Money To Be Made In The Dow, Gold, Silver, Dollar and Oil With These ETFs (SDOW, SPXU, GLL, ZSL, EUO, SCO)

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November 21, 2011 11:55pm NYSE:EUO NYSE:GLL

Larry Edelson: In last week’s video and in my Nov. 7 column, I gave you very specific forecasts on key markets: The Dow Industrials, gold, silver, the euro and oil.


I also gave you some suggestions on how to play those forecasts. Now, I’m happy to say, those forecasts seem to be coming to fruition.

So let’s review them, since the markets are making critical moves and there’s lots of money to be made!

First up, the Dow Industrials. Here’s what I said two weeks ago: “The Dow is still under the influence of a weekly sell signal that has not been reversed and would only be reversed if the Dow were to close above 12,498. For the S&P 500, the equivalent signal would be a close above the 1,307.25 level.”

And in last week’s video, I added that the “Dow was failing at massive resistance” and that it was “preparing for a new leg down.”

Over the past several trading sessions we did indeed see the Dow try to push higher, but now it’s succumbing to the selling forces at work. Those include a not-so-good economy in the U.S. … and a wickedly plunging European economy that’s being devastated by a sovereign debt crisis.

Now, here’s an updated chart of the Dow Industrials from last week’s video:

As you can clearly see, the Dow was repelled by overhead technical resistance, and it stumbled sharply last week. It is now on a path toward much lower levels, with the first support level coming in around 11,200, and then the previous low around the 10,300 to 10,400 level.

I’ve previously suggested inverse ETFs such as the ProShares UltraPro Short Dow30 ETF (NYSEARCA:SDOW) and the ProShares UltraPro Short S&P 500 Index Fund (NYSEARCA:SPXU) and others. Hold them!

Next, none other than gold, the market that seems to set off more emotional reactions than any other. Here’s what I said two weeks ago, “Gold would require a close above the $1,830 level to negate all the sell signals my system has generated.”

And in last week’s video I showed you a chart of gold, demonstrating the massive overhead resistance in gold, and telling you, in no uncertain terms, that “the pressure is still on gold” and that “you should refrain from adding any new positions or trading the long side on a short-term basis.”

Few believed me. But now, here we are and gold has plunged back down to near the $1,700 level, generating a very important sell signal by closing below $1,754.

Make no mistake about it: Gold is under pressure cyclically, technically from the charts, and fundamentally — because the crisis in Europe is sending hoards of investors into liquidation mode and into cash.

So while one might think the crisis in Europe is bullish for gold, it is not. The sovereign debt crisis will only become bullish again for gold once the United States meets the reaper with its debt crisis, which will become the biggest in the history of civilization.

Here’s an updated daily chart of gold. You can clearly see how gold’s attempt to get back above the $1,800 mark failed miserably, and now, how the next leg down should be underway.

Look for support at the following levels …

$1,696.50
$1,567.40
$1,432.90
$1,386.90
$1,253.80

I suggested a purchase of the ProShares UltraShort Gold ETF (NYSEARCA:GLL). If you acted on that suggestion, hold that position!

Now, to silver. In my previous column I told you that for silver to turn bullish again it would require a close above the $38.88 level. And in last week’s video I told you that I believed that “another devastating crash in silver was about to begin.”

With last week’s selloff from a high of $34.92 to a low of $30.92 as I pen this column, I believe silver’s next leg down has begun.

Warning: Once you see silver close below $29.13, the crash will be in full force. Though there are some support levels below $29, they are minor and I fully expect to see silver plunge to at least $25, and probably much lower.

You can see my latest silver chart here.

And here are my updated system support levels for silver:

$29.136
$27.981
$23.931
$23.341
$19.996
$19.521

I suggested you purchase the ProShares UltraShort Silver ETF (NYSEARCA:ZSL). If you acted on that suggestion, hold that position!

Now, the U.S. dollar. Here’s what I said two weeks ago: “Naturally, as cash leaves Europe and heads down a rabbit hole for safety, it’s going to … the dollar [since it’s] still the world’s reserve currency.” And in last week’s video, I told you that “everything I monitor tells me that the dollar is going to rally more now.”

Here’s a chart of the U.S. Dollar Index. As you can see, the dollar has staged a pretty significant rally, a rally that’s the precise opposite image of the euro, which is plunging.

Expect the dollar rally to continue. But bear fully in mind that it’s only a matter of time before the dollar’s bear market resumes.

I previously suggested an inverse ETF position on the euro, which is effectively like going long the dollar, via the ProShares UltraShort Euro ETF (NYSEARCA:EUO). If you acted on that suggestion, hold that position!

And now, to oil. While oil staged what seemed to be a powerful rally last week, soaring to over $100 a barrel — I repeat my recent warnings: “There is very little doubt in my mind that crude oil has experienced nothing more than a sharp, short-term rally that has done nothing to change the intermediate-term trend which remains bearish.

“For that trend to be reversed, oil would have to close above $100.93 on a Friday, weekly closing basis.”

Oil failed to close above that level. So I remain bearish on oil. I suggested buying the ProShares UltraShort DJ-UBS Crude Oil ETF (NYSEARCA:SCO). If you acted on that suggestion, hold that position!

Stay tuned!

Best wishes, as always …

Written By Larry Edelson From Uncommon Wisdom Daily

Uncommon Wisdom (UWD) is published by Weiss Research, Inc. and written by Sean Brodrick, Larry Edelson, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in UWD, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in UWD are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Andrea Baumwald, John Burke, Marci Campbell, Selene Ceballo, Amber Dakar, Roberto McGrath, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Marty Sleva, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.

This investment news is brought to you by Uncommon Wisdom. 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 http://www.uncommonwisdomdaily.com/.

 


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