Thursday’s Daily-Flashnews - Iran and oil
Dear Members,
Story of day was “fall of oil and Rials”, yes this week we talked in detailed about oil, Iran and middle-east. Since last three weeks we have been constantly mentioning about fall of oil from current level to $88.00, $75.80 and $68.80. We also mentioned that how it is important to watch that oil going down and on other hand stocks going up because always in the past higher oil prices have spoiled bull market rally. This time we are expecting stock markets going higher and weaker oil prices may add value, so avoid investment in energy and energy stocks and keep buying USA stocks. You must be aware that our longer term target for oil is $20 to $30 and on other hand S&P 2500.
Iran currency Rials: In 2011 January, one Dollar to Iran Rials 10000, and on 3 Oct 2012 one dollar to 35000. Currency of Iran is collapsing and may Rials can fall to 50000 to 75000 against one dollar if regime doesn’t change. In one week 40% depreciations in Rials is huge, this can bring social unrest in Iran. Everyone is concern that who will take-over after current regime if people like to through current regime out? but also we all aware that none of regime go away like that in one day and current regime may force to stay in therefore there could be huge volatility in oil prices. North-Node and Mar’s always played most negative role for Iran and oil, we highly recommend watching Iran political situations closely. China, Russia, India and Middle-east must be watching situations closely because “China and India” is importing oil from Iran.
Since end of last year we are focusing and recommending staying with USD and investing in USA stocks and other assets class. We are too much worried about other key middle-east currencies in coming years. Time is coming soon when currency pact will be taken away from Saudi Arabia, UAE and Kuwait etc. We highly recommend reading each weekly newsletter very carefully as next two years are amazing for markets and trading; time has come to take bit risk, buy USA stocks (like in tech Microsoft, Cisco, home builder and food stocks) and other area of our favorite area in precious metals and soft commodities.
Tuesday and Wednesday stock traded positive that gives great hope of market moving ahead so any weakness in stocks should be taken as buying opportunity.
Metals are trading as per daily predicted range but they not moving higher and this give indication that metals will trade mix and they will trade in our daily predicted range.
Soft commodities giving clear indications of rise, grains have bottom out today so buy if they trade on lower side as predicted in daily flashnews.
Currencies trading weaker, trade in and out in currencies. Hold Selling position in Yen and keep adding emerging market currencies.
Mars joining North-Node may bring some negative news for technology base companies (bio-tech and scientific).
METALS
This is what we mentioned yesterday: Gold is holding $1762, it will be interesting to see whether its holds on Wednesday. We will recommend metal investors to reduce the exposure in precious and base metals.
We still believe that gold may hold $1739 and silver $33.18. Wednesday metals will trade weaker so sell at higher levels. If metal remains positive that will change sign from negative to neutral sign.
Yes metals giving neutral sign. We still we recommend to reduce futures position exposure in the metals; but you can add more buying position by adding call options of December 2012 as at this stage as overall medium term is positive. Trade in and out in metals at this stage.
Here is Thursday’s range (All December contract):
GOLD: $1790.90 to $1771
SILVER: $35.03 TO $34.39
COPPER: $380.30 TO $375.10
PALLADIUM: $662.00 TO $648.20
PLATINUM: $1701 TO $1678
SOFT COMMODITIES
Once again we believe that era of soft commodities have started. We highly recommend sifting some position in soft commodities from other frontline commodities like energy and grains. This is what we mentioned on Monday and Tuesday: Time cycle is giving clear indications that soft commodities start giving clear indications that now time for soft commodities to rise have started. We would like to see impacts on soft commodities from the planetary changes of last week. Sugar, cotton and coffee should move up sharply from late Monday.
Keep adding position in sugar, cotton and coffee on any weakness on Thursday.
Thursday trading range (November & December contracts):
COFFEE: $184.80 TO $179.20
COTTON: $72.81 TO $71.61
COCOA: $2450 TO $2380
SUGAR: $21.92 TO $21.30
ORANGE JUICE: $117.50 TO $114.25
INDEXES
This is what we mentioned yesterday: We strongly recommend holding position in emerging markets at these markets outperform other equity market first time in the 2012. Australian, Indian, South African, Brazil and Singapore will move higher on Wednesday. We see USA and Europe markets giving up gains in later so book profit at higher levels. One can hedge trade by buying emerging markets and selling European markets.
