will still come.
Second, major support for the Dow Industrials, the index most widely watched, comes in at the 15,672 level. If that gives way, the Dow will likely fall much further, to about 13,937.
Third, the correction, or crash, or whatever you want to call it, should be over by October, in a normal three-month correction.
As to gold; it still needs to correct, massively. Same for silver and mining. Do not touch them at these levels.
Best wishes and stay tuned …
Larry
vixtor July 13, 2016
If dow expect to correct so deep to 15672, why not take profit n wait it out for this level to buy later.
Tom K. July 11, 2016
Larry: I have followed Real Wealth since inception. I am satisfied with the results, as I have benefited most of the time. Of course, I understand that you are only a human being like the rest of us. Perhaps some of your readers expect a mythical super human who exhibits mystical powers or the uncanny ability to predict the future with unfailing accuracy. I sense the undeniable cry of Greed accompanied by a complete lack of patience by some of those unhappy folks. Again, you are doing a great job considering the state of the World, our country, our economy and our Government. Please keep your recommendations and updates coming.
James July 10, 2016
Doesn’t an extremely powerful bull market trade to leave as many people waiting on the sidelines for a pullback that never comes? If the bull market in gold is as powerful as most here think it will be , won’t the pullbacks be shallow and corrections may even happen over time rather than price? I am hoping like many on here, that a pullback comes. I have a sizeable cash position that I have been waiting to deploy in the mining sector. But at this point I hope we are not part of the herd that has been left behind only to watch this market run away.
R. Davis July 9, 2016
Larry, I’m still with you. Waiting for your go-ahead to buy gold and silver. I watch the daily closing prices of all of your recommendations and I’m in total lockstep with you in my portfolio. But, I have to tell you, I wish I had jumped on GDJJ about 10 months ago. From the lowest close in the past 12 months to the highest close in the past week, GDJJ has gone up 1,539%. For gold, that same calculation, gold has gone up right at 30%. That’s about 15-1. Now that I’ve missed that boat on your advice, I’m waiting for the big correction. I am somewhat concerned that with your new newsletter, those of us who stayed loyal to Real Wealth Report will be left behind.
Pete July 9, 2016
From Larry’s December 2015 issue of RWR.
The truth of the matter is this: I cannot be 100 percent confident that we have seen the
final lows in precious metals until gold can close above $1,368.20 on the last trading day of a month, meaning it would execute the first monthly buy signal on my systems.
That is the line in the sand, and once closed above, it will seal the fate of gold’s bear market and confirm a new bull market.
Phoebe July 8, 2016
Hi Larry,
According to your gold forecast chart, the gold price is lower in mid August than July, so can I buy gold in mid August.
Best regards,
Phoebe
jim July 8, 2016
someone asked whats support levels for jnug i have 200 and 160 then 100 fyi a gap at 200 to 210 hope that helps
Kathy July 8, 2016
I look forward to your insights.
Vinman July 8, 2016
Ronald
I believe Duetsche Bank has anywhere from 50-70 Trillion of those derivatives and Citibank, BOA and JPM are not that far behind although I think the Italian banks are the next domino to fall and the Italian banks will probably be the ones to start a catastrophic chain reaction that will implode the banking system !
Ronald E. Baker July 7, 2016
From LIBOR to oil, diamonds and derivatives, sadly just about every market is distorted or manipulated to some degree. There is ample evidence that Gold and silver markets are little different. Government has every reason to participate as they print endless Tsunamis of fiat money. Since the repeal of the Glass-Steagall Act, banking has moved into these uncharted un-patrolled waters big time with tacit government support. That is why forecasting, based upon historic cycles, has become so unreliable. The real worry are $900 Trillions of derivatives that no government or Central Bank can clear, soon to blow-up.
Pete July 7, 2016
Larry,
Brad Hoppman from Uncommon Wisdom Daily has released a video aimed at convincing his viewers that the price of gold has been manipulated for decades, you’ve denied the claim that gold prices are manipulated, what to think.
Watch the video: “The Great Gold Coverup.” This is relevant to your readers.
In the end he asserts that China will be able to require all gold trades via paper or computer must have physical gold on hand to backup that trade, versus just claiming so.
Once the world realizes there is only a fraction of real gold to claimed gold, the price will skyrocket. So only those people who hold physical gold will be on the winning side, those with paper or computer gold, not so much.
Am I interpreting this correctly?
Dave B July 6, 2016
Great perspectives from Larrys clan. The central bankers set up this situation assuming they could manage the deflationary downdraft using monetary tools. Well, we are finding flaws in that plan as Brexit and other growth and political fears pop the bankers Bubbles. Not sure anyone knows how this cycle will play out. I think we need to be liquid yet diversified and be a bit contrarian here. Focusing on capital preservation seems prudent until we have a view of our new reality from a political, growth and fear index perspective. Emotions can tank any logical plan.
