Commodities will gain
Weekly newsletter from 22-26 November
Dear Members,
I would like to show my graduate to the subject of astrology. After struggling for some time in short-term forecast--I believe our long-term forecasts are still very much right on--planets put me back on track in the weekly predictions during the last few weeks in almost all markets.
I'd like to remind you to focus on the most important indicators that foretell some changes in the markets:
Mars are changing house, giving us very clear indications that only developed markets will get more interest from investors and emerging market would suffer setbacks--again a somewhat unbelievable proposition which actually started showing signs in the last two weeks, notably the success of GM's IPO. Money will be exiting from emerging market like India, China and Brazil, and following back to USA. This is also a first indicator that investors' faith in USA is coming back.
The fundamental reasons are:
Ø Stocks of emerging market are getting too expensive, PE ratios nearing or at historical highs
Ø Uncertainty in the currencies market and ongoing war in currency devaluation is prompting institutional investors to stay conservative and liquid
Ø China’s currency control and export scheme have been exposed and the world is slowly coming to realize that this zero-sum game is posing serious threat to developed countries' economic and fiscal health due to extreme imbalances in world trades. We all aware that it is bit too late but still world economy has to revert back to a more balanced status.
It was the first time that any Fed chairman has spoken so openly about a country's currency policy in damaging balances of world trade. Mr. Bernanke last week made it clear that China, by keeping Yuan artificially low, has been accumulating enormous foreign reserves and along the way ruling the world's export markets. There is no doubt that China is aware that by keeping their products cheap, it is killing other countries' exports. Yes this impacted hugely on many developed countries' industries as well as job markets. It is too late at this point to recover these damages, but at least Mr. Bernanke has spoken out publicly. China immediately increased interest rates by 0.50 basis points, and Hong Kong authorities have announced that they taking measures to cool down housing markets.
Anyway, one thing has become very clear is that big institutional money is coming back to focus on USA and US economy.
Lately Uranium stocks remained strong and we recommend that you continue to follow this trend as it develops.
This week newsletter from 22-26 November
GOLD
This week gold will trade in a very narrow range, so any weakness should taken as a buying opportunity. During this week from Monday to Thursday morning gold will trade in both sides, up and down. Any fall should be taken as a buying opportunity and any sharp rise should be taken as a profit taking one. We don’t recommend any shorts in gold at this stage.
Late Thursday gold prices will move sharply, and the rising trend will remain on Friday. So any one with shorts can cover positions before Thursday. Those who like to buy can build positions on weakness during this week as palnets are saying, "metals are in positive trend".
Trading range from Monday to Wednesday will be $1,334 to $1,363, and from Thursday to Friday $1,345 to $1,381 or even a bit higher.
HUI Index will gain sharply so get in metal stocks on Wednesday.
SILVER
Lately silver has been trading in a very volatile fashion. You won’t find yourself lucky if you were trading with stop loss because movements on both sides have been drastic and sudden. This week time has come to accumulate silver again. We don’t see gold and silver breaking lower sides of last week during this week.
Monday to Wednesday, both side movements will come so buy on falls and sell on sharp rises. Trading range will be $25.59 to $27.59.
From middle of Thursday prices of silver will rise sharply and this rising trend will continue on Friday. During these last two days silver can move up to $29.50 so it is very clear that silver will be in a rising trend during this week.
BASE METALS
During this week palladium and copper will move up sharply from late Wednesday. Venus is indicating huge up move in Palladium prices and we won’t be surprised if a rise of 20% transpire in the next two weeks. It means that Palladium prices can easily touch $855. Buy Palladium and palladium stock (PAL) during this coming move.
Copper prices will also move up so accumulate copper during this week on any weakness. Next ten days copper prices will move above $400. Lower side copper can touch $373.80.
Platinum prices will remain in a sideway trend and we don’t recommend any trade in platinum.
STOCK MARKET
This week Monday to Wednesday all major markets will trade in sideways. Thursday and Friday all major markets will move up sharply. Don’t hold any shorts in markets from Tuesday onwards. Buy December S&P call of 1,250 or DOW 11,500, as we won’t be surprised at all if Dow hits even 12,000 or above by year end.
European market will follow Dow so we don’t see weakness in European market as well.
