Before I put new year newsletter I would like to reminde you again December note as I see still weakness in commodities and commodity index can crash:
I have decided to give an important message before I write the weekly prediction for each commodity: This week will be very negative for almost all commodities and I therefore recommend that you get out all position from commodities like metals, grains, energy and soft. Don’t add or buy any contract in commodities during the next.... Book profit.
We recommended selling the CRB Index - Very high leverage. The CRB Index came down from $412 to $399. One contract selling made 140% return."
I stated that the last two weeks of December was time to spend with family, and that is what I actually did: I am sure that you must have done the same. Today is the first day of the year 2007, and indications are that we shall have a less volatile period than 2006. At this time of year, everyone normally makes some money as the New Year starts on a positive note. Though the 2006 numbers were negative and the year marked with a lot of uncertainty, the good news is that 2007 will be positive for everyone, and I am happy for that.
I would like to take this opportunity to wish you a happy, healthy and wealthy 2007. Very commonly, we like to use the magic word “happy” but often don’t understand its profound meaning. We rarely attain the state of being that it connotes and usually apply it casually without really believing it. I wish that we could all understand the meaning of happy as we seek to attain and apply it fully in our lives. I wish that we all start on the right trail as we venture into the year 2007.
“Fear” is among the greatest threats to happiness. Indeed, how we manage our fears is linked to our happiness given that it is inevitable to encounter scaring situations in life. For example in the market, buyers are always afraid of the fall of prices, while sellers are scared of rises. There is a very strong fear of losing, but we still stand with hopes of making money. In the entire process, our minds and hearts are not at ease and the overriding emotion is usually that of fear.
Other businesses are usually not like that, but unfortunately the market has a lot of tension. This means that the Karmic path remains surrounded by negativity and happiness is pushed out. I would like to explore this subject as we go along, so that we can learn how one can enjoy working in the market and keep happiness around us. I have given a great deal of thought to this and I believe that making money is one thing; but making money peacefully and happily will bring great joy into your Karmic path. We should start 2007 this way, and I will do my best to guide you onto this path.
I am not saying that everyone who trades in the market is an unhappy person, not at all. However, we should start our Karmic path this year without fear and we will flourish. Indeed, my commitment from today is to write about trading the market with joy and without fear.
You all are intelligent and unique human beings, and each person has unique abilities. In our various fields, we are all students who become better with time, eventually also becoming teachers. Interestingly, teachers also become students but remain above those who they are teaching. With time however, the teacher normally remains at the same place while the student goes on to achieve far above what was taught earlier by the teacher.
This only happens because of our Karmic path (of our hard work and commitment, which makes the brain to start working above the common or normal level). This is a continuous cycle, and that’s why we see new things coming up everyday as a new innovation surpasses the previous one. What we have is “a race of brains, not race of human beings. It is a unique fight that is akin to a war occurring in millions and billions of human brains”. I still search for “happiness” in the midst of all this, as success breeds more hunger in brains. It is only happiness that can make brains calm, and to me happiness is satisfaction at the end of a race where nature produces a certain result and you remain calm and master success without worries or fear.
Lets try and put our brains onto the path of happiness and I am sure that success will walk with you. I will try to give trades that may give you happiness, especially short-term trades. These will have both fun and build confidence, and once there is confidence, then there’s no place for fear.
Today I am only including the newsletter for this week. On Wednesday I shall write the 2007 outlook.
WEEKLY FINANCIAL NEWSLETTER FOR 2 TO 5 JANUARY 2007.
Gold should open higher on Tuesday, but likely to give up the gains by end of the day or from Wednesday. I therefore don’t recommend any new short-term buying in gold. This week gold should keep moving down till the last hour of Thursday’s trading. Though it may rise a little at the end of Thursday or Friday, gold should remain weak.
We should plan to buy gold soon, but it certainly won’t be during this week.
The trading range for gold will be $639.90 to $626.80. If it breaks $626.80, then $618.80 will be the next target, therefore watch the prices and trade accordingly.
Metal stocks should move sideway or a bit weakly during this week.
Silver will trade move positively than gold during this week from Thursday. I therefore recommend buying silver from Thursday. Overall, silver will have mixed results for this week. The trading range for silver will be $12.98 to $12.68. The strategy for silver will be selling at higher opening on Tuesday in the European market and buying on Tuesday during the middle or at the end of the day in
During the last quarter of 2006, all these metals were non-performers and we did the right thing by not trading in them. This week they will all remain directionless and I therefore don’t recommend any new buying in them. As a matter of fact, it is time to sell base metal stocks, especially stocks like copper, aluminum, zinc and nickel because stocks related these metals will not have a good time.
