This week’s predictions for 1st to 5th October:
Short term traders can buy gold on Thursday morning and sell during Friday’s rise. Higher opening on Monday should be taken as a selling opportunity because the trend will remain weak till Wednesday.
This week silver will once again trade more positively than gold. Short term trades can therefore buy silver on Thursday and sell on Friday. On Monday we shall see a positive trend in silver, but the party will be ruined on Tuesday and Wednesday.
PLATINUM & PALLADIUM & COPPER
All these metals are very near to crashing and I shall not be surprised if they move down more than 30% in the next 30 days. One can therefore go short on these metals by Friday because they are entering into a very negative cycle.
COFFEE & COTTON
Though I see a weak trend in all major commodities, the planets that support coffee and cotton are not turning against these commodities. One can therefore hold position. I expect a sudden rise of coffee prices after two weeks therefore hold tight your position as prices may cross $150.
SUGAR & LUMBER & ORANGE JUICE
The three commodities will trade sideways and there is therefore no need to block your money in them, whether in buying or selling position. Just avoid them till the planets give us an indication.
I would like to put it in very simple terms: all major stock markets are ready for a correction, and this should start either from Monday or Wednesday. Liquidate all your position as well as stocks except alternative energy and uranium. One can take a short position in indexes of Hong Kong, Australia, India, China, Korea and Russia as they will badly suffer compared to other markets. One can also sell European markets and keep a buying position in the USA indexes as a hedging. I am therefore recommending selling emerging and international markets and buying the USA market as a hedging. Also in term of dollar you are getting USA stocks very cheap.
Grains have already entered into a bear market (last Thursday) and one shouldn’t be holding even a single contract because they could fall limit down from this stage. We all know that futures markets are very volatile therefore one can buy puts or sell calls in all leading grains.
I see a weak trend controlling oil, RB gas and heating oil from Monday to Wednesday but there will be some short term rising movement on Thursday and Friday, therefore trade accordingly.
I do not want to write more about currencies because in the past you have read enough from me on all currencies. At this stage I just want to see the impact of Venus from Monday. I am holding the dollar and will buy it on each fall. Please check the risk side of the trade as well as leverage. I know that market forces have gone against my views, but October and next year (or even the next 15 years) are still pending and I am sure that they will be with me.
Last week, Uranium stocks made another new high and we shall keep buying these stocks during weakness. The stock list is – RTP, URZ, MAGFF, BHP, CCJ, USEG, SILXY and USU.
In alternative energy, solar, battery and thermal stocks are my favorites. Last week on Thursday I recommended buying my favorite small cap stocks, and EPOI, LTHU, ENEI and GRSR performed very well on Friday. They should continue to do well as these stocks have a unique future ahead. Fuel cell will also perform well. Once again, watch my favorite list; FCEL, CCGY, DESC, MAG, PX, KEM, PLUG, MKTY, HYGS, AVA, FCT and CPST.
Uranium ETF: NLR, watch very closely.
Finally, please don’t forward the newsletter to non-subscribers.
Thanks & God Bless
Sharma Mahendra, 30 September 2007