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Enjoy this week letter as free copy..commodities on fire but will they able to hold?

     Dear Members,

Many agree that the scenario in the market has changed and the massive volatility is causing widespread anxiety. I am also worried about the strange volatility in the market, and the heavy price swings on both sides within short periods indicates that powerful players are becoming more of gamblers than real investors.  Unfortunately, it means that the major markets will lose the respect of real investors if the trend persists.

 

Astrologically, Mercury and Mars are responsible for the volatility, and the current one is partly due to Mercury, and it is set to continue until 17th February. Those markets or commodities that have made substantial gains or moving up continuously should begin to drop any time after 17th February. There will therefore be a bursting of the bubble in the commodity market.

 

My book is going to the printers next week and as soon as I have a copy in my hands, I shall announce the release of the “2008-09 World and Financial Prophecies.” Many of the predictions are frightening, while many are completely new and likely to baffle some readers and economists. I have devoted my best efforts to this book and sincerely dedicated myself to it. I therefore hope that it will give useful insights to all who read it. I never re-printed my 2004 book, but it continued getting a lot of interest long after it was sold out. This time the 2009-09 book is eagerly awaited and I hope to release it in the next few weeks. Many of my predictions in the last book have come true while a few have not, but I have gained a lot of love and respect from people from all over the world. This encouragement has given me the courage to release the new book.

 

I would like to say that this week will be the last one in which there will be volatility, after which a new stable trend will be born. Markets with therefore either begin to steadily rise, or they will drop bit by bit. Consequently, a one sided trend will be born from next week and one needs to be cautious while trading because this will be the final week we shall witness widespread volatility. My request is that you focus on my next week’s newsletter because it will present you with many of the answers that you are looking for.

 

 Here is this week’s newsletter from the 11th to the 15th of February.

 

GOLD & SILVER

Trading of gold and silver in the last week was per our predictions. We recommended buying last Thursday because I foresaw ending of weak trend on last Thursday and metals moving higher this week. During this week gold will begin to move up from Monday, and the rising movement will continue until early Wednesday morning. After that gold will begin to drop after the New York opening, and this 24 hours weak trend will continue during the mid trading session on Thursday.

 

In the last two hours in New York trading session gold will bounce back and trade positively on Friday. Meanwhile, Silver prices will follow the same path as gold and both metals will touch previous highs. I still don’t see metals crossing above predicted prices ($948.80, $17.88). Buy only for short term, No long term buying recommended as they are in weak trend.

 

PLATINUM, PALLADIUM, COPPER, ZINC & NICKEL

All these side metals traded quite positively on Thursday and Friday, with thin volumes in platinum and the problem in South African mining having lit a fire in platinum prices. I foresee platinum prices dropping from Tuesday ($2080), after which it will trade in volatility. What is certain is that Tuesday’s highest price will not come again. One should therefore monitor the trend and take position, but always trading with a very low leverage.

 

Copper and palladium will also decline sharply from Wednesday; therefore selling these metals will provide gains in the next week. Zinc and nickel will trade in a stable trend and those who want to buy these metals can therefore take a buying position on Monday. Both these metals will sharply rise in the course of the week.

 

COFFEE & COTTON

Coffee prices hit a new high last week and we expect that they will move higher this week. However, from Wednesday I see the beginning of a short term downwards trend which may last until next Tuesday. I expect a similar trend for cotton. Long term traders should hold their position in coffee as it moving towards $158.80

 

STOCK MARKET

All major stock markets are currently trading with a lot of volatility and my concern for the future trends in emerging and international markets is growing by the day. The economic situation in the USA is set to be unclear until the middle of May, and some may argue that a recession will severely hit the USA. At the same time, they are those who declare that there will be no recession. I do not wish to engage in that debate: what I know is that after the current volatility ends for the USA market (from May 2008); the market will begin to rise non-stop.

 

I see a positive trend in all markets on Monday and Tuesday, while they will trade on both sides from Wednesday to Friday. Thursday will be weak day. A sharp fall should be taken as a buying opportunity, while a sharp rise should be taken as an opportunity to sell.

 

The Asian and emerging markets will be weak including Japan and Australia. The Indian market is also set to be weak, though companies like Jyoti Ltd, NTPC and Sulzon should be in your buying list and against this buying you can Nifty or index heavy weight stocks.

 

European markets will trade weakly: Buy the USA and sell European market. The DOW will trade in the range of 12038 to 12418, but NASDAQ will trade better than the DOW. Buy alternative energy, metals and agricultural stocks.

 

LUMBER, SUGAR & ORANGE JUICE

We expected a positive trend in Lumber and this is what happened. This week lumber prices will move up on Monday and Tuesday, but they will drop again to the previous low levels.

 

Sugar prices will move higher from Wednesday in the last hour and they will gain sharply on Thursday and Friday. I see a gain of more than 8 percent in Sugar.

 

Orange juice will remain weak, therefore no trading is recommended.

 

GRAINS

Grain prices are trading with very high volatility. Wheat prices have reached historic highs and same thing has happened in Soy products. The greatest period that they could rise is for another three days, but I am much more worried about a fall in grains than about the rise. I have seen this in past, for instance in 2004 when soybean moved down six days in a row and prices tumbled from $1055 to $655.

 

Traders can take a short position in grains from Tuesday in wheat and soybean. Mercury will be changing direction, and this will bring down grains from next week. The targets for the next two months are $750 for Soy, $650 for Wheat and $380 for Soy oil. One should therefore take put options or sell calls.

 

Monday and Tuesday will be the right day to sell grains, Middle of week they will try to grain but sell again following week Monday.

 

OIL

Last week the trading of oil was as predicted. This week oil prices will be on the positive side, therefore I don’t recommend any selling. However, oil will trade weakly or sideway from mid Monday and Tuesday, but it will begin to rise sharply from Wednesday. As a matter of fact, it may even move up to $94.80. Maximum it can go once again $99.80.

 

Natural gas will trade sideways and without much volatility.

 

CURRENCIES

In the last week the Dollar gained sharply on Wednesday and Thursday and I expect the same for this week. On Monday the US Dollar will be stable, but it will be a little downcast on Tuesday. One should therefore take a buying opportunity on Tuesday as well as on Wednesday because the Dollar will rise more than two percent either on Thursday or Friday. I advise that you monitor the wave of the dollar and ignore all experts on their dollar predictions. I further urge that metal investors should not to go against the Dollar: keep buying metals on falling but don’t sell the Dollar as this currency is entering into a most unique era.

 

The decline of the Euro, Yen and Swiss Franc is set to continue for this week. I expect the Euro to hit 142.80 against the Dollar. The Australian and Canadian Dollars will be stable till Thursday morning, but they shall fall sharply from late Thursday or Friday.

 

ALTERNATIVE ENERGY - Buy LDK, YGE, TSL, EMKR, FSLR and FECL.

 

SAFE TRADES – BUY DOLLAR, BUY STOCKS, SELL GRAINS ON MONDAY, SELL METALS AND ENERGY ON HIGHER LEVEL. WE ARE VERY CLOSE TO END OF BULL CYCLE IN COMMODITIES WHICH INCLUDES ALSO METAL. 

 

Once again next newsletter will be most interesting one.

 

Finally, please don’t forward my newsletter to non-subscribers.

 

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Thanks and God Bless,

Mahendra Sharma, 10 Feb 2008

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