Why The Dow Jones Industrial Average Could Soar To 30,000

bearbull21Larry Edelson: The stock market is in trouble.

I believe that the interim top that I have been waiting for is finally here. I can see it in the thinning volume in the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) stocks.

I can see it in the smaller and smaller number of stocks that have led the recent advance, compared to the number that are actually falling.

I can see it in the way Europe and Asia’s markets are trading ― heavily, with pullbacks imminent in those markets as well.

And most important of all, I can see it in the action in the S&P 500 Index, which is dangerously close to a rather important sell signal on my trading systems.

Any stock market pullback will scare the heck out of most investors.

That sell signal is at 1,644.50 on the S&P 500 Index on a closing basis. As I pen this column (late Thursday evening) ― the index is trading below that level.

I’m sure we will soon see the index close below 1,644.50 and when it does, take it as your cue that the stock market is now in a corrective mode …

One that will find the S&P 500 fall, first to the 1,621 level, and then, much lower, to the 1,470 to 1,486 level.

From its current level, that would represent roughly a 10 percent pullback, give or take. Not a huge one, but enough of a pullback to scare the heck out of most investors.

If you are heavily invested in stocks, you may want to consider either stepping off to the sidelines now, or hedging up. One good way to do that would be to buy shares in the triple-leveraged inverse ETF, the ProShares UltraPro Short S&P 500 ETF (NYSEARCA:SPXU).

Now, don’t get me wrong. I am not turning outright bearish on the stock market. Any pullback you see now will simply be a well overdue correction. That’s it.

The new long-term bull in the stock market is alive and well. Almost no one thought we’d ever get to 15,000 and change in the Dow. But just as I said it would, we got there.

And just as I’ve also been forecasting, once this correction is out of the way, the Dow will start to head north again, and eventually, probably within three years’ time, we will see the Dow north of 21,000 — at a minimum …

And far more likely, pressing 30,000 or even higher.

It will blow away most investors. It will defy most analysts. And very few investors will actually profit from it.

But it will happen ― just like the Dow did when between 1932 and 1937 it soared 380 percent …

Even though the United States and the rest of the world sank deeper into depression …

 Even though unemployment actually continued to rise …

And even though corporate earnings stank and banks went out of business left and right.

So why did the Dow soar over 380 percent from its 1932 low? And why will it do it again, and soar more than 380 percent from its 2009 low, the equivalent?

It all has to do with Europe. Between 1932 and 1937 ― much like today ― Europe went completely and utterly bankrupt.

The same thing is going to happen again. Europe is going to go down the toilet. I have absolutely no doubt about it whatsoever.

That’s also going to send the dollar soaring, as trillions of euros seek out the relative safety of the U.S. dollar. Which is precisely why I suggested investing in the PowerShares DB US Dollar Index Bullish Fund (NYSEARCA:UUP), back in my March 4 column.

Larry EdelsonWritten By Larry Edelson From Money And Markets

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