Weekly Newsletter of 29 June - 03 July, 2015
This week Scorpio moon will create extra heat than usual
Dear Members,
In 2001 a positive era was born for euro and we were able to predict a fantastic move and that positive era ended in 2011 which we predicted. All last three of our books were constantly talking about the beginning of an era in which a crack is taking place in the EU and then a vertical spilt in EURO zone which will end in a nasty way for European investors including those in Germany.
Jupiter is about to change and Greece is getting ready to move out of the EU. It looks like a Disaster decision for Greece as well as Euro zone. By now we are aware the Greece Prime Minister has called for a referendum on the 5th of July but EU and Greece just walked away from the final talks on Saturday.
People of Greece will have the most difficult time during this weekend because what will happen on Monday looks scary for financial market and looks like that Greece banks and Greece stock market may remain close. Which currency will they use if they officially get out from the EU by 5 July. The only hope that is left is if the people of Greece stay with EU then they vote YES, and call for early elections, which still means that uncertainty may continue.
When there is international news of this kind most markets, currencies and gold trades aggressively. Most of you subscribe to our letter to get a clear answer from us, and at this stage we recommend staying away from the market for the next three trading days during Scorpio Moon. One can start buying the market from Thursday and keep adding positions in stocks. We don’t see the stocks moving sharply. Yes, they can open sharply lower on Monday, and then later in the day they can recover but we are not recommending any buying on Monday because it is a Scorpio Moon.
Euro is not in our buying list at all. It doesn’t matter whatever decision Greece makes because the EU is in a longer term bear market and it will keep falling. Any rise should be taken as a selling opportunity.
Gold traders are waiting for this kind of news to get physiological support from investors or new buyers but we don’t see any major support coming for gold this time. Initially gold can open higher on Monday but it won’t be able to hold value after this week.
The Scorpio Moon will play all kinds of uncertain role for market. It will force traders to make mistakes and we recommend taking a small holiday from the market for the next three days. Put in money from Thursday and Friday as well.
Our clear answer: By the end of the second week of July the markets will start moving higher and metals will start losing big value. Dollar will move higher and Thirty year will trade on both sides. Surely the Greece episode must be effecting other troubled countries in EU at this stage because many other countries are in a difficult situation. As mention since last many years that problem can keep coming up from EU but at this stage the overall trend of the market looks very positive so we won’t be worrying about the US Stock Market as well as emerging markets much at this stage after this week but in future coming in 2017 collapsing of EU, Euro and financial system meltdown will create worst time of history which we already predicted.
In the next four years only half of the countries that are there now will remain in the EU, so traders should start accepting any country going out of EU as not a big news.
The European Union is created to bring uncertainty. “THE DEATH OF THE EU WILL BE THE ONLY ANSWER FOR CERTAINTY for the world financial system”. I don’t have anything against the EU but unfortunately the time the EU created was so negative that eventually it has to die and that’s the reason our views on the European Union have been very negative since the last five years.
I will be in New York for four days and after that I will travel with my family to India for the next six weeks.
This is what we mentioned in “European sections” this year book “2015 Financial Predictions”:
EUROPEAN MARKETS
In the year 2014 the European markets traded mixed due to a slow recovery in the economy. Maria Draghi has used all the tools he can to stabilize the European economy and at this stage it still looks challenging. However, we are still optimistic about 2015 even though USA is still our favorite investment destination. Investing in Europe and losing value in currency terms may bring Net losses for international investors if they convert the money back from euro to their currency. Euro fell almost 13% in 2014 and none of the other European markets performed that well except for Switzerland. The astro chart of Europe and the EU looks mixed in 2015, but towards the end of the year some concerns will arise, and some conflict between the EU nations will take place, which may give an indication of the EU breaking up in the future coming time.
Spain, Italy and Greece still remain in the red zone so invest in these markets very cautiously. We do not expect any major disaster for the Euro zone in 2015, so buying on weakness in these markets should provide some good returns. To find these cycles one just has to follow the USA rising and falling cycles.
In 2015 the Euro uncertainty will continue but we still see a very positive trend in the US equity market so key European markets will follow the US market. I don’t have a clear answer as to how aggressively one should invest in the European market. A few people have asked me that “Mahendra, if S&P is going to 3200 then the European markets will follow S&P.” but I just don’t see this happening as I don't see any good astro cycle for Euro; all I see is euro constantly loosing value and eventually going to par value to dollar (which entails loosing 23% for current levels so even if the European market moves 23% higher, there will be no gains for international investors).
The real estate market will underperform in Europe but retailers, automobile, biotech and pharmaceutical sectors will do well so local investors can invest in these sectors. During 2015 DAX, CAC, FTSE, and the Swiss market will closely follow the USA market. Markets like Greece, Spain, Italy, Belgium, Hungry, Denmark, Ireland, Netherlands, Poland and Portugal will trade very volatile.
In the first quarter of 2015 we see Spain, Greece and Italy gaining value, but during the second quarter most of the European markets will fall. During the third quarter once again stability will come and the financial and banking sectors will start showing positive signs in Europe so we highly recommend investors to buy beaten banking stocks in countries like Greece, Spain and Italy. All leading European banks will underperform as compared to USA banks as US banks are out top picks in 2015.