Looking closely at my models over the weekend, there is no question that the precious metals and miners are acting stronger than expected. My AI models continue to forecast a decline into October. However, ignoring the recent strength would be a foolish thing to do.
The line in the sand remains a weekly closing in gold above $1,363.50. A closing above that level on the final day of trading of any week will indicate a continued cycle inversion into the October time frame. If that were to happen, gold would likely reach somewhere between $1,450 and $1,500 before peaking. Miners would increase another 10-20%.
If this were to happen, I would immediately jump on it for you.
However, it would be an even more bearish sign longer term. A market that does not correct when it is due to pullback, and instead begins another cycle inversion typically ends up crashing when it finally tops, giving up eventually as much as 100% of its gains, or more.
In other words, if another cycle inversion comes, we would then likely see new lows in gold and silver and miners, in early 2017.
So if you’re a real long-term bull, let’s hope we do not get another cycle inversion and that the market pulls back into October.
Either way, I stand ready to recommend the appropriate strategies for you.
Hold all positions and related stops, including the newly purchased shares in the Direxion Daily 20+ Year Treasury Bear 3x Shares ETF, per the last issue.
If you have not already acted on that recommendation, please do so immediately by:
| Using 3% of the funds you have allocated to this service, buy shares in Direxion Daily 20+ Year Treasury Bear 3x Shares, symbol TMV, at the market. Place a good-till-canceled protective sell stop at $14.87. |
Best wishes,
Larry
