Dear Members,
This part I have taken from this week’s newsletter as I felt it is important message for our members so please read carefully.
Weekly Financial outlook from 7 to 11 April
Must read this letter carefully line by line: Biotech and tech fall is scaring investors away, is this fall real or just short selling?
Dear Members,
Before I start this week’s most important letter of my advising career, I would like to humbly request you: Please don’t forward these letters to anyone; tell them to subscribe to their own. I know that there is mutual trust between us, so please don’t break this trust for a mere $500. The karma theory says that you have to pay in any form to gain or receive something. Investors who put thousands and millions on risk, then ask for free newsletters just sounds so disgusting. I hate to use these words, so please understand my feelings as I put so much effort to write these letters for you.
On Friday big name's, momentum and high value stocks were just melting down after the Job report. Investors started getting worried as the markets hit another all-time high on an intraday basis in the morning but many big names in biotech and tech just crashed which resulted into sharp fall in all major indexes. Many starting asking that Mahendra, is this a dangerous sign for the USA market? My answer is no for longer term but surely for the short term because S&P is not able to hold 1868 and Friday’s breaking surely concerning me. Two sectors (tech and biotech) were sucking a lot of money from fund managers in the last few years. Everyone wants to buy Apple, Google and GILD but lately fall is bring trigger selling from most of investors in both these widely held sector.
Surely big investors will be watching very closely these big name stocks or momentum stocks during this week because if this bull market is true then these stocks should stop falling and should get buyers around these levels as prices of most of the stocks have fallen sharply.
Last week commodities traded mixed as many are saying that they want to diversify but we don’t recommend any heavy pumping money into commodities at this stage. Surely one can take short term buying trades in commodity stocks (energy and metals), and from June onwards the story will be different so at this stage follow the Daily Flashnews and you will get the short term trades.
During last week dollar was clearly a winner, and should trade in same direction. Bond prices also gained on Friday with Japanese yen due to risk and volatility but we are not sure these trade will be good for hedging against risk.
Important note: If the markets fall from here then surely it can bring disaster because in the past, the astro cycle never allowed any market to fall from half way. This has only happened once, it was in 1987. The market always completed its bullish cycle pattern until the astro cycle remained bullish. The market always fell sharply once the positive astro cycle ended. This happened in 1929, 2000 and 2008.
I don’t know where I was in 1929 but surely we predicted the last two bullish cycle’s ending (2000 and 2008) successfully and at the same time we predicted the crash well in advance. We predicted the tech bubble in 1995 and we also predicted that this bubble would end in 1999 December. We predicted the stock and commodity rising cycle in 2001 and in 2007 we predicted the crash. Now current rising cycle we predicted on 26 February 2009 and we predicted S&P to hit 3200.
We are at the most important juncture at this stage. For the first time today I got 10% doubt on our predictions of the biggest bull market of history, where we see S&P reaching 3200 or even 5000.
If the market is ready to write a history then S&P should stabilize and start rising from the middle of the week. From next week it should come back strongly and tech/biotech should participate once again.
We still argue with everyone that tech and Biotech stocks are at great valuations because we refuse to agree with the old method of valuations which most fund manager’s, analyst and economists follow. I think the world has changed drastically in the last twenty years, and technology and healthcare are playing the most important role. Not many players are there even in these areas to serve world so we look at valuations differently. We understand the economy, fundamentals and macro as well but the astro cycle which guide us clearly about how the future world is going to be shaped and what human behavior patterns there will be.
So far in the last 30 years we were able to see all these changes very successfully through the astro cycles. I come from a very small village; in my village there was no electricity, until I was in the eight grade. My village population was only 200, I never new competed the A,B,C,D until class six and I had to walk 4 miles everyday to go to school because I never had a bicycle. In 9th class my school was very far around 11 kilometer’s so my Grandfather bought me a bicycle and at the same time I was learning and understanding planetary movements from him. Until age 17 I was not able to speak English when I came to Mumbai. In 11 grade in first term exam teacher announced the results of math and account paper, he asked us who is role number 20; I raised my hand and he said, ‘are you sure you are the only one who doesn’t know English in class in 11th grade and I got 100% in both subject so teacher was surprised with those results.’
Anyway’s, the reason for telling you this is that I always wanted to learn. When I was studding in a small village under a kerosene lamp’s light, I used to think that soon electricity will come and how the life of the village’s people would change. In 1990 I was talking people around me about computers and telecommunications changing life in the coming era but hardly anyone was buying these predictions. Major planetary positions changed in 1990 and I knew that a new revelations will come in the tech area which will connect the world. Astrology helped me look into the future and I try very hard to see what astrology is indicating and where the masses will be focusing and what the masses demand. It is always important to connect correctly with the worlds social, political and financial cycle.
For example, you give one technical chart to 100 different chartist and everyone will predict differently because they have their own thinking; own personal feeling; the mind will say something and heart will say something else. I think the most important factor is the masses influence and their attitude. In the financial market big money plays a bigger role than masses so the money flow is the most important from big guys. Currently, the astro cycles are showing that money flows will remain intact in tech and biotech and if this week more money inflow in both these markets will put these areas on fire once again. This can force Apple to move towards $1000 to $1500 or REGN toward $1000 in the next two years. Our astro indicators for biotech’s chart looks very positive for medium and longer term so at this stage it looks like that this fall is created by short sellers. Be careful as these stocks can rise so sharply that short squeeze can be bigger than the tech stocks squeeze of 1999.
Currently astro cycles are not disturbed by any new astro combinations because the same combinations are still running so we are not predicting any fall for the markets. Yes, currently all major markets are sitting at or nearer to a historic high and still they can move forward. For the last six months S&P has been trading in the range of 140 points and breaking higher side can take S&P towards 2250 by the year’s end. Down side 1834 is most important level, if this breaks then expect it to go back to 1762 level.
I leave all major trading and investment decisions to you, but surely avoid noise and start selecting great companies in tech and biotech because this growth story is nowhere near to the end. If the markets hold this week and next week nicely than we will see S&P reaching 3200 to 5000. The market’s nature is like water, it always moves, like even if you throw a small stone in a big sea. The human mind can also change the outlook and perception about anything suddenly overnight or with one incident. For example, if we trust someone 100% and a small mistake or incident changes our attitude about him/her completely. It doesn’t matter how much they have done for us. It is long subject, and I can keep talking about it so let me end this here and let’s talk about the markets move during this week.
I will be in India for a week for my yearly spiritual trip. For the last 18 years I have been traveling to India for a week around this time of the year. I will try my best to send the daily flashnews and stocks report but I am not sure about the timing so please cooperate with us.
Before I start this week out for all major markets, I would like to say that:
· Technical indicators have turned negative, huge reversal and step selling on Friday surely brought some concerned, traders started losing money in key momentum stocks when S&P around at all-time high, yes this is concern sign and this may impact psychologically on Investors as we mentioned that human behavior pattern can be changed by small incidence and at this stage all this happening have taken place.
· Just coincidence or I don’t know what but in the last 20 years I have noticed that whenever I went India in April and July, my follower or investors lose money so better not to trade on short term basis while I am in India.
· Our advise to stay away from any aggressive trading, don’t buy Indexes but surely quality stocks can be bought for longer term during this week on any weakness.
· If you have any aggressive positive then you should reduce exposure
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Thanks & God Bless
Mahendra Sharma