Vinman July 6, 2016
Larry would you recommend Inverse Market ETF’s as a good way to play the 20% to 30% downside ????
sqkc July 6, 2016
Those X2 X3 ETF are widow makers.
John C. July 6, 2016
I bought 6 different junior mining shares last Friday and they are up between 5% to 13% so far. I am really excited about these returns after BREXIT. They are going straight up as you are predicting.
Looks like I should set 5% or 10% stops if you say it’s too early..
I am about 45% in cash and have 5% of my portfolio in gold/silver as a hedge.
Does this strategy seem sound for a 57 year old retiree?
Thanks in advance.
Paul July 6, 2016
What is your view on JNUG what do you think it might go down to with the correction.
j. clark July 6, 2016
You said,,,In other words, it’s the crashes, like we are seeing now in stocks, that pave the way for the next bull run higher.
I agree this is the normal routine. What is not normal is so much of the world in debt. Monopoly money is the new method of paying for the worlds growth and welfare states. They may keep the ball in the air for a while, but believe me, Mr. Market has a revelation for the world. When money is devalued, when a can of beans goes from fifty cents to two to five bucks, when riots are the norm world wide, when the power grids go down, well hell, that’s what it’s going to be, HELL.
JM July 6, 2016
Glad I did not wait. Another 13% today on DRD.
Stop Limit will reap approx. 140% profits if correction comes.
Real Wealth did trigger me to buy one that is up over 30%.
Noteriety July 6, 2016
If Larry Edelson is predicting that Gold will rise to 5,000/oz, why on earth would you chance waiting until another Gold correction from 1360 to at best 1180?
If you do the math, the risk of waiting is not justifiable.
Jeff Grann July 7, 2016
Well if your stuck in an inverse such as DUST, that you bought before BREXIT hoping gold would settle around 1175……
David Sims July 6, 2016
Say guys I’m just a middle class working class man. I’m 61 and just wanted to say that I’ve been reading and hearing about this impending Crash / Depression/ since I was a teenager in the turbulent sixties. My sister who is eight years older than me concurs with my assesment. Is it possible that no one is able to predict when there will be this so called coming meltdown that is supposed to be wore than the 30’s depression? I remember when I was a kid growing up, a neighbor had property on a lake in northern Michigan he purchased in 1957. My dad purchased a lot at the same time. In 1963 my father built a summer Cabin/home on the property. Our neighbor kept putting off building because he believed we were in the verge of another depression. Finally after several years he built his dream cabin. He was able to use it for a few years then got sick and passed away. He lost many many years of enjoyment worrying about the imminent depression that never occurred. Now another family purchased the cabin 10 years ago after his death and is currently enjoying his labor.
randy July 6, 2016
I agree the overall indices of the DOW, S&P & NASDAQ will correct. And, with Britain leaving the Euro and rumors of France, Greece and Italy considering their options, the Euro is becoming a doomed currency. All of that money will have to go someplace and where are the largest and deepest markets, along with the world’s reserve currency, than the U.S. stock markets? So, I expect those monies to flow into the U.S. stock market, along with gold, silver, and the other precious metals. Larry’s hypothesis makes perfect common sense.
Bart Snow July 6, 2016
And how much longer do you think the world’s reserve currency will be the US$ ?
Load up on gold- dump your stocks. The only thing keeping this market alive is the
billions of dollars being lent by banks and guaranteed by the government (us) to corporations to buy back their own shares. This reduces the number of shares and increases the stock price. A great way for CEO’s to increase their multi million dollar bonus’s . This will come to an end soon and the whole US economy will come tumbling down.
Vinman July 6, 2016
I think the next crisis starts with the Italian Banks which could lead to more bail ins and a domino effect throughout Europe’s banking sector which will collapse the Euro and Europe itself .
K R Mahajan July 6, 2016
Kindly tell me should I wait for low of Gold or buy at this level. If the low is there than what is the level
sqkc July 6, 2016
accumulating, buy over time..
William July 6, 2016
No correction until after the election. Market indexes will hit new highs by November. Dow 19K is possible. Stocks, bonds, and gold will all go up more. Maybe some selling in December and January.
randy July 6, 2016
RBC analyst agrees with Larry. He calls it a sell from here and a buy around $1,200 on Gold. Expects a pull back within next couple of months.
Bart Snow July 6, 2016
What do you expect RBC to say. Banks and Government’s hate gold. No money in it for them.
Vinman July 6, 2016
Randy
So far precious metals have avoided the Summer Doldrums ! Did you think the Brexit vote just delayed it a bit ????
