Dear Friends,
Here is this week newsletter for free to review. Our concern or correction in stocks, oil, base metals and currencies has proven very right. Yes, on gold we are missing as gold is playing on Greece uncertainity but surely that prediction will also come true.
Thanks & God Bless
Mahendra Sharma
Here is this week newsletter:
Week newsletter from 3-7 May - Great Crash
Dear Members,
I am traveling, sitting at Los Angeles Airport and due to missing flight as well as bad connection of flight. I decided to write newsletter which will be not in details as well as non-edited because it will be too late to send newsletter after I reach designated place from here. This will be a brief letter and I will write update on Monday night or Tuesday morning.
Except USA market all other markets are trading in very uncertain zone, gold had a good week because of Euro zone concern and this is helping gold but I am sure you are aware that from this week we are expecting huge correction in precious and base metals. Base metals came down sharply during last week, and oil remained in volatile zone with Natural gas. Grains were trying to prove that they are in longer term bull market and surely they are getting lot of attentions at this stage and they will be investors favorite.
It will be testing time for investors and for all major markets because we see from here till end of May huge volatility with big fall in metals, stocks and oil. During this week stock markets, oil and currencies and metals will have nightmare. Commodity stocks will have free fall, Canadian and Australian stocks will tumble with South Africa and India currencies. Yes, we are entering into worst cycle which will create a horror in Wall Street and smart investors will take full advantage of this volatile time to make money.
This week newsletter from 3-7 MAY 2010:
GOLD/SILVER
Finally worst cycle for metals have arrived, Monday gold and silver will try to stabilize but Monday and early Tuesday will be great time take sell position in metals. Get out from all kind of metals investment area because astrology is indicating clear warning sing. Jupiter is transiting on 2 May, Mars is in final phase and this both combinations have always proven very negative for gold and silver.
Bring down your investment to in metals to zero level. From Tuesday gold will fall with silver.
Metal stock will have nightmare, Canadian and Australian mining stock will fall like there is no tomorrow. HUI and XAU will also move down sharply. We expect gold to come back to $1123 and silver $17.11 within this week and higher side $1188.80 and silver $18.80. Cover lowerside nce target is achieved. At this stage Greece situation is helping gold but for how many days?
COPPER/PLATINUM/PALLADIUM/ZINK/NICKLE
During last week all these base metals performed horribly, especially copper prices crashed, we expect more fall in all these base metals but compare to base metals, base metal stocks will have terrible time. Rio, BHP and base metal index will crash big way. Steel prices will also move down with aluminum.
Copper, Platinum and Palladium will move down sharply during this week so great time to make money, those who are holding sell position should wait for some more time before they cover because weakness have just started. This week copper, platinum and palladium can fall up to five percent.
NOTE: I have always seen that three to five times in a year some great opportunity comes to make money because market make huge move in one direction. We have seen one huge move earlier this year and this is second cycle of weak trend in metals and this can provide good profit.
COFFEE/COTTON
Since last three months we have been waiting for mid May to buy coffee and yes time is very close so one can start accumulating coffee from this week Thursday. Coffee won’t disappoint us as Mercury is ready to bring some news related to coffee. Start accumulating calls as by end of this year and by mid next year coffee prices can move above $200 magic figure.
Cotton prices will remain weak so avoid cotton and those who are holding shelling position can hold it tight as big corrections is on the card.
SUGAR/COCO/ORANGE JUICE
Sugar and orange juice will trade sideways so no need to acquire position at this stage but Cocoa will move up from Thursday so wait for new trend before you enter in any trade. Avoid all these soft commodities at this stage.
STOCK MARKET
Last few weeks we have been mentioning that USA stocks would perform far better than all other markets, and we saw that USA performed far better than all other markets. Goldman story is big and we are hopeful that it won’t damage much but still time is not good until 27 May for Greece, Google, Goldman and gold, (all starts with “g”). Any negative news from USA will make forces all markets to collapse big.
This week is negative for any buyers in base metals, precocious metal and energy stocks as they will come down sharply, all major indexes of world will fall sharply. Buy “shorts ETF’s” of these areas, like EDZ, DTO, SMN, ZSL, FAZ. Big money to be made so take full advantage to Astro cycle and ignore all other indicators because indicators can turn positive or negative as per market condition but Astro cycle gives you trade well in advance.
From Monday Fall will start from Australia and then it will continue to Europe and USA may try to stabilize on Monday but then no power will able stop fall from late Tuesday. Wednesday to Friday world markets will fall terribly so no short covering is recommended, (hold all the way until markets doesn’t fall up to 20%),
GRAINS
This week grains will remain stable. Corn and soy will perform better against all major commodities (except coffee). Keep accumulating grains from here. Buy calls of December, I won’t surprise if corn goes back to $800 by mid next year.
This week build 25% percent position in grains, and next week another 25%.
No short, those who are holding shorts can cover position. Money and Tuesday grains will trade bit weak or sideways but from Thursday positive trend will develop in grains when all other commodities continue bleeding.
ENERGY
Last week volatility dominated energy markets, natural gas prices target fulfilled, this week we see sideway trend in RB Gas and heating oil but surely oil will start moving down from late Tuesday. Natural gas will remain weak so avoid any new buying position in gas during this week.
There is no doubt that soon oil reaching to $55, and then it may break down below that level as well but Monday and Tuesday oil prices can push up bit higher side before they start moving down big from Tuesday and fall will continue for whole week. I am not putting any weekly trading range in oil because oil has enter in worst Astro cycle so sell on Monday’s opening around $86.50 (which was Fridays close)
CURRENCIES
Last week dollar remained in sideways trend, and that is what we expected. This week US Dollar start gaining very strong ground, current prices of dollar index will become a history so without any fear accumulate Dollar. We see dollar index touching 83.80 during this week s once it close above this then next target is $87.50, it means that Astro cycle will push huge up move in dollar index.
British pound will have nightmare as Venus is not supporting at all, so sell pound against USD and Yen. Britain election time has come and no need to get optimism.
Commodity currencies like Canadian and Australian will move down big, last few weeks we have been recommending building short position in these both currencies and we still recommend as huge downward move is coming from this week. Australian and Canadian will fall more than five percent in very short period of time (in the next ten days).
Euro is struggling and will struggle continuously. Time has come for Euro to break 1.30 levels and this will happen during this week. Greece is old story, other European countries are in queue but even those names are old news. We are waiting to see break up in Euro zone with is round at corner, many says it will be good for Euro but time will tell that Euro survive as a currency or not. Germany won’t mind if other EU countries get out from EURO ZONE but outcome won’t come as expectations.
Swiss Franc will also remain weak but avoid Franc, surely this week is negative for commodities, Euro, stocks and very positive for USD. Commodity currencies will have nightmare, Australian, Canadian dollar will try to save face but will fail.
Best trades for this week:
Sell Commodity currencies and Euro or buy dollar index without fear
Sell base metals, metals, and buy shorts ETF’s of metals and base metals.
Sharp fall in all major stock markets
I will come-out with update on Tuesday.
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Thanks & God Bless
Mahendra Sharma, 2 May 2010