Here is the latest members-only bulletin for November from The Edelson Institute!
In this issue, I’ll walk you through the latest E-Wave cycle forecasts for several key markets, including gold, silver, mining shares, oil and stocks. And I’ll give you my outlook for each. So, let’s get started with gold.
The E-Wave cycle forecast for gold has been consistently calling for a December bottom, and a great buying opportunity as we move into 2018. The latest updated cycle chart (below) indicates an upturn date in late December. This has been pushed out a few weeks compared to the last forecast.
The good news is that a sizable rally should follow the turn date with gold, silver and other precious metals moving substantially higher into mid-2018, according to the cycles. That will be our next great buying opportunity. Until then, remain patient. I’ll be sure to alert you of any changes to the forecast.
The E-Wave cycle chart for silver looks nearly identical to gold: Drifting sideways-to-lower until late December, then a turn date to the upside.
Again, the upturn date has slid a bit further out in time, but the cycle models for all of the precious metals are coming into better agreement, which means a higher level of confidence in the forecast.
The good news for silver is the cycle forecast of a substantial, nearly parabolic move higher into mid-2008. Looking at the technical picture in terms of a likely upside price target; once silver clears resistance in the $18 per ounce range, we could see a straight shot up to $20 or even $25 an ounce – a move of almost 50%!
Platinum, as you can see below, indicates an earlier turn date. The first week of December. So, that may give us the earliest buying opportunity among the precious metals.
Junior mining shares have been consistently forecast to bottom ahead of gold and silver and also to turn substantially higher into 2018. The initial turn date prediction of October 27, as you can see in the cycle chart below, was exactly on target with the actual low of $31.61 for the VanEck Vectors Junior Gold Miners ETF (GDXJ) on the very same day.
The cycles now forecast a short-term rally into mid-December, followed by one last head-fake pullback in mining stocks, forming a double-bottom, before they blast off to the upside again in early 2018.
Like silver, the coming rally in mining shares should be substantial. As a group, the junior miners could easily gain 30% to 50% in the first half of next year. You can expect plenty of new buy recommendations coming your way just as soon as the timing is right.
Crude appears to have topped out already, as you can see in the E-wave cycle chart below. In fact, the forecast turn date of November 10 was just two days after the actual peak in oil on November 8 at $58.12 – very close to a bull’s-eye.
Oil could make another brief rally attempt into early December. Ditto for energy sector stocks. But the path of least resistance is then down for the entire month of December, and into early 2018.
So, any rally from here would be a good opportunity to lighten up on any of your energy holdings, and potentially go short using a well-timed inverse ETF trade. But wait for my signal before making your move.
Dow Jones Industrial Average:
The cycle forecasts for the Dow, S&P 500 and Nasdaq-100 remain in agreement, pointing to a sharp decline at year-end and into January. Just as the updated cycle chart below for the Dow clearly shows.
In fact, the Dow has declined the past two weeks straight as volatility spikes higher. But keep in mind, we have now entered the seasonally strongest period of the year for stocks. And today, the S&P, Nasdaq and other U.S. stock indices broke out to new 52-week highs.
This recent negative price action could be the prelude to a bigger decline that is long overdue, but I’m also open to the possibility that we’re seeing a cycle inversion in the stock market charts. In other words, the October 19 turn date in the Dow may have marked a low, and the January 19, 2018 turn date could in fact be a high.
It’s difficult to say for sure this is a cycle inversion. After all, it’s a holiday-shortened trading week, with markets closed Thursday and trading desks lightly staffed on Friday. So, it’s easier for institutions to push stocks to new highs on very light volume.
But next week is key. If stocks continue to make new highs, it will make sense to throw in the towel on our inverse ETFs, at least for now. And await the next turn date in mid-January for a potential market correction. Stay tuned.
Bottom line: December should bring us the buying opportunity of a lifetime in precious metals and mining stocks at long last. So be prepared to load up when the time is right. First, platinum should turn higher, followed closely by mining stocks, silver and gold.
At the same time, the cycles forecast declines in oil and the stock market in the months ahead. As for stocks, we may be facing a cycle inversion, so next week’s price action must be watched closely. Meanwhile, continue to hold your open positions and stay tuned for more updates.
The Edelson Institute