Dave July 6, 2016
What is the point of talking about the “next correction”, specifically about waiting for it to occur before buying? All this does is waste the current rise as a money-making opportunity. Of course there’ll be another correction – there always is! But it is NEVER possible to say precisely when that will be, which is why there are so few successful market timers. Markets can go years without a correction, which is why being IN the market has been shown again and again to be critical for long-term success in investing. As for theories about fluctuations in the markets, they do nothing but state the obvious and are only ever accurate about what has already happened.
dbtaylor July 6, 2016
Larry; your AI models for gold and silver keep getting pushed out on the curve. Precious metals did not plunge after the Brexit vote. Interest rates are dropping and gold seems to be the hedge and better than a negative rate. All the inverse gold positions are stopped out with losses. So, question is what is next and what does the time frame look like now and why?
Thanks,
David
Gerald H. July 9, 2016
David, Larry will tell you to have patience and do not cry over spilled milk.
Bob July 6, 2016
Holding tight with my pm allocation. Nibbling away at some energy,as price of oil will be lifting off. Have enough cash to ride through the troubled times,but then again the house of cards could come tumbling down and the powers that be only resource is the printing press.
Ray F. July 6, 2016
Does the word “crapshoot” mean anything anymore. Risking capitol for meager possible gains is stupidity times 3. Again I say double down on your secondary income. Learn the rules for governmental handouts (while I am disgusted at the thought of handouts they may someday float your boat).
Frank July 6, 2016
The laws of physics don’t apply to financial markets.
sqkc July 6, 2016
Especially neural network patterns.. those are just arrays of coefficients based on past patterns, such as pattern recognition, e.g. hand written etc, apply to financial markets. Just nuts.
Dunkelmann July 7, 2016
Yes neural networks learn from past behaviour. Imagine teaching a car to drive on the right as has been the rule in the US for many years. Works fine until the rule changes. The neural network cannot predict that nor will it cope with it until it has enough data gathered over a period of time. Until it does, it is worse than useless, it is positively dangerous.
As a computer scientist I shudder at Larry’s reliance on NNs.
Pete July 6, 2016
I’m becoming less convinced that the last 30 years or 130 years can provided any insight into the next 30 years let alone 2 years or less. It’s not hard for an attentive person to see that peace isn’t going to break out soon, and that the global political and financial systems are breaking down, including the U.S., in a completely different way.
I no longer look to the past to predict the future.
Richard K July 6, 2016
What an optimist. Every bond market worldwide is teetering looking for yield that does not exist and you think the DOW will double! Forget currency wars or the possibility of the US losing world reserve currency status. Forget Brexit or the looney statement that Clinton did wrong but it’s not something that any prosecutor would handle…when people start to catch on those controlling the plays will push to speed up to the end game. Buy China yes but the Dow at 31,000? Course I never thought even one sane person would argue over who should go to what bathroom or what constitutes a marriage. So yeah, I can see the Dow at 31,000 while naked people dance in the streets worshiping ET. These days, “It could happen.”
tom ewing July 6, 2016
It has not happened yet. I’ve taken small losses or gains in gold stocks i sold anticipating your predicted correction. Missed out on a rise of TGLDX from 32.-44. Hmmmm Not to worry. I bought the 3 X bear funds for bonds…a big miss and against my own analysis and the Aden Sisters. You’re going to have to hurry to catch the “short term rise in gold to $1400″…I think the train left already. I’m still listening but its getting hard!! TE
Russ July 6, 2016
To Richard Black: Trusting Larrys’ advice I sold some on Friday and Monday; stocks which I also bought on the way up – an action which he didn’t recommend, I hope to re-establish my Positions after Pullback.
Ron July 6, 2016
Thanks for the stocks and metals update, but what about the dollar, US bonds, and oil & gas.
You used to tells us often your position on those and I would really like to know your analysis of those markets now and more regularly.
dgs July 6, 2016
Larry,
Last week you said it best to ride out the week and let the Brexit dust settle, then this week you would give an updated short term forecast for gold. Question: Is the 2 sentence blip on the metals at the end of this article all we get? Other than the statement of “gold needs to correct drastically” there was no guidance to this statement. In other words, at what U$/oz gold price is that? Are you still holding to your ~ $1170 – $1180 prediction.
Sandor July 6, 2016
I am riding this last wave of the metals then shorting using Martin Armstrong’s computer Socrates as a marker .
Daley July 6, 2016
Thanks for the insight Larry. I recently retired and will be able to see this pattern unfold.
Mick Dundee July 6, 2016
If Gold and Silver closes the week at these prices will Larry then say G&S is a buy? Or has he now got hellbent on waiting for a pullback no matter what….and risk completely dropping the ball if price keeps trending up
Jerome July 6, 2016
Agree with you that there will be a correction ahead. Disagree with your statement about the dow hitting 31,000+.
