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The stock market has topped. It got stretched too high, for too long, and needs to
pull back and wash out some diehard bulls and refresh itself before heading any higher. We are now in a bear market that could last anywhere from 3-10 months and the significance of it all is crucial to not only understanding what is going on, but also to protecting and growing your wealth. [This article does just that!]
The above introductory comments are edited excerpts from an article* by Larry Edelson (swingtradingdaily.com) entitled Stocks Down, Gold Up: More Fireworks to Come.
The following article is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Edelson goes on to say in further edited excerpts:
How low can the Dow go? Worse case, 13,937 [i.e. -18.5%]. Best case: 14,687.05 [i.e. -14%] – but it won’t be a vertical drop. There are bound to be some sharp rallies and zigzags along the way lower.
Questions:
- Why is the U.S. dollar stronger when the U.S. economy is weak at the knees?
- Why is the U.S. stock market is falling?
Are Stock Market & U.S. Dollar About to Crash? Will Gold Be the Major Benefactor?
Answers:
- Domestic U.S. investors who are selling stocks are moving back to cash, which is bullish for the U.S. dollar and, more forcefully,
- European investors are still flooding into the dollar, fearing a collapse in the euro (which has now started) and all the hair-brained schemes European leaders are devising to try and save the single-currency experiment:
- Like raising taxes to insane levels.
- Like embracing a European Union-wide policy of confiscating depositor money should another European bank fail and more, much more.
- Like bickering with British authorities now to try and get the U.K. to adopt the euro which Britain has rejected from the outset of the currency.
- The war cycles I have been warning you about are ramping up at a feverish pitch:
- Ukraine crumbling.
- Israel and Hamas literally now at war.
- Japan changing its 60-year nonaggression pact, freeing up its military to confront China,
- and more.
- Crude oil is now building a stronger base than I had expected, and will likely soon launch higher. I do expect one more pullback in the price of oil, which we are getting now but soon, oil could jump to $112, then even higher, to $124, before it takes another breather.
- Mining shares — also as I have warned you — are now soaring like a rocket. Some mining shares are up 20% in just the past week and 30%, even 40%, over the past month. Don’t say I didn’t tell you so, I did, but don’t worry because mining shares are among the most undervalued equities on the planet. Over the next few years, I see many of them (not all), doubling and then doubling again, while others soar 500%, 600% and more.
- Deflation has now migrated to the food sector, with the prices of soybeans, wheat, corn, and soybean oil literally collapsing:
- Corn prices have shed 25% since April.
- Beans, 18% since May 23.
- Wheat, 26% since May 9.
Crazy markets you say? They’re not crazy at all. They are doing exactly what they should be doing, exactly what I have forecast and expected.
Sure, my timing has been off a bit on some markets, like the stock market, but that correction appears to be finally here and, more importantly, once it ends, you will be able to get on board at much cheaper prices – and watch your equity investments grow like crazy as the Dow heads toward 31,000 over the next few years, not despite all the problems in the world today, but because of them!
My best counsel right now:
- Don’t expect your typical summer doldrums for any financial market this year. Instead, expect more fireworks.
- Don’t accept any common wisdom about the markets,
- like gold must go down if the dollar is strengthening
- or that mining shares must fall if the broad market slides.
- Would Gold & Silver Stocks Be Affected By Major Decline In S&P 500?
- Don’t buy into all the garbage out there that these markets are manipulated, and that you don’t have a fair chance at making money as a result. That too is pure hogwash. Both parts of it.
Instead, think for yourself, think out of the box, question everything you hear and read …or else you will end up one of the sheep in a pack unknowingly on your way to the slaughterhouse.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.swingtradingdaily.com/2014/07/14/stocks-down-gold-up-more-fireworks-to-come/ (Copyright 2014 SwingTradingDaily.com – All Rights Reserved)
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