Sunday , 1 October 2023

A Look into the Future for Stocks, the Dollar, and Gold

A cycles approach to the markets lets you peek into the future paths of market action in various assets so here is an updated glimpse into the future of some key markets using cycle analysis. Words: 1065

In further edited excerpts from the original article* Larry Edelson ( goes on to say:

The U.S. Stock Markets
The S&P 500 … is due to top out in late April/early May … From there on out both the 24- and 40-month cycles should exert a strong downward bias to the market that lasts for up to a full year with no abating in selling pressure until April 2011. That does not mean we will see a re-test of the March 2009 lows at 6,469 in the Dow … but I would not be surprised to see the Dow fall at least as low as 9,000, before beginning to recover again going into 2012.

[As such, with] the broad stock markets getting close to an important top, if you’re long the market and have profits, I would strongly consider grabbing as many of those profits as you can and prepare to soon short the broad markets, via inverse ETFs, such as the ProShares Short Trust S&P 500 (SH).

What about all the bearish news out there right now? The sovereign debt crisis, the plunging currencies in Europe, the renewed collapse of housing sales, and more? Don’t they scream SELL right now? No, they don’t.

News should never be used to time your trading and investing … Markets and individual securities and asset classes follow their own unique trading cycles and rhythms, and if you try to time your investing and trading based on news alone, or even pure fundamental analysis, you will never make any decent money in the markets, let alone keep that money. The only, truly accurate and profitable way to invest in the markets is to understand and quantify the markets differing personalities, which is what the rigorous study of market cycles does for you. Right now, for instance, although we are starting to see more negative news come to the forefront (as compared to the last nine or 10 months where the market was rallying), I can assure, the negative news you are hearing will pale in comparison to the news that will come out in the months ahead as the 40-month cycle for stocks turns down.

The U.S. Dollar
The short-term cycles for the U.S. dollar are now in rally mode BUT — very importantly — they’re not likely to cause the dollar to rally much, because:
a) they’re short term, and therefore, by definition, weaker than the longer-term 15 year cycle that is pointing lower and, therefore, negatively impacting the dollar.
b) previous instances of the 10-, 19- and 39-month cycles have NOT produced substantial rallies.

The dollar is not yet ready to meet its final fate but, rather, is likely to experience wild swings both up and down for the next year or so, and then, plunge into a tailspin in 2012, which I believe will also mark the birth of an entirely new monetary system leading to a single world currency, at least for international trade purposes.

As such, for the next year or so, it’s ok to keep your basic cash needs (basic savings, working cash to pay bills, etc.) in dollars but. to the extent you can, you should be preparing for the eventual and inevitable demise of the U.S. dollar as the world’s reserve currency.

I expect the U.S. dollar to lose at least 50% of its current purchasing power by 2012 so, while the dollar is not yet in danger of a total collapse, now is the time to plan to move most of your assets out of the dollar, with the goal of being 90% out of the dollar no later than this time next year, March 2011. That’s a bit early according to the cycles, but I would rather be early moving my money safely out of the dollar, than be late and caught in what will turn out to be the biggest currency disaster of all time.

Moving out of the dollar can take many forms, including:
a) moving money out of the country into safe offshore banking institutions that give you flexibility to move your money in and out of foreign currencies, stock investments, and especially gold.
b) buying contra-dollar investments, such as gold, but also other precious metals, oil, and other natural resources.

In the meantime, suffice it to say that we are in the throes of the dollar’s last days, and while there is no need to panic right now, there will be if you don’t keep the above cyclic picture and timing for the dollar collapse at the forefront of your thinking!

Referring to the 8.6 year cycle chart for gold, it should pull back slightly into late April, but then take off again to a new record high in August of this year and continue to point decisively higher into the January to March period of 2013, and where I fully expect gold to reach at least $2,300 an ounce, if not much higher.

The above look into the future for stocks, the dollar, and gold — are not something to take lightly. They are your roadmaps for the future, and, they are fully consistent with the underlying fundamentals that are unfolding right before your eyes …
a) The sovereign debt crisis now hitting Europe, and which will eventually smash upon our shores.
b) The plunging euro, pound and other currencies, which will also eventually smash our U.S. dollar.
c) The flight to quality and safety that is now starting to send gold higher into its next rocket blast to $1,500, and eventually, to $2,300 and possibly much higher.
d) And there’s more, much more, chaos and wild market swings coming in the months and years ahead.

To be forewarned, is to be prepared.

* (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit

Editor’s Note:
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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