Dear Members,
Volatility is currently dominant in all markets. A pattern of the last fourteen years reveals that the period towards the end of April through May always puts us onto the wrong path and we therefore struggle with our predictions most times during this period. Last year we struggled with oil; and before that metals traded against our predictions. It seems that it will be prudent to desist from short term predictions next year during the month of May!
Meanwhile, markets have performed quite well. When I predicted that the DOW would reach 32000, a lot of people made fun our prediction. This was not unexpected, as it also happened when we predicted about oil rising to $100 at a time when it was trading at $15.70.
Our long term view about the DOW is 32000 to 38000, with a possibility that it could go as high as 42000. Instead of fretting about how the economy will perform; the housing market or the recession, one should focus on the long term. While selling and booking profit is always good, I however don’t recommend creating a short position in any financial instrument from this point. It will however still be prudent to hedge your position from time to time when we find appropriate levels for exiting or booking profit.
The focus should now be on long term planning as we are very confident about the bull market of stocks and the Dollar prediction in the medium and long terms. One should therefore made proper arrangements around these two areas. In the stock market, one should buy power stocks, alternative energy, uranium and nuclear stocks. Do not put your money in the commodities market at this stage because there is a huge risk factor about a possible fall. Whenever have been uncomfortable in the past, the market has usually reacted badly, please therefore don’t stay in metals, oil, grains and soft commodities after 30th May. One should accumulate stocks during the next three months on weakness.
Without further ado, here is this week’s newsletter for 24th to 28th May 2009
GOLD/SILVER...