Asian markets will trade sideways for the first three days of trading but Thursday and Friday they will gain some value. India's and China's struggle will continue, so avoid buying indexes in these two markets but yes selective stocks can still perform well. Tech stocks will gain strongly in the next one month so expect Nasdaq to outperform DOW and S&P.
Alternative energy stocks have been performing well, but Uranium stocks have outperformed each sector in the financial markets.
ZAAP, LTHU, ULBI and ACPW have performed well under electric and battery segment.
Short, Medium and longer term recommendation- Buy USA equities
TREASURY BOND
This week we see rising trend in thirty-year bond prices. Once again December contract of thirty- year bond will move toward 130. Trading range will be 126.5 to 130.0.
COFFEE/COTTON
This week coffee and cotton both will trade stably. We do see rising trend starting for coffee and cotton from the middle of the week. One can buy coffee and cotton on late Tuesday and hold positions for the next ten days.
Last week both coffee and cotton traded as predicted. This week on the higher side cotton can move up again to 139.80 and coffee to 228.
SUGAR/COCOA
We don’t recommend any buying in sugar though some upside is still pending. Higher side once again sugar can move to $27.79 but overall trend will remain weak. Cocoa will move up for a few days but we don’t see the kind of excitement in it as we see in coffee.
OIL
Last week oil and natural gas traded as per planetary indications. This week all major planets are supporting gas but support toward oil is not very strong so be careful trading oil. Sell oil around $84.80. Monday and Tuesday oil will come down so take a opportunity of selling on the rise. Wednesday and Thursday oil may rise.
Natural gas has moved up sharply on Friday as predicted. Buy gas if it comes back to $4.19 and on the higher side we expect $4.48.
GRAINS
Once again planets have guided us very well on grains' trend. We highly recommend buying grains on late Monday or Tuesday as sharp up-move will come in wheat and corn. This rising trend will last for the next ten days.
Trading range of December corn will be $530 to $554. Once it trades above $554 then the next target is $478. Wheat will trade positively as well. March contract will trade in the range of $679 to $745. Buy Wheat on late Monday or Tuesday.
Soybean will trade negatively, so any rising should be taken selling opportunity in bean. Trading range of bean will be $1,198 to $1,257.
Soy oil will trade in the range of $49 to $52.
Soy meal range will be $321 to $338. Soy oil and meal will trade along with corn's moves.
CURRENCIES
This week Monday to Thursday dollar index will trade positively. Any weakness in dollar should be taken as a buying opportunity. Trading range of dollar index will be 77.97 to 80.17. From late Thursday dollar may get a bit weaker and weakness will continue until Friday.
Australian dollar will remain weak against USD. Trading range will be 0.9845 to 0.9728. Monday, Tuesday and Thursday, sell on the rises. Wednesday to Friday buy on the falls as prices will recover.
British pound will trade the weakest during this week. Trading range will be 1.6020 to 1.5670. Sell on the rises and wait for lower predicted targets to come. Late Monday pound will start moving down and weak trend will continue till mid Tuesday. Late Tuesday pound will gain but again from Wednesday it will move down. Thursday cover all shorts as late Thursday and Friday we are seeing some weakness in USD.
Canadian dollar will follow Australian dollar. Trading range will be 0.9845 to 0.9621.
This week trading range for Euro will be 1.3742 to 1.3478. Monday, Tuesday and Wednesday euro will come down or trade weakly. Thursday and Friday it will trade positively so any weakness should be taken as a buying opportunity.
This week Yen will gain value against all major currencies. Against Dollar it will trade in the range of 1.1979 to 1.2230.
Swiss Franc will trade a bit positive on Monday but overall trend of Franc will remain weaker and planets don't support any buying in Franc. Trading range of franc will be 1.0130 to 0.9910.
Indian rupee, real and peso will trade weaker as well. Hold dollar positions against these currencies.
Best trades of week:
Buy metals on Thursday. Trade in and out in metals from Monday to Wednesday
Buy GAS at corrections as detailed above
Buy corn and coffee on Tuesday
REQUEST - Once again our humble request is please don’t forward our newsletter to any non-subscribers in any form. Subscription cost is nothing against the daily profit we get from the markets.
Thanks & God Bless, Mahendra Sharma, 21 Nov 2010