If copper prices fall to 272.80, then I may recommend buying. One must however remember that the long-term bull market in copper has already ended. Platinum prices will also move down, therefore take the opportunity to sell if they rise on Tuesday and Wednesday. Palladium prices will remain quiet hence there is no need to block your money in this.
NOTE: If metals break predicted prices will bring sharp fall toward to new low.
This week stock indexes will trade in a confusing manner. All major European and Asian markets will remain directionless or weak on Tuesday and Wednesday. They will once again fail to keep their heads above water on Thursday and Friday. Indications are therefore that investors will be very confused with the market during the first week of 2007.
During this week bond prices will give mixed indications though I don’t see much volatility. Avoid taking any new positions in it, as we shall start trading bonds from next week. Watch out for my weekly position for the bond from next week.
I have been recommending not trading in coffee for the last two weeks because mercury wasn’t giving direction. This week, avoid any new trade in coffee for the next three days, though one can take a small buying position on Friday.
The trading range for coffee will be 126.80 to 121.80, therefore sell if it reaches the higher side and sell if it reaches lower side.
This week cotton prices should trade in the positive direction and those who bought on my recommendation can therefore continue holding that position, and one can look for a 59 to 60 percent profit range. Buy cotton on Thursday’s opening.
Sugar prices crazily went up during the first half of 2006 but thanks to the planetary movement we were able to spot the high and recommended selling around $18.50. Prices sharply came down in the second half and I don’t expect any major rise in the near future. This week’s outlook is different compared to the longer-term view because I recommend buying sugar on Tuesday or Wednesday for the short-term. Hold your buying position till next week and from there I see sugar prices moving below $10.00. One should therefore take a selling opportunity during this rally of the next five days. Those who are buying on my recommendation should reverse the position after making some profit.
Lumber prices will remain weak and I therefore don’t recommend any new buying. As a matter of fact, I see lumber prices making a new low and one should therefore avoid any buying.
Orange juice made a high in the last quarter of 2006 and has remained towards the high. However, I don’t see any rise in it from now onwards. This week orange prices may try to rise on Thursday or Friday, and I see a sharp correction if they fail.
Grains surprised many floor traders on the Chicago Board trading floor in the second half of 2006, but thanks to Jupiter we were able to read this rising trend well in advance. Many of my members have actually made a fortune trading grains. I am still very optimistic regarding the future price trend, but for the short-term the outlook doesn’t advise staying in the buying position. We shall be buying soon but that will be after some corrections that will occur any time.
This week I see grain prices starting to give up gains made last week. I in fact recommend that you take a short position in grains.
From early August 2006, I kept telling investors that the bull market in oil was over and indeed we have witnessed a weaker trend in oil for the last 5 months. I don’t see any new rising trend for oil in the short-term but it may rise at the end of the first quarter of 2007. Oil should trade weakly or sideways during the first two days of this week, but it should rise around three percent on Thursday and Friday. If it however fails to rise on Thursday and Friday, then I see prices collapsing more than ten percent in a few weeks. Please therefore watch the trend on Thursday and Friday and make your decision accordingly.
The same applies for heating oil and unleaded gas, but the weak trend in natural gas should end by this week. However, do not expect gas to fall if oil falls. I may recommend natural gas during the next week, but I would like to first watch the trend for Thursday and Friday.
During the month of December the US dollar finally showed some signs of stability following the sharp correction in November. Out of ten analysts, eight still believe that there is weakness pending in the dollar and everybody is worried about diversifying currencies holding from different countries. Indeed, it is very challenging for my work because many reputable traders in banks and financial institutions are concerned about the dollar. Some have frankly written to me saying that they believe in me but might not buy dollar at this stage, even as they continue to watch my predictions on the dollar’s moves.
This week the dollar will trade sideways, but it will have a mixed trend overall against all currencies. It may lose some value against the Yen and gain some against the Swiss Franc and British pound. The Euro and the dollar will trade in a very narrow range but the Australian and Canadian dollars should move down.
This week, buy the Japanese Yen as well as the USD. Sell the Australian dollar and the British pound.
From next week I will be writing the trading range for all major currencies, grains, oil, as well as soft commodities. I will also try to give the daily moves of all major stock markets.
Finally, it is once again my humble request that you don’t forward this newsletter to non-subscribers. I wish and pray that 2007 will be your most successful year.
Thanks & God Bless
Mahendra Sharma, 1/1/2007