It’s at times like these, when there are so many different threats all over the globe and markets are essentially shrugging them off and trading sideways …
When most investors and traders get anxious, start worrying about their positions and then make the biggest mistakes of their investing or trading careers.
For it’s at times like these, sideways, directionless markets, that try the souls of every investor.
I’ve often told you that more than 90% of day-to-day moves in any market are nothing but noise. That couldn’t be more true for the action of late in most markets.
Stocks up one day, down the next. Gold down one day, up the next. Oil up one day, crashing the next. Interest rates sliding one day, then soaring the next.
That’s why, throughout my trading career, I’ve always made it a point to step back from the markets, from the daily noise – not only in the price swings themselves but also from all the talking heads out there, most of whom have never had a penny of their own money on the line …
And take a look at the big picture, so I can see the forest for the trees. Objectivity is ESSENTIAL in this business and losing it is the kiss of death.
Fortunately, over the decades I’ve developed my methods and models with real world money on the line. Not some hypothetical game.
With the aid of modern computing, artificial intelligence (AI) and neural net computing capabilities …
I’ve been able to cut through all the noise in the market and see the real trends in motion, and timing-wise, when and where those trends may come to important turning points in the future.
So in today’s issue, rather than focus on the noise in the market, what Yellen said or didn’t say the other day … what Mario Draghi is up to or isn’t …
What Trump thinks of China … or what have you …
Let’s take a look at the major markets through the eyes of my 100% objective models, which eliminate emotion and all the noise in the markets.
Let’s start with none other than gold. Here is my latest forecast chart. As you can clearly see, the major trend of late has not changed: Gold is on track to decline into the end of May.
This is a weekly chart of gold. Daily and monthly models show the same pattern: A downtrend into late May.
Silver and the other precious metals will follow the same pattern.
The model would reverse to a long, or bullish trend through one of two different types of moves …
A. After establishing a solid low at the end of May. Ideally, a low above the $1,160 level.
Or …
B. Gold could somehow miraculously rally and close first above $1,287.50 and then the $1,302 level.
Given all my indicators that I monitor in addition to these charts, everything points to scenario A – a sharp pullback heading into late May.
Bottom line: Ignore the wiggles and squiggles, rumors and talking heads in the precious metals markets. All you need to know is what my neural net chart shows, and my A/B commentary above.
Now, let’s look at another very important market, the U.S. Dollar, via the Dollar Index.
As you can clearly see on this DX neural net chart, the main trend for the greenback is higher. Into June. Then even higher later this year and heading into 2017.
That’s clear. So why there are so many pundits out there talking again about the death of the dollar is beyond me. All because the dollar fell back a tiny bit over the past two weeks?
Give me a break! Two weeks doesn’t make a trend and it certainly doesn’t make a trend reversal. All it is is noise and propaganda, put out there by silly analysts who have no clue on what is happening with international capital flows. The really BIG money that is parking itself in the garage of the U.S. dollar.
Now, look again at this chart at the April time period, which I’ve framed out for you with a vertical red rectangle. See that violent swing down from a projected April 19 high?
That kind of move – a steep fall from a high and then a resumption of the main trend yet again – is merely a signpost that something big will unfold, probably a news event, in mid-April, that will shake the currency markets.
What could it be? I can only guess at this time. But what I can tell you with certainty is the following:
A. The dollar will gyrate WILDLY in the course of three days in April, between April 19 and April 22 – give or take a couple days of statistical variance.
But no matter how wild the gyrations are, or how steeply the dollar sells off …
B. The dollar is still in a major uptrend!
So how does that help us? Simple: If we know what is coming, we can prepare. Prepare to take profits on long dollar positions and prepare to buy the lows of the dollar panic that is coming in April.
Right now, you do not have any long dollar or short yen positions in the portfolio. But stay alert. I may be recommending some soon.
Now let’s look at crude oil. As expected, oil has indeed fallen back after its initial run higher.
But now look at what the weekly oil model is showing: The potential to soon see a sling-shot move to the upside into May 27.
The daily models also confirm. So why am I not recommending more oil positions?
I will be, soon. I need the rest of this week’s action to confirm a few more indicators on my models, and especially see oil hold the $37.56 level on a closing basis (May futures), heading into Friday.
So stay tuned: New opportunities are coming in oil.
Two More Extremely Important Forecast Charts to Make Note of:
The stock market, and, last but not least, a sector all of us are ready to jump all over: Mining.
First the stock market. Here is the latest AI, neural net output for the S&P 500.
It is simply amazing how the stock market has held up in such a tight trading range for well over a year now. The cycles, accordingly, are stretching out a bit.
The late output, shown in this chart, shows the market collapsing into the July/August time frame. After that crash, it will resume its long-term bull market to the upside, with the next leg up breaking through 18,500 and kick starting a move to Dow 31,000.
What I find most fascinating is how, like Wile E. Coyote, the market is suspended over a cliff, almost oblivious to the downside. These kinds of setups are rare, but deadly.
Time is being compressed, like a spring. But unlike a compressed spring that leads to a vault higher, the compressed spring in the stock market will lead to a devastating, seemingly come out of nowhere, type of collapse.
Bottom line: I remain bearish the stock market and will add to the existing bearish trades on a moment’s notice, so stay tuned!
Now, miners. This is a monthly AI neural net forecast for the Market Vectors Gold Miners ETF, symbol GDX. It is a great proxy for the mining sector.
The bottom line is this: The mining shares buys of a lifetime are right around the corner.
By the end of May, the recent rally in mining shares will have come and gone, and given up nearly all of its first leg up gains.
That means – without one shred of doubt in my mind – that we will be ready to fire away and start scooping up mining shares near record lows … with profit potential that will knock your socks off.
But buyer beware: The mining sector has undergone so many changes over the past few years, as one major mining company after another got taken to the cleaners …
That once, big, gloried senior miners are seeing their share prices trade with low volume and thin liquidity.
Therefore, I anticipate that come late May, Supercycle Trader, due to the changes in the mining sector just discussed …
Plus, the many thousands of members we have, will have to confine itself to trading only senior miners.
Not to worry. I will soon have for you a complete list of miners we will be trading. Seniors that have seen their share prices discounted by as much as 90% … but who are still producing gold and silver, and at gold or silver reserve valuations of as little as $0.10 on the dollar.
That’s it, for now. Hold all positions and related stops, and stay tuned. I expect new recommendations any day now.
Best wishes, as always…
Larry
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