When you have been around the markets as long as I have, one of the most important things you learn is that before every big trending move there is always a giant false move which traps the majority.
Let me explain by way of a recent example: Earlier this week, we saw the results of the Doha meeting over the weekend, where oil producers failed to agree on production cuts. And what happened Monday morning? Oil prices collapsed by as much as 7%.
But by the end of the day, oil prices were back to breakeven and in some cases even positive for the day.
Why? Because oil is in a new bull market. And the move down on the Doha news proved to be nothing more than that giant false move to first get the majority bearish.
What you are seeing now in gold and silver and in the euro – and conversely – in the dollar, is a similar type of giant false move. Almost everyone is now convinced that gold is ready to take off to the moon. Ditto for silver.
Others are convinced and even screaming the end of the world for the U.S. dollar. And still others think Europe has conquered its problems and may now recover to the point that it is once again one of the three major economies in the world.
We are even seeing the same thing occur with the U.S. stock market. It too is pressing maximum resistance levels between 18,000 – 18,500. Almost everyone believes the stock market is ready to explode to new highs.
Now let me be perfectly clear. Someday, yes, you will see a rip-roaring bull market in gold and silver, in the stock market and in other commodities – and they will head to price levels heretofore unknown.
But we are not there yet. In any of the assets I speak of today: Gold, silver, the euro, conversely the dollar, and the U.S. stock market, we do not have one single major buy signal.
That means we are witnessing that giant fake move that, just like oil earlier this week, sucks in the weak, unsophisticated investors and traders and then spits them out like mincemeat.
Right now, I want you to hold all existing positions as hard as it may be. I will give you a full update tomorrow, including my latest artificial intelligence and neural net forecasts for the major markets.
I know the last several weeks have not been easy. But I also know when a fake move is at hand. And I know how fake moves suck in the majority of investors only to shortly thereafter reverse and resume their major trends, making the savvy investors the rich ones.
Again, hold all positions and I will give you a full detailed update tomorrow.
Best wishes,
Larry
