Dear Friends,
Here is small part from last week newsletter, thanks to wave of nature for guiding us in right directions. Thanks & God Bless Mahendra Sharma
Keep long term Astro outlook in mind
(Weekly newsletter from 31 May to 4 June)
Dear Members,
Analysts, forecasters, and economists seem all trying to express their views on the future of EURO. Investors, however, are totally unsure about what will happen and which “experts” they should listen to. Yes, we all aware that there is huge debt problem in the Euro zone in many countries, and most investors today are still expecting that soon problems will be resolved in some ways, yet it’s also obvious that most investors have serious doubts deep in their minds. I know so because lately I have been receiving many emails asking about future of Euro and Euro zone.
This week I decided that let write once again a few important points which may help our members to make key decisions ahead. Let me first start from the past because the current is related to the past. Without the past we can’t enter into present, and without knowing the present we can’t enter into future confidently.
Let’s go back to the past:
In 2001, Saturn guided us to predict seven years of great boom cycle of Euro and doom cycle for US Dollar. We predicted that this cycle would give a new life to commodities, specially metals and oil, which we started recommending with full force.
In 2007, we highly recommended members to get out from Euro when it was 1.4220, because Saturn cycle was getting over. We came off track for almost nine months because euro went on to make a new high at 1.56. Most of analysts predicted doom for dollar and advised investors to sell dollar index as they predicting dollar index to go much lower (many high profile forecasters predicted that it’d hit 50-60. Many of these analyst were from metal communities, so called “gold bugs”, because they thought the fall of dollar would support gold. Yet I think they predicted fall of dollar because of many having personal love toward gold. At the time dollar Index was trading around 72.10.
2007-2008, mortgage and Leman crises broke out, and all major financial markets started sliding then nearly plummeting, and dollar emerged as the ultimate safe haven. Dollar buying was in our top list, and we kept recommending buying dollar for medium and longer terms. Dollar index started rebounding from low of 71.90 and reached 90.00.
Feb 2009, Saturn indicated huge turnaround in stock markets and we predicted fearlessly. In fact, I was predicted the exact day of market bottom of March 19, 2009, in a radio interview with CNBC. Soon money started moving into the markets because valuation started getting very attractive so for short term dollar index came down and it fell up to 76.00. Investors soon forgot about 2008 crash as liquidity everywhere surged due to quantitative easing.
March 2010, issues with Greece started taking shape, and Euro zone debt concerns started to worsen. Many of our new followers were stunned (not long-term members) that how we were able to predict on coming problems in the Euro zone way back in 2008. Once again Dollar started moving up, in the last five months dollar came from 76.00 to 87.45 and Euro came under unprecedented.
Current time:
Greece situation is going out of control. Cutting in spending programs is never liked by citizens and Greek are no exception. On other side Germans are not willing to just drop money out of sky without limit because it was Greece’s problem and they believed that Greece didn’t manage their debt and should face such consequences of their own. But finally there is no good choice left but for Euro zone ministers to agree to pump in one trillion dollars. Now Spain is waiting in the queue, and Portugal, and Italy. According to some researches, Euro zone might need at least nine to ten trillion to sort out all problems.
Many big investors are stuck with Euro positions, and many countries that diverted from Dollar are now stuck in the middle. And those who were making big noises that Euro would be replacing Dollar’s dominancy have suddenly disappeared because they were not aware of future as well as fundamental problems of Euro.
The current situation is very negative for euro and I won’t recommend buying euro at any price at this stage, although surely I can’t rule out dead-cat bounces here and there.
Let’s talk about future of Euro:
As we mentioned many times that Euro is entering its worst cycle, and current time is confirming that. Saturn and Jupiter, both major planets, are not supporting. One thing we know for sure is that astro time cycle is very negative for Euro. Saturn is in damaging mood so it may destroy Euro completely within seven years. If I am a currency fund manager I won’t buy any euro even at par value or even at 0.50, I also won’t keep single euro in assets (same I advised even last year).
I advise here that please get out from all kind of assets from Euro. If you don’t have any other option then please keep your house and transfer the rest into Dollar assets. There will be continuing problems within the sixteen member nations without interruption. Germany may try to help one by one Euro countries but in the end these rescues will bring problems back to Germany and people of Germany will do deadly protest. This protest which will be like revolutions and Euro will start losing value drastically like Indonesia Rupiah.
We expect Euro to reach 1.12 by end of year. Eventually Euro Union will collapse and by that time Euro may trade around 0.50, and after that Euro may be discontinued as a currency within seven years. So in the end it may cost 5 to 10 Euro to buy a dollar.
Let’s see what this week indicates for all major markets: USA markets will remain closed on Monday for Memorial Day.
Weekly Newsletter from 31 May to 4 June 2010
GOLD/SILVER
Last week gold silver traded in mixed fashion. Monday is holiday in USA so we won’t see any major trend. Metal stocks will move down sharply as well…..
COPPER/PLATINUM/ZINK/PALLAIUM/ALLUMNIUM
This week base metals will trade…
COFFEE/COTTON
Last week cotton traded weak….
SUGAR/COCOA
This week sugar will remain…
STOCK MARKET
Last week all major markets traded as predicted. This week weaker trend will again dominate all major markets. Late Tuesday once again negative news about Euro concerns will start flowing into markets. This week FAZ, SMN, DTO, EDZ will be great trades again. GLD and ZSL (gold and silver short ETFs) will be great trades as well……
.
GRAINS
This week grains will Corn and Coffee will be best trades of the week. Avoid Wheat and Soymeal or you can hedge positions by selling wheat and soy against corn buying.
OIL
Last two months oil has been trading as predicted. Last week we predicted low of $67.30 and oil bounced back strongly from $67.30. It went to $75.79 and that was our higher side target. This week oil will trade weakly again so no need to buy oil on the fall. RB Gas and natural gas will move down significantly. Trading range of oil will be $74.89 to $68.20…...
CURRENCIES
I think traders and investors should watch currency market very closely as the currency trend will reveal many answers to questions in global financial markets. Dollar is in short, medium and longer term bull market so dollar should be in buying list foremost. Since last six months, one statement we have kept mentioning in each newsletter is that each of our members should have dollar index in their core positions.
This week Canadian and Australian will trade weakly again. One can sell Canadian around 0.9556 and Australian 0.8518. Both these currencies will move down sharply. We are expecting around three to four percent fall. We expect Canadian to fall up to 0.9235 and Australian 0.8130.
Side currencies like Indian Rupee, Rand and Peso will have major corrections as well. We expect two to three percent fall.
Euro will trade weak and we expect new lows during this week. Monday it may gain but during European closing it will start falling. Tuesday again it will open sideways. During intraday it will move up but again late hours in USA trading it will start moving down. Wednesday it will gain some value but Thursday it will fall again. Friday euro will remain weak. Trading range of Euro will be 1.2421 to 1.2020.
British pound will remain sideways so we don’t recommend any new trading in Pound during this week.
Swiss Franc will remain weak from late Tuesday to Thursday.
Yen will remain sideways or a bit week so avoid yen. No new trading during this week but from next week Yen will back into the game again and may hit a new high of 1.1510 by June 12.
Dollar will trade very stably. One shouldn’t miss any opportunity to buy it if it falls. Trading range will be 85.90 to 88.30. Thursday and Friday one should just load up with dollar index. By June 15 Dollar Index should reach 90.00.
Best trade of this week:
Buy dollar index on weakness
Buy SMN, FAZ, DTO, EDZ, Sell European and Asian markets
Buy as big move in coffee and corn on the way - watch our updates
Thanks & God Bless
Mahendra Sharma 30 May 2010