Consider this chart of crude oil. It’s one of the ugliest charts I’ve seen in a while.
While oil is trying hard to hold the $80 level, it will soon fail to do so. Instead, a shocking decline lies ahead for oil, one that will see it plunge to below $60 a barrel.
Keep your eyes on the $77.33 level. Once that gives way, oil will spin a lot of heads as it tumbles hard. Only a weekly closing above $92.87 would turn the immediate trend around for oil.
As for U.S. stocks, don’t expect much upside there either. While the broader U.S. stock markets are in a new long-term bull market, they remain vulnerable to the downside in the short term.
There’s simply too much global uncertainty right now, and I see the Dow falling to at least 11,500 and possibly 10,500 — before any sustainable rally develops.
My view:
- Continue to keep most of your liquid funds in cash, ready to be deployed on a moment’s notice, but as safe as can be right now. The best way: A short-term Treasury-only fund in the U.S., or equivalent.
- Despite gold’s weakness, hold on to all long-term gold holdings. You do not want to let go of those. Long term, gold is heading to well over $5,000 an ounce. Short term, gold is heading lower. Consider inverse gold ETFs, such as the ProShares UltraShort Gold (GLL), to hedge your long-term holdings.
- Consider prudent speculative positions to grow your wealth. Like those I have recommended in myReal Wealth Report, which are doing great right now as silver falls, as the euro struggles, and more.
Most of all, don’t let the pundits on Wall Street kid you. The Fed will not prop up the markets for the elections … Europe will not be able to solve its sovereign-debt crisis … corporate earnings have seen their best for the current cycle … and there are more dangers to your wealth right now than there have been in the recent past, since at least 2008.
So stay cautious, but ready to pounce on new opportunities as they unfold.
Best wishes,
Larry
P.S. My Real Wealth Report subscribers have side-stepped the crash in gold and silver mining shares … have hedged up most of their gold holdings from much-higher levels … and they are also enjoying pretty nifty gains in their speculative positions, including inverse ETFs on silver and the euro.
Wouldn’t you like to join them? All you have to do is click here to start your risk-free Real Wealth Report trial today!
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