Dear Members,
Yesterday was eighth Tuesday when gold rebounded from negative to positive territory. Previous seven Tuesdays same story happened. Interesting point is on each Tuesday metals remained weak in Asian and European markets but moved up sharply after USA open. In astrology metals is controlled by Planet Mars which represent Tuesday, so each Tuesday move gives us indications that metals will hold gains.
Yesterday, consumer confidence came very negative but still Dow manages to move higher, commodities moved up sharply except grains and dollar had a nightmare. As a investor, I am too much concerned on USA monetary policy because Asia and many other countries is having very stable economic period but USA (key nation) is still suffer from jobs, consumer confidence, housing downward and growth but still Dow is moving higher and commodities are making new highs. Stock Markets are moving up and commodities rising is no benefits to common man, so I don’t know what Federal reserve has plan?
Too much money is available in market and it is too cheap to borrow for big guys and they are diversifying this free money in to markets rather than real growth? Anyway FED should be worrying about all this points not us but still we are concern for this artificial bubble which can burst any time after 2 Oct which is Saturday so any time from 4 October.
We have been predicting weakness in metals since last six weeks and metals have been moving higher, last week we gave up, but from this week we are again focusing on medium and longer term which shall be bull market for metals. In this week newsletter we mentioned that next week will testing time for all commodities and global stock markets. I won’t surprise at all if sudden fall comes in market and destroy everything, so I highly warn on coming fall after this week in each and every market including metals and stocks.
Alternative energy stocks are performing well, Uranium stocks are back in life and they should behave positively even markets crash any time after Monday.
I don’t recommend holding any big position in any markets except some puts and dollar.
Grains to remain weak with base metals so don’t hold any position there as well.
Shorter term top has been already achieved in metals during last week, this is just final run to scare everyone but they are in medium and longer term bull market so just hedge you position with puts if you holding longs. Base metals will remain weak from today. We see precious metals starts gaining again from end of October.
You are getting dollar Index for almost free and many are saying no to it and they say still more to fall but we see huge up move so keep adding dollar. Avoid Yen and Franc. Hold shorts in Australian, Canadian and Pound.
Avoid soft commodities, except cocoa and lumber. Take put positions in cotton and sugar. Coffee will remain sideway for some time before it starts making new highs.
NOTE: On higher side everything can move more one percent but downside is huge so those who like to take these kinds of risk can go ahead and take sell position in all markets. We are expecting something nasty any time after next week Monday.
It will be interesting to see next week. I highy recommend that you should listen one more time our 26 Feb 2009 radio interview with Jack Bouroudjian CNBC Contributor of Chicago on stock market. Market trun around on 7 March 2009 as predicted, now most uncertain time is starting after 2 Oct 2010 for one month. This interview is there on our website home page.
Thanks & God Bless
Mahendra Sharma, Tuesday Mid-night