Time to book some profit, but wave of nature says no shorts
Dear Members,
Last week metals, grains, energy and indexes traded positively. On the other hand dollar lost value dramatically against all major currencies. Soft commodities remained sideways or in a weaker trend. Dollar loosing value is a concerning sign for the shorter term as speculation is coming back into the market. If the world financial market wants to maintain a positive trend, dollar has to trade positively. Otherwise same risk will keep again and again what we saw in 2008 and in first half of 2011. I am not pro dollar, but if S&P wants to reach 3200 then dollar has to move up with S&P otherwise after every rise there will be corrections.
Thursday and Fridays weakness in dollar confirms that this week weakness in markets and commodities will come from any time late Tuesday or mid-day Wednesday. This correction will last for at least seven to eleven trading days before the most powerful cycle starts.
Corrections in S&P won’t be too much but commodities will surely give up gains sharply. Therefore I don’t recommend selling or shorting S&P, in fact any weakness should be taken as buying opportunity as I call this weakness a healthy correction for stocks.
Yes, commodities will have tough time for the next seven to nine days because we will see both sides volatilty, starting from late Tuesday or Wednesday and once these corrections are over we will come out with strong buying recommendations in few of our favorite commodities of the 2012.
Important – Dollars weakness shouldn’t be taken as a positive sign for S&P and commodities, otherwise the rise of dollar will bring pressure on commodities and stocks. Commodities, stocks and dollar should rise together and that is what I see. This is why we predicted the greatest rise of stocks of all time. If dollar falls then stocks will have a limited higher side and once again uncertainty will come. For example the last one month dollar has been going up but at the same time commodities are going up with the stock market and this is the healthiest combination. I know this analysis is very difficult to understand but these combinations will bring a very interesting time for all major markets and commodities.
The last two weeks uranium, metals, solar, battery and tech stocks moved up big time, and now is the time to book partly profit in these stocks but surely keep 50% of your position as corrections will be less in these stocks. The time is coming when you should be adding more uranium and silver mining stocks in your portfolio. I don’t recommend buying gold stocks for the next six months so those who like trade stocks should buy silver stocks as silver mining stocks will outperform in the 2012.
This week dollar will start trading positively, so the best trade will be buying dollar against Yen from Monday, and from Tuesday buying dollar against Euro, British pound and Australian dollar. Don’t short Swiss franc and Canadian dollar as they won’t fall much.
Three important things to remember:
1. In stocks and silver, one should keep acquiring call options of September and December 2012.
2. Don’t get out of call options, but in futures or stocks one can start booking profit on Monday.
3. Don’t go short in S&P and silver. Dollar around 78.50 buying will be a great trade here.
Late last year and yearly this year our advise has proven very prudent for investors, and once again I recommend investors to keep the medium and longer term picture in mind as these trades will give you the windfall.
Lest see what this week planetary positions indicates for all major markets;
Weekly newsletter from 30 January to 3 February 2012
GOLD/SILVER
This week we will see healthy corrections in gold
COPPER/PALLADIUM/PLATINUM
This week base metals will trade..
STOCK MARKET
Two months of constant buying advice in stocks and indexes…
COFFEE/COTTON
Our advice of avoiding both these soft commodities has proven very accurate …
COCOA/SUGAR/ORANGE JUICE
This week these soft commodities will remain…
TREASURY BOND
This week thirty year bond will trade mixed…
GRAINS
Last week grains prices remained mixed but on the positive side. This week Astro indicators are…
ENERGY
Last week oil remained in mixed trading range. Our daily flash news price range helped most of traders to trade in and out….
CURRENCIES
Last week all major currencies gained handsomely against USD…
Thanks & God Bless, Mahendra Sharma, Sunday 12.44 PM Santa Barbara