True, gold has rallied explosively to as high as $1,263.90 (nearest futures) on Thursday, February 11 and has elected my system’s weekly buy signal at $1,187.50, a sign of strength.
But I’m concerned. Reason: There has been a dramatic change in my neural net models, which bothers me.
You can see it for yourself, right here.
It is now showing that the high on February 11 may have been the high for this entire rally …
And that gold’s next big move will be back down into late May/early June, creating a lower low than was seen last December.
In other words, unless a monthly buy signal at $1,368.20 is soon hit (not likely) – new lows for the bear market that started in September 2011 remain a possibility.
This is troublesome, for it means one of two things:
A: Gold has already topped (temporarily) and a healthy pullback to test major support levels, as outlined above, is next. Tests that hold support, and then give way to a new leg higher in gold that closes above $1,368.20.
Or …
B. Gold has already topped and is instead headed to NEW LOWS moving into late May.
Obviously, those are two DRASTICALLY DIFFERENT scenarios. So let’s look at what the two have in common: A very high probability that gold has already topped, and may not make it to the $1,368 monthly resistance, buy signal.
And instead, we are on the verge of another very sharp move lower.
BOTTOM LINE: This is NOT the time to buy gold. Or any precious metals or miners.
So I am afraid my advice in my last issue no longer applies to the precious metals. I will not be looking to add to existing positions in UGLD or USLV.
Instead, I believe it’s time to take the profits you have in each off the table, and wait instead for clarification as to which above scenario gold is entering, A or B.
Details on how to take profits in a minute.
Let’s talk oil now: It’s had a very smart rally again, bringing the nearby futures contract (April contract) to as high as $33.84 yesterday, before settling back down to the current $33.20 level.
All signals remain on track for the forecast rally I showed you in my timing chart, repeated here.
This is great news for your oil positions, which are starting to lift their heads.
Hold UWTI and all oil-related call option positions.
If not in UWTI or the UCO call options, you may purchase them now, at the market. Refer to the position table via the link below for specifics.
Hold your newly purchased shares in the natural gas ETF UNG with a good-till-canceled protective sell stop at $5.37.
Also hold the July 2016 UNG call options, strike price $8.00 (UNG160715C00008000).
Stock market: It continues to do its thing, whipping around, but overall headed lower. Hold UVXY with your protective sell stop in place at $33.58, good till canceled.
So, for today …
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For all members who own UGLD and/or USLV … A. SELL ALL of your shares in VelocityShares 3x Long Gold (UGLD) at $10.50 or better, good till canceled. If filled, immediately cancel your good-till-canceled protective sell stop for ALL of your shares of UGLD at $8.88. B. SELL ALL of your shares in VelocityShares 3x Long Silver (USLV) at $12.49 or better, good-till-canceled. If filled, immediately cancel your good-till-canceled protective sell stop for ALL of your shares of USLV at $11.32. |
Best wishes and stay tuned …
Larry
