By Larry Edelson
There’s so much money to be made in the next few months that it’s mandatory I get my views out on the following topics, even if I have to be brief:

The Dow … Emerging economies, and … Gold and Oil.

Having said that, let’s get right to the heart of the matter, where I think you can make bundles of money in the months ahead.

The Dow May Have Hit Rock Bottom …
Based on several technical indicators that I monitor, I am willing to go on record with the following statement …

The October 10 nominal — meaning the non-inflation-adjusted — low in the Dow Jones Industrials, at 7,884.82, may well end up as the low for the entire bear market. I know you’re not hearing that anywhere else. And a lot of people will call me certifiably insane.

But that’s just fine with me. It wouldn’t be the first time … I was pretty much on my own and labeled a madman when, at the bottom of the Crash of 1987, I called for the Dow to make new highs within three years.

I was also a lone, crazy voice back in 2000 when I said gold was bottoming at $255 and headed to new record highs and that oil was a steal in the low teens and headlined into a rip-roaring bull market.

I was pretty much on my own when, in early 2001 — mind you before 9/11 — I called for the dollar to enter a multi-year bear market. I was also pretty much all on my own when, in late 2006, I said that if the Dow broke through the 11,400 level, it was headed to 14,000.

And at 14,000 in October of last year I told everyone who would listen that the Dow had peaked … to get the heck out of almost all stocks … and the U.S. economy faced a wakeup call from hell.

So I don’t mind being a lone voice now either. In fact, I prefer it that way. Some of the best market forecasts are made when you have almost no company in your camp. Mind you, even if I’m right and we have seen the lows in stocks, it does not preclude the possibility of future sharp downdrafts from occurring. Or even a retest of the lows that will make me look foolish.

But right now, I am confident that the rally you’re already starting to see in the stock markets — and in commodities — could continue for several weeks, possibly even several months.

It could easily send the Dow back to the 12,000 level. Gold back to $900. Oil back to $100. And that’s just for starters!

Does all this mean that I believe the credit crisis is over? No, it’s probably not over. So … Let’s Look At the Markets and Economy Realistically And Objectively as Savvy Investors and Traders …

A. Stock markets lead fundamentals. It’s perfectly normal to expect stocks to bottom before the fundamentals of the economy start to look any better. Indeed, during the Great Depression, the Dow bottomed in 1932. But bad economic news continued to stream out for another three years, with economic stats not showing any signs of turning up until 1935.

In the next great bear market, the 45% loss in the Dow between 1973 and 1974, the Dow rallied a whopping 53% from its 1974 low — even as bad economic news poured out of the economy for the next 18 months.

[Also note that toward the end of 1974, after the Dow had bottomed, inflation started to spike higher, reaching 10.3% by early 1976. Inflation continued rising all the way through 1980, blasting gold skyward to $850. The main cause: Just like today, massive money pumping by the Fed.]

Another, more recent example comes from Sweden. In the early 1990s, Sweden experienced a housing bust worse than what’s happening now in the U.S. Bad debts related to the housing collapse reached 12% of Sweden’s GDP, far greater than what we’re seeing in the U.S.

In September 1992, Sweden’s government injected capital into failing banks and implemented blanket depositor insurance.
In the 12 months that followed, Sweden’s stock market soared 42%, even while the economy continued to recede.

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