Major trend will develope during next as historic solar eclipse is take place on 22 July 2009.
This week we begin the newsletter with gold. I gave an update in the middle of last week and many members wondered if an error had occurred in my prediction gold falling down to $880 to $450 after eclipse of 22 July. I would like to confirm that it was no mistake and that the figures were correct as presented. Indications at this stage reveal that there is reason for concern regarding the trend of gold and silver, which were once favorites. Whereas a time will come when they shall both top our list once again, they are set to endure a negative trend till the start of the next bull cycle. This negative trend could last for several months or even years.
Huge amounts of money are getting in and out of the market on a daily basis in short term trading practice, forcing gold into wide ranges as well as sharp drops and recoveries. The stock market strongly bounced back in mid March and defied a barrage of negative news and bleak projections. Most investors wanted to stay away and await the return of market confidence, but the big rally from mid March to mid June is testimony that one cannot entirely trust what is happening in the market because external influences are at play. Indeed, some powerful people with lots of money are keen to control the market and make money and they can do anything to achieve their aims, regardless of economic figures and data.
As a result, gold has been gaining so much confidence in the global investment community that nobody is worried anymore about buying and holding it. Indeed, the conviction among the media and people in general is that gold is a key investment instrument that will march forward despite any prevailing crisis. Well, sometimes I become worried when nobody is worried; and this is such a time. As I have said before, nature has a way of spoiling the party for those who get too snug and become smug and forget that in life there are ups and downs. My followers should therefore be warned and take heed that gold and silver could soon be on very rocky ground. I know that gold bugs will dismiss my call of gold dropping to multi year lows as a stupid prediction, but I just predict what I see in my theory. Our theory has always been proven right and we are therefore ready and willing to take any resistance. While others speak about gold moving above $1200 by end of this year, our call is different and declares that gold could easily reach $550. Furthermore, silver will move towards $6.80 if gold reaches $550.
We are openly saying that we won’t be buyers in gold and silver at this stage, but we shall get in to buy gold, silver and metal stocks after metal investors and gold bugs who fail to heed this warning are thrown out of the market. Indeed we are quite sure that gold will hit $2100 and silver $38 to $55 very easily after that, most likely around 2012.
Last week oil traded as per our predictions, and the Dollar remained sideways. The Japanese Yen sprang a surprise as per our call and indeed the stock markets were in an uncertain zone. In actual fact, members were happy with our recommendations, with our call in grains handing a windfall to many of them.
Though it is not realistic to expect to be right every other week, I shall be quite happy to see our predictions continuing to be accurate. I shall therefore strive to guide you onto the right path as I’ve always done for the past twenty years.
Here is this week’s newsletter for 13th to 17th July
Gold and silver traded weakly in the past week as predicted, and this week will be crucial for the future trend of metals. Gold and silver have been unable to impress in the last couple of weeks, and this week presents the final chance for both metals to prove us wrong. If the trend stays weak this Tuesday it will be disastrous for metals. Many of our members are out from metals and other commodities, while others still hold small positions. Those in love with metals are advised to be very alert because the formation of the trading pattern reveals very negative indications. As you know, we value planetary indicators more than anything else.
Gold will rebound late on Monday and remain positive on Tuesday, which is a powerful day for gold/silver…
All base metals have been trading weakly as predicted…
Our call to buy coffee on Thursday paid us some money though prospects are still not very strong. One should therefore book profit if there is a sharp rising…
A sharp fall in sugar and orange juice is on the way from Wednesday; therefore take a short position on Tuesday. Meanwhile, cocoa will remain sideways, and we predict sugar prices to fall around 30% in the next...
Most trades in the market last week paid handsome returns including FAZ, DUG and…
Grains made us good returns during last two weeks, and we are still not positive about the soy bean area; therefore avoid beans, bean oil, and meal because they will fall more than ten percent in coming days. We recommended buying corn late on Wednesday or Thursday and it actually performed well compare to other grains. Buying corn and wheat will be good hedging against selling soy….
Ten days back Goldman Sach analyst and the Saudi oil minister as well as a few other institutions gave a target of oil reaching $85. This has now become very common, where those with an interest to sell oil give higher targets in order to misguide common investors. All I can say about such antics is that they are motivated by greed, which is really shameful and appalling. I always take these people recommendation as a time pass joke because history says that till today all these people never give true picture. They never said that oil reaching $100 when it was $20, then they don’t have any rights to say oil reaching $200 when it was $142, this confirms that these well known people or institutions are only there to misguide so they keep ruling world financial market. We came wrong many times in predicting short term trend but I am very happy that at least I speak truth, I never misguide people or to my followers. Whenever we were wrong most of followers said that Mahendra, no one is 100% accurate and no one can come 100% accurate because nature won’t allow that to happen.
