The funny thing is that gold and stocks currently seem to like the same thing: more money printing.

Treasury bonds keep falling in rates and we’re seeing a slowing global economy despite Trump’s tax cuts and central banks leaning towards easing. That has hurt stocks a bit, as has the recent near break-off in trade negotiations with China. Markets were fearing a currency war now that the trade war is at an impasse.

So, no surprise gold has been rallying here. But for stocks, the surprise is that they’re holding up as well as they are considering the slow growth foreshadowed by the bond markets and trade impasses.

Hence, my preferred scenario for stocks – with a minor pullback here and then a continued strong break up on the Dark Window scenario – still seems the most likely, especially with today’s strong rally.

The rally we saw was spurred largely by Trump’s decision to delay a few tariffs and put trade negotiations back on officials’ calendars in two weeks. Stocks loved that of course, and gold didn’t.

But what we’re seeing is also consistent with Andy Pancholi at marketimingreport.com reporting on Monday that he sees positive cycles for China over the same timeframe.

 

Gold’s Bad Break

Peter Schiff – who is also living in Puerto Rico – emailed me recently and asked when I would turn more bullish on gold. My answer was $1,525. I have been eyeing that as the key resistance; if pierced, gold would have substantially higher targets –$1,600 to as high as $1,800.

But Tuesday’s news caused gold to fall sharply just as the futures markets showed gold breaking up to $1,540+… that would have been a clear breakout. Is this the end for gold for now, or is this news transitory? These two reversals in gold and stocks look convincing for now, and bullish for stocks.

Nasdaq to 10,000 by early next year

Stocks In the Spotlight

I have warned that stocks are also at a critical point; they could break up sharply towards 10,000 on the Nasdaq or down towards 5,700 –quite a spread! Given that stocks have held up as well as they have amidst the bad news on China and the bearish bond markets, we could be about to see that upside breakout soon now that the news has suddenly switched gears towards a trade deal instead of currency wars.

If we can hold the upward bottom trendline in this chart around 7,820 – and today’s 160-point rally at the open was a good start – this could be in motion. The breakout point would be around 8,500 on the Nasdaq and 27,500 on the Dow. The channel drawn would take us right up to my 10,000+ target between January and March of next year.

However, if stocks end up breaking down further, then the two targets continue to be about 7,290 on the less bearish side, and all the way down to 5,700 at the extreme.

The trends are more clear and bullish on stocks today, and may get clearer on gold quite soon. But this could be it for gold.

We’ll keep watching and guiding.

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Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.