Despite the lackluster dog days of summer trading in the financial markets — nearly every single market on the board is now reaching critical inflection points.
I told my Real Wealth Report subscribers all about it in my latest issue — including my specific recommendations on how to seize this moment in time.
In today’s column, I will tell you what I am seeing — plus I’ll give you a road map to help you see for yourself where the fireworks are likely to begin in each of the major markets.
But before I do, let’s take a look at the major underlying fundamental forces at work.
I’m not going to bore you with all the details, nor am I going to address the stuff of corporate earnings, balance sheets, economic stats, etc.
For in the end, traditional types of analysis don’t matter all that much today.
What matters the most today is the psyche of the financial markets and the forces they are truly responding to, each market in its own way.
I see two major fundamental forces at work impacting all markets:
First and foremost is the ramping up of the war cycles that I have been warning you about for over two years.
|Just like the 1930s, the U.S. dollar is starting to show very resilient strength, due largely to frightened capital fleeing from other parts of the world, especially Europe.|
Make no mistake about it: The cycles of war that I have studied — starting in my college years over 38 years ago — are real.
They are based on scientific studies of both domestic and international war data extracted from the annals of Raymond Wheeler’s studies on war and subjected to rigorous fact-finding.
They are as concrete as the seasons of the year, and they tell you, in no uncertain terms, when society is likely to be most predisposed to conflict, both domestically and internationally.
The fact is that the war cycles are now ramping up all the way into the year 2020, and with an intensity that even I underestimated.
From Russia and Eastern Europe … to Nigeria … to Iraq and Syria … Jordan … Israel and Gaza.
From the Islamic State in Iraq and Syria (ISIS) killing thousands, beheading an American journalist, and threatening many more …
To China, brazenly occupying the South China Sea, the Senkaku and Spratly Islands, hunting down oil and gas resources, ignoring territorial rights of others, ready to wage war if need be …
To Ferguson, which is merely the beginning of civil unrest in our own country.
In Monday’s column, Martin told you how it is affecting families he personally knows in riskier parts of the world.
So imagine how geopolitical turmoil could be affecting large pension funds in other countries, funds with hundreds of billions of dollars.
Or large hedge funds whose managers are now adopting new trading styles — some even avoiding the commodity markets entirely, opting instead for venture capital investment in safer shores, like the U.S.
And if all that’s happening across the oceans isn’t bad enough, the war cycles won’t stop there …
Second, the draconian war-like measures that inept Western world leaders tend to implement every time their government’s balance sheets become bankrupt.
I’m talking about how leaders in Europe and the United States wage war against their own citizens.
How they hunt down the rich and raise a battle cry for class warfare … which later backfires by widening the gap between the rich and poor, often driving the rich out of town, along with their companies and jobs.
How they target the average citizen, by camouflaging hidden tax increases (such as Obamacare and the proposed myRA retirement plan) …
And how they brazenly implement actual wealth transfers from you to government coffers, such as Europe has done in the Cyprus haircut, forcing all bank depositors to pay when banks fail …
Or how they openly endorse the IMF’s recent 10 percent wealth surtax on every citizen, already in the works in Europe … and also actively considered behind closed doors in Washington.
Then there’s all that spying going on, all that trampling of basic rights to liberty, privacy and other basic freedoms.
It’s all part and parcel of how bankrupt empires fade away into the sunset, and we will be no different.
The ultimate end may be far away. But all of this is already beginning to have an astounding impact on financial markets.
The dollar for example, has now surged to its highest levels in almost a year, defying the pundits’ call for its immediate demise.
Or crude oil, its bear market about to end any day now, as it prepares for a major move higher.
Agricultural commodities, in a severe slump, but one which will end soon, leading to new bull markets in the prices of wheat, corn, soybeans.
Then there are the precious metals, where so many investors have given up hope: Yet despite the soaring dollar, gold, silver, platinum and palladium remain poised to soar in the weeks, months and years ahead.
Finally, consider the U.S. equity markets: The resilience you see in the stock market is for real, a sign of exactly what I’ve been warning you about …
That rising domestic and civil unrest and international conflict throughout the world is extremely bullish long-term for the U.S. equity markets.
Right now, my best advice is to watch my weekly system support and resistance levels, which I outline for you below, along with some short commentary.
For gold: Basing, building a new bull market. Importantly, the bullish forces for gold will gain complete control once the yellow metal closes above $1,406.80 on a weekly closing basis. But at no time must gold close below $1,259.90 — or the bear may suddenly return.
For silver: Same. Basing for a new bull market. Major resistance: $22.24. Major support: $19.20.
For mining shares, in general, per the ARCA Gold Bugs Index (HUI): Preparing for their next legs up. Major resistance: 252.43. Major support: 202.16.
Crude Oil: Current weakness putting the finishing touches on a major bottom formation. Major resistance: $104.35. Major support: $92.35.
Natural Gas: Same as crude oil, but extremely bullish long-term, with the potential to quadruple over the next three years. Major resistance: $4.1650. Major support: $3.58 to $3.72.
U.S. Dollar, basis the U.S. Dollar Index, nearest futures (DXU4): Just like the 1930s, the U.S. dollar is starting to show very resilient strength, due largely to frightened capital fleeing from other parts of the world, especially Europe. Major resistance: 82.330. Major support: 79.055.
U.S. Broad Equity Markets: The danger of a correction is still there. But, long-term, the U.S. equity markets are headed much higher. Via the broad-based S&P 500, major resistance is at 2,032.00. Major support: 1,889.50.
And remember, you can let me know what you think about precious metals, governments targeting their citizens, or anything else right here.
Best wishes, and stay safe …