Thursday there will be both side swings in markets, we highly recommend to trade in out, medium term cycle is very bullish so any corrections should be taken as buying opportunity. Hold your investment in emerging markets as stock prices in these countries will go rapidly higher.
In our book this year book as well as many times in weekly newsletter we recommended list of few stocks in Indian market like Tata coffee, Tata Global Brew, UB Holding, United Spirits. Jubilant foodworks, VST Ind and Vadilal Ind, all these stocks has done amazingly well (stocks have gained 50 to 100 percent in the year 2012). Only Bharat Immun & Bio (company which take care of Polio vaccine in India and own by Indian Govt.) is struggling but we know it will going perform as well.
Thursday trading range (September 2012 contract):
AUSTRALIAN (Cash) – 4475 to 4447
NIKKEI – 8845 TO 8775
NIFTY S&P (Spot) – 5763 TO 5727
SINGAP0RE (cash) – 3088.00 TO 3073.00
HONG KONG (cash) – 20982 to 19802
CAC – 3444 TO 3391
DAX – 7375 TO 7283
FTSE – 5829 TO 5760
S&P – 1452.25 TO 1441.25
NASDAQ – 2827.5 TO 2798
RUSSELL – 841.75 TO 830.75
DOW – 13511 TO 13391
GRAINS
This is what we mentioned yesterday, and holds same predictions: Grains predictions have done amazingly well in the last one year, selling recommendation of soy, meal and soy oil also have done great in the last three weeks. Trade in and out in grains without taking positioning trading; buy corn, soy meal, soy and soy oil at lower levels but don’t forget to book profit on intraday basis on higher levels as grains trade is we recommending only for the short period of time at this stage.
Thursday’s trading range (December contracts):
CORN: $768.75 TO $751.50
WHEAT: $880.00 TO $865.25
RICE: $15.35 TO $15.12
SOY: $1548 TO $1515.75
SOY MEAL: $471.30 TO $460.30
SOY OIL: 51.50 TO $50.39
ENERGY
Wednesday oil crashed big as predicted; today also you can sell at higher side predicted range as fall of currency value in Rials will bring huge problem for oil, our next target for oil is $83.70, oil will stuggle to cross $91.80 on higher side. This is what we mentioned yesterday; Oil will trade weaker on Wednesday, so sell at higher levels.
Fall of oil was not only due to Iran currency problem but also factors like, oil productions is 15 years high, cars started using less gasoline due to energy efficiency, USA oil import went down 10% and productions is USA is increasing which may help USA to net exporter of oil in coming future time.
Trading and out in natural gas. Treasury bond will trade mix.
Thursday’s trading range:
OIL: $90.05 to 87.11 (Nov)
NATURAL GAS: $3.48 to $3.32 (Nov)
TREASURY BOND – 150-12 TO 149-07 (Dec)
CURRENCIES
All major currencies traded as predicted, we see more weakness in Pound and other currencies. European Central bank will announce rate decision, we are not expecting anything new so, sell euro on any rise. This is what we mentioned yesterday: Tuesday Australian dollar went down sharply on actions of Central bank action. Stay away from Australian dollar, British Pound and Yen will keep fall from here.
Dollar will gain from lower levels, so add some position in dollar at lower level.
We still recommend trade in and out in emerging currencies.
Thursday’s trading range (December Future contract).
DOLLAR INDEX – 80.23 to 79.80
AUSTRALIAN DOLLAR – 1.0195 to 1.0101
CANADIAN DOLLAR – 1.0133 to 1.0082
BRITISH POUND – 1.6128 to 1.6023
EURO – 1.2960 to 1.2877
JAPANESE YEN – 1.2779 to 1.2705
SWISS FRANC – 1.0710 to 1.0638
RUPPEE – 52.38 TO 51.89 (gained almost 10% after our buying recommendations)
RAND – 8.39 to 8.28
Friday Job number and market may get positive number, but book profit on rise.
Thanks & God Bless,
Mahendra Sharma,
Wednesday 04.30 PM, Santa Barbara