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Dear Members,

Making money in the markets without a coherent strategy is a difficult undertaking. Engaging in open gambling is quite risky and one stands to lose everything to greedy hyenas that lurk with tones of money waiting to pounce on the smaller players. It is a lot easier to make money in the stock market as opposed to the currency and commodity markets, an experience that I had in 2003 and 2004 when I was holding silver contracts. At the time, I constantly said that silver would hit $15 or even touch $20. As a matter of fact, I predicted that it could touch $50 in the longer run by 2015. Many people started to take position in silver but sharp a correction in 2003 and 2004 saw investors sell their positions due to margin calls.


Currently, people are drawing away from trading in the USD and there is waning confidence with the currency. Those who are buying on my recommendation are getting hurt as well and having to sell if they are in high leverage trading. While I know that holding the USD is extremely difficult since there seems little reason for its rising, on the other hand I don’t see much reason for the rise of other currencies. After comparing the Astro-charts for the Euro and USD as well as other currencies, the answer always remains the same; that a historic bull market of the dollar is on the way. This is the same Astro-chart that helped me make a bold prediction in 2001 about the fall of the USD and rise of the Euro from $0.83 to $1.38. Up to the time, no one else had given such a prediction. Similarly, no one else predicted that oil could reach $100 at a time it was trading at $15. If for no other reason, I trust the Astro-chart 100% on the strength of its veracity in the past. I therefore don’t care much about what the world and everyone else is talking about. In 2001, there were very few analyst that talked about gold and silver, but hundreds of analysts have now come in to be part of hot markets in which crowds are involved. One can be sure that hundreds of analysts will join the bandwagon of recent admirers as soon as the bull market begins in the dollar. Indeed, these new found supporters will be conspicuously vocal and claim to have been advising buying the dollar. Furthermore, they shall most likely come up with numerous convincing reasons explaining why the USD will go further up.


The future will be a most volatile time especially for commodities, which will move on both sides. One must therefore trade intelligently and avoid making emotionally motivated moves and decisions. One should take advantage of positive Astro-cycles and buy after sharp falls. For instance, three weeks back we recommended buying for the short term when gold hit $842 and advised selling around $900. The Astro-cycle has now become quite negative and we shall therefore probably see sharp corrections in metals from this week.


Most economic news will be favorable for other currencies this week and USA data will be weaker than expected. Nevertheless, the dollar will not move down following the negative news. At this stage the most difficult trade is to hold dollar, and as always it is difficult to buy at the bottom when a historic bull market starts. This is principally because everyone sees prices sinking lower and completely ignores the most important behavior of nature; that once a market goes to ones side, then it must also go to the other after a certain level.


Here is this week’s newsletter: Financial predictions for 26 to 30 MAY 2008.



This week gold will have sharp corrections; therefore take the opportunity to sell on any rise. I see gold breaking the $900 mark. It will trade weakly from Monday to Thursday but one can cover short before Thursday’s closing or early Friday.



This week silver will also trade weak but will do better than gold. One should therefore buy little silver and sell gold if reluctant to take risks in trading and the position will make you some money. Silver may move up a little on Thursday during late trading as well as on Friday, but overall the trend in metals will be weak so sell metals and if you want to hedge then touch silver other every thing in downward trend till Thursday.



These side metals will move down sharply this week. One should sell copper, palladium and zinc. All of them will drop more than seven percent during this week and one should not cover any short position in them as they shall remain in a bear market till the end of July.


NOTE: Overall, the trend in metals is weak and the trading strategy should therefore be to sell following any rise.



Both soft commodities will also remain weak during this week. Last week we said that one can sell coffee and cotton because we saw a weaker trend in all major commodities. There will therefore be a decline in coffee and cotton and we shall hold cash and begin aggressive buying.



These commodities are trading weaker as predicted. We have been negative about orange juice for the last one year though it made money for those who were able to take advantage of selling at higher prices. If you remember, we called the top of orange juice at $206; sugar at $20 and lumber at $294 and they have been falling since then.


We shall buy sugar and Orange juice in August.



Major markets have begun trading weakly around the globe, and they shall continue to do so for this weak as well. The only market about which I am optimistic is the USA. The Asian markets of China, India, Russia and Korea shall begin to rise again from the middle of next year as they may benefit for the support of the bull market in the USA. On the other hand, the European market will struggle with a myriad of its own problems.


This week the USA market will trade positively on Tuesday but I don’t expect any excitement till 15 of June. After this date, the USA market is set to be on the move, therefore plan your trades accordingly.


This Asian market including Hong Kong, India, Korea and Singapore will remain weak, but this will be sector specific. At this stage tech, power and alternative energy are the best bets and one should trade in these areas while avoiding the rest.


Australia and New Zealand markets will start moving down for the longer term. However, alternative energy as well as technology stocks will perform extremely well in both of these countries.


The European market will remain weak this week and I highly recommend withdrawing money from the Euro zone and directing it to the USA. Meanwhile, export business companies are crying out at this stage as strong currencies cause a lot of damage whose results shall soon be apparent. Unfortunately, my astrological calculations for the Euro zone indicate that the worst time still lies ahead.


In the USA, tech and alternative energy stocks will be leaders again. Though we were not directly involved in the energy or oil sectors, we invested in alternative energy and this has given us great returns. We are now holding these stocks that will produce numerous new ‘googles’ as the biggest bubble is on the way.


In Indian market one can buy aletrnative energy stocks: Epic energy, NEPC India, Moser bear, Suzlon energy, Bhel, MP Steel and Exide.



On Tuesday or early Wednesday this week, grains will top out and we shall not see these prices again in the coming months during 2008 except in wheat which will move up from July following problems with the Australian crop.


One should get out from grains on Wednesday and start building up an options position as they are entering into a long term bear cycle. We shall be buying grains again in the month of October.



The top in oil has been achieved and as I always say, it is quite difficult to sell at the top and buy at the bottom because in both instances the markets become volatile. Indeed, most times there is panic and many traders are blown away.


There have been calls of oil reaching $200 and a few have even predicted $300, but I am of the view that it will soon break $100 in coming few weeks. One should therefore be ready for an interesting ride. Heating oil will fall sharply with RB gas and current prices will be history.


Indications are that oil will start falling from Wednesday and the decline will be continuous. This week I see oil reaching $127 and heating oil going to $3.680. One should take put options of $100 for July and I am sure that you will make very good money in return. Tradeing range of oil will be $132.98 to 126.80 and if breaks $126.80 then it can move down to $121.80.



This week will be a challenging one for the dollar but it will hold quite strongly even in the face of bad news. My advice is that on should continue to buy the US dollar on every weakness as this is only currency that will provide a safe haven in future.


I like gold and I shall always hold a physical position in gold coins. I am however in the financial market and I give advice through my newsletter. I therefore have to provide avenues for safe trading for investors.


The British pound and the Australian dollar will have sharp corrections while the dollar will make gains and the big carry trade positions will be squared up. Meanwhile, the trading range for the dollar will be $72 to $74.


The Euro will sharply drop again from Thursday.


Two weeks back I recommended buying the DCR and it was a good bet against oil. I have however learnt that oil ETF will be discontinued from the third week of June and one should therefore get out on rising.


Brief: Start dumping commodities on Tuesday as sharp fall is knocking the door.


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I have had put a very important note on 21 May for all traders and I would like you to review once again:



Thanks & God Bless

Mahendra Sharma