Speaking against such people may not achieve much as they are very powerful. Indeed, they change their mask from one bull to a bear market or from bear to bull while the retail investors always become victims. They want you to suffer by losing money or become tired and get out of market so that you can give rest of money them to manage, and at the end of the year they proudly declare that they achieved 7% returns in best condition. The important thing is to be aware of what is happening in the market and motivations behind it.
Oil will trade weakly this week, and I see it dropping to $56.80. It will trade sideways on Monday and will move up on Tuesday, but there will be a sharp correction from Wednesday onward, therefore place your trades accordingly. Heating oil and RB Gas will remain weak as well, but natural gas will display some positive signs. You can therefore hedge your position by buying natural gas and selling oil. On the higher side oil could reach $61.80 or…
Last week I received many emails regarding our prediction on the Yen, a lot of people saying that they made impressive returns on Yen buying. Keep in mind that the Yen will top out at 1.0910 and start losing value this week against the US Dollar, but it will maintain its position against the Australian Dollar and the Pound. Our calculation this week shows that there will be a sharp correction in the Australian Dollar and British Pound, therefore sell both currencies and hold the position as there is money to be made.
Meanwhile, there has been a contest between the Dollar and Euro, with the Euro going up one day and the Dollar rising the next. The Dollar is playing a game with the Euro like a lion taunting its prey, but we all know that the lion will eventually emerge winner. I have no doubt in my mind about the Dollar’s supremacy, though it is true that all has not been well for some time and it has been far from its territory. As a result of this absence, the Euro and other currencies were able to get a foothold and dominate for a short while, but last year the Dollar returned forcefully. Other currencies were forced to retreat, and in a few months they gave up 60 to 70 percent of gains they had painstakingly made for eight years. Therefore the Dollar is definitely back in the game, though it has been taking a rest for the last few months.
Everyone should be well advised that the next move of the Dollar is set to be very strong. Just as a lion stalks and pounces on its prey, the Dollar will suddenly emerge and give other currencies a run that will leave everyone astounded. We therefore predict that one of the greatest bull markets of the US Dollar. One should accumulate the USD on each fall and keep selling the Australian and Pound. Watch the trend of the Dollar from Wednesday as it should show very strong signs of upward movement.
Flashnews: We shall increase the price of yearly Flash News from $180 to $450 and we shall be increasing newsletter price by 70% by end of next month as we are in process of launching our fund but we will give enough time to extend your services at current price.
IMPORTANT NOTE: We only indicate the weak and positive days through our newsletter, and it is ultimately up to you to make your trades. Deciding on a trading strategy is therefore an individual responsibility, including stop-loss, target of profit percentage, hedging or combination of stocks and futures. There are also those who play with options, but the final decision is yours: we only give a general overall guidance as that is the strongest tool that we have.
The bottom line is that everyone can create their own investment and trading strategy in metals, energy stocks and base metals depending on what one is comfortable with. There is therefore no single best way, as it is all dependent on individual preferences.
Our newsletter is not merely about weekly predictions, but it also talks about investment philosophy, human nature, market behavior, wrong trends and as most importantly, it tries to make you aware about the birth of future trends.
Fundamental outlook and wave of nature theory:
We will be coming out with many new strategy of trading, which can make you more secure and comfortable than ever. New strategy will guide you give you large option to put money in different ways in same market.
Last week was yet another week of extreme uncertainty and volatility (see VIX jump below). The volatility index has penetrated its downward trend line, signaling increasing investor concerns about the market. We believe that this is only a start of a short-to-medium downward trend in the stock markets.
Oil also registered one of the sharpest falls in recent months, down 18% from $73 to $59, even lower than our prediction of $62. The precipitous drop caught lots of commodity investors by surprise as most were still fantasizing on the potential of hyperinflation.
Yet the world economy today is battling with serious deflationary pressure. The unemployment rates are still rising, capacity utilization still very low at 65% (now imagine how low it’d be in China!), savings rates are rising and consumer consumption appetite is declining. Meanwhile, $12 trillion of losses can’t be made up with quantitative easing because banks are still not lending. We believe that the next month or two we will continue to see more downside in markets across the globe.
Then why did commodities rose so fast earlier this year? The simple fact is that we had a strong technical bounce due to inventory build-up, not true economic recovery. Look at the chart below that shows China’s aluminum import surge this year. Does anyone believe that Chinese are suddenly using 5-6 times more aluminum this year as exports fell nearly a third and tens of thousands of factories were shut down? The main commodity consuming countries are simply building up their inventories by taking advantage of the market swoon since 2H’08. In fact, this build-up has likely stalled or completed due to now higher prices.
