Friday, 10 November 2006
I want you to know what I released on Thursday evening. If you would traded after this news released then you would have made unexpected big profit in copper and other areas.
Thanks & God Bless
Today I stand at a very crucial stage where most investors are convinced that the dollar is in deep trouble. Everyone is asking me what’s ahead for the US dollar after Zhou Xiaochuan, the governor of the People's Bank of China, mentioned at a conference in Frankfurt that China has very clear plans to diversify it reserves. This news arrived at a time when a lot of other rumors are circulating in the currencies market about a negative dollar. Many news agencies also reported that several other countries like the UAE, Qatar, Sweden and Russia would soon announce currency holdings diversification.
These news were very seriously taken by the investment community and without thinking deeply, they just started dumping the dollar and buying other currencies as well as commodities as though the entire world is changing from today! I must say that there is still a lot of immaturity in the minds of those who handle billions or is there a plan?
My job is to always try and give an overall picture, never to try to convince anyone. What is currently happening with the US Dollar is for good reason. It is always very difficult to hold on to something when time is changing. For instance this year in August people got tired and sold their holding position in grains and they went over the roof; in 2001 people got depressed and got out from metals and metals stocks. This is a unique hidden force, which normally creates an environment that diverts investors’ faith and belief. We all get a message from our sixth sense or from within us, which is normally right, but very few people actually follow it. Many ignore it because fear usually comes in the way and forces one not to believe the insight from within us.
Please read the above message a few times and you will get an answer that you are looking for.
Saturn and Jupiter are laughing at me and saying ‘Mahendra, you won't be able to keep most people in the dollar because nature will create fear and they will move away from it.
As I write about the dollar, I think that we are at a most interesting stage but unsurprisingly very few people believe it as fear has made them nervous. Indeed, the message from the media as well as the prevailing economic environment has compelled them to make different calculations. When I was talking about oil reaching $80 and it was at $18, I remember that a lot of people mocked me and declared that I had no idea about the economy and micro economy calculations. There argument was that if oil reached $80, the world economy would collapse and the running economic cycle would end. Well, oil reached $80 and everything in the world remained fully functional. Therefore it is sometimes difficult to believe, and this is same case now happening with the dollar, but time will be the answer.
Once again and in simple language, the dollar will rise strongly and it will touch historic highs within the next two year. If I am proven right and you hold a small position in the dollar, then I am sure that after two years you can plan your retirement.
Of course when there is a negative environment for the dollar and metals doesn't rise this is impossible and when oil is also moving up, then it is like adding fire to proton. Don't think that I will always come right because I just give an outline of what I see. As everyone knows, I see a great rise in metals though it will be from early next year. One can hold metals till early next week but after that don't expect metals to move up for a few weeks.
We recommended buying oil at low but sharp downward trend is on the way.
We were cautious on grains and that has proven right as on Thursday they moved down and will continue to trade in uncertainty. We will buy if they fall some more, and I will give a buying signal. For the time being however, I see grains trading sideway.
In the last two days coffee moved up quite nicely and has given us great returns. We sold part of it but are still holding another part. Hold the buying position but always sell a small portion from the holding when there is rising and we will sell around $118.
I see a sharp downward trend in the thirty-year bond from next week. I therefore recommend selling or taking short position.
Steel, Copper, Platinum, Zinc, Nickel and Aluminum should move down sharply in coming days, therefore please don't hold a single dollar’s investment in them, unless you are an industrialist and have to buy for business. All these metals won't see these prices again. I am expecting copper to fall sharply.
This market is very volatile, if you are making money in any buying or selling position, please quickly book profit and don't wait for the next day. We short gold and side metals on Monday and they gave us enough returns by Wednesday and we have to book if you are trader. WE ARE TRADING IN A DIFFERENT ERA OR TIME, WHERE ALL INVESTORS FROM AROUND THE GLOBE ARE INVOLVED. IT IS LIKE A FIGHT OR WAR HAPPENING IN THIS MARKET, SO PLAY SAFE AND ALWAYS BOOK PROFIT.
FRIDAY - MY SHORT TRADE WILL BE:
My orders are in to sell December BRITISH POUND, AUSTRALIAN DOLLAR AND CANADIAN DOLLAR. I WILL ALSO BUY MORE OF THE DOLLAR INDEX HERE AT $84.75.
I recommend that you also buy the dollar for the medium and long-term as you wont get this kind of opportunity again.
Sell unleaded gas and heating oil against the oil holding. We sold part of oil holding in Asian market and will sell partly in the US Market. The long-term oil is in a bear cycle.
We will sell side metals today as I see a great opportunity for selling.
Thanks & God Bless
Sharma Mahendra Thursday,
Santa Barbara 19:50 PM