1. what is your timeframe for 31,000? Unless the US turns out to be like Japan (Nikkei has never recovered), which frankly is impossible, the dow will eventually get there. You mentioned “next few years”. 5 years? 10 years? 50 years? the dow will very possibly hit 31,000 in 50 years.
2. I suspect you arrived at 31,000+ because the dow has roughly doubled from it’s 7,000+ levels since the last recession in 2008. I don’t think that’s very possible now. Remember, that achievement was reached with multiple, massive QEs. The dow got there with A LOT of help, which it can’t possibly be getting after this correction because:
3. The Feds can’t possibly fire up multiple rounds of massive QEs which they did the previous time. First, they just don’t have the resources anymore. Second, the last round of QE did not help the dow much. People have gotten around to the idea that QE is not a good thing. Remember, by printing money, you are taking a loan from the future. Somewhere down the road, this debt taken from the future will have to be paid back.
Thanks for writing this article.
Anthont F Lukes July 6, 2016
I agree and am sticking with you as always.
Anthony.
Phyllis Cooke July 6, 2016
Larry, I subscribe to your Real Wealth Report and I think Supercycle Trader. What else
can I do to protect my savings and investments? I am retired, 71 years old and
a bit nervous about what is going on in our country and world right now.
Gordon July 9, 2016
Yes Phyllis I respect Larry but I think in this new world order models etc. will just not show the way like in the past. People say history repeats itself but I think we are in an environment where this might not apply. Yes Larry touts 31,000 in funny money. Yes wheelbarrows full of money have taken place in the past. I just fear that Larry’s 31,000 could be priced in wheelbarrow money. We all know how that played out in the past.
gary Junkins July 6, 2016
Way to go Richard Black! I’m 74 and wish I had been smart enough to have purchased junior mining stocks!!! Gary Junkins
Geo July 6, 2016
I’ve made 25%-30% a year, even with all the volatility, for the last 4 years with index options. Anyone who buys stock (aside from very select circumstances like the upcoming gold rally) is a fool. It’s a guessing game that few win.
richard black July 6, 2016
I have been in junior mining stocks for sometime now and am comfortably sitting on doubles and triples but should I consider jumping out at these levels to re-establish at lower levels as we see a correction develop? I am not a trader but a longer term investor with speculative leanings and 80 years old.
Joseph July 6, 2016
Mr. Richard, congratulations on your success! Who knows how long this upswing in gold and gold miners may last? As the “hurricane” approaches, it’s natural for people to run into the house for shelter, which, in this case, are things such as Proctor & Gamble, Johnson and Johnson, etc…..and gold! Once the storm hits, and the shelter gets blown away, there’s no place to hide any longer.
What I’m saying is that, as the market sells off in earnest, gold will eventually sell off too! For your own sake, don’t get too greedy! If you take YOUR money out and play the “house’s” money, you CAN”T lose.
Alex Sharp July 10, 2016
I would suggest start turning some of that “house”: money into DUST.
Joseph July 6, 2016
Right on the mark, Larry! I agree with you completely…and your report today is right in line with articles I have seen from you recently on other web-sites. These articles describe your work with the Kondratieff, the Juglar, and the Kitchin cycles, all saying that the markets are about to crash and burn, continuing at least into the year 2020!! Glad to learn now that this downturn will all be over by this coming October. Thanks for the wonderful advice!
Peter July 6, 2016
Larry
What is your view on JNUG & NUGT?
Bill Grant July 8, 2016
Two days after the Brexit vote, I was up about one percent in my portfolio, all due to my 20% gold component of which the greatest contributor was JNUG, up 510 % in 3 months
Your bullishness on gold protected me. T hanks.
Ed H July 6, 2016
The main problem with your models is that they are based on past information. Never in modern history has there been such massive, irrational manipulation of world wide markets by central banks. I hope you are correct in your thesis but I see much ugliness ahead.
Dunkelmann July 7, 2016
Exactly – we are in uncharted territory and past data will not help.
Shaun July 9, 2016
I think you’re spot on target, Ed, and I think it’s the reason why Larry’s charts aren’t working right now, particularly with Gold, which he promised us would crash and retest the lows. Instead it has broken out and will likely continue to rise for now. I don’t think anyone has a clue what any investment will do in the near term, for never has central bank manipulation approached this level. When the levee breaks, however, and it will, it will be something to behold, and it will be too late to plan at that juncture.
UDO July 12, 2016
Shaun
you know more than Larry does ….for now .
Breakout everywhere and nobody believes it SPX to 2500 – gold up as well .
Ralph July 6, 2016
I agree. we could see a 15 to 20 percent correction in gold stocks. The move in gold stocks has been some what parabolic. Hard to say where ti stops but when it does look out below for a retest of 1300.