As for oil specifically, much talks have centered around the seemingly bottoming economy and continuing demand growth from the emerging markets such as China and India. The truth is that oil demand in the OECD is now at its lowest level since 1996 and world demand is still 3 mm barrels lower than last year, yet more new supplies are coming on stream. Saudi Arabia is adding an additional 1.2-million barrels per day in June and will take total capacity to 12.5 million barrels per day by the end of the year. The Saudis are the swing supplier in the market and are currently pumping out only 8 million barrels per day. The rest of the oil capacity sits idle. The bounce in oil price from $33 to $73 was technical and psychological (and astrological), not fundamental, at least not yet.
In the meantime, US dollar, despite only marginally higher than the week before, survived more sharp criticisms and bad news about its world reserve status. In addition to continuing employment and housing market deterioration, during the G8 meeting, China again called for the world to diversify the reserve currency system away from the dollar. And departing Hong Kong central banker hinted that the bank will diversify the Island’s $226 billion reserve out of the dollar in the future. Dollar held firm, despite of volatile trading, and our call for greenback to rise substantially going forward was once again confirmed. Gold, which dropped from $940 to $913 during the week, therefore, will have hard time ahead for a while as dollar rebounds. We will cover the currency issues in more depth in the next week’s issue.
A friend of ours said that we were probably the only newsletter in the market two weeks ago to call for a drop of oil and gold, and a rise in US dollar. Our answer is: that is how we can make money! The natural law of average dictates that following the crowds would produce at best market returns and at worst, which is often the case, losses. Those who constantly, although maybe not always, generate superior returns have to be able to see and act before trends take shape. We were able to catch both the up and down, short and long term trends correctly by analyzing astrological signals confirmed by fundamental research.
An excellent example of conventional Wall Street follies is Goldman Sachs’ constant miserable and almost laughable calls on oil prices in the past year. Below are some quotes from their widely followed commodities team:
1) March 7th, 2008 (oil at $110):
a. Prediction: “Crude oil will surpass $200 in not-too-distant-future”.
b. Result: crude topped at $147 in June and then fell non-stop to $30 in December.
2) Sep 3rd, 2008 (oil at $115):
a. Prediction: “Crude oil will spike up back to $149 by the end of 2008”.
b. Result: see the result above.
3) Dec 13th, 2008 (oil at $35):
a. Prediction: “Due to demand crash, oil price will average $35 in the first half of 2009”.
b. Result: oil bottomed at $30 within a week and then zoomed to over $70, averaging $55 for the first half.
4) June 5th, 2009 (oil at $69):
a. Prediction: “We’re raising our 2009 yearend forecast for oil to $85 from $65”.
b. Result: oil topped at $73 within a month then fell to $59 today.
In other words, Goldman changed its oil price forecast from $200 to $35 within 9 months, then raised it back to $85 within the next 6 months, not mentioning each of the forecasts has been deadly off the mark. Goldman, considered the most powerful investment bank in the world with its alumni executives holding key positions in U.S. government cabinet, was behind every financial bubble in the recent past and survived every time, truly “the Wall Street bubble Mafia” as Rolling Stone called (see the article here: http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine) Yet Goldman has failed again and again in their forecasts. In fact, investors would likely benefit greatly if they invest in the opposite direction of Goldman’s recommendations. If Goldman has absolutely no clue about the markets, why would investors believe any other investment bank, active fund manager or financial advisor in the world that claims to know where markets are going?
This is what our newsletter tries to tell investors: nature is far more powerful than anyone in the markets. The globalized financial markets today are far more complex and dynamic than any economist, analyst or quantitative model can forecast because none of them is looking at the markets holistically. We are able to take advantage of this void by analyzing the markets from social, economic, financial, technical and astrological point of views so that solid, highly accurate signals can be generated and confirmed, not noises and headlines. That’s why our subscribers could make our annual subscription fees back within a week if not a day by following our advices.
Last Week’s Recommendations:
Weekly Recommendations for July 13-17, 2009
Potential stock suggestions: FAZ, DUG, DTO (2+ short oil), UNG (natural gas companies), GLL (2+ short gold shares), ZSL (2+ short silver shares), SMN (2+ short basic material companies), EDZ (3+ short emerging market), DPK (3+ short developed market), EUO (2+ short Euro)
In futures, I also like corn and natural gas on the long side if you see medium term buy signals, and I like copper and sugar on the short side, if you continue to see strong sell signals.
Note: We’re offering 50% off this month for Chinese subscribers. In addition, we plan to raise subscription prices significantly in the next three to six months and therefore we encourage you to renew or subscribe now.
For metals - Wait for most important update on late Tuesday or early Wednesday.
Thanks & God Bless
Mahendra Sharma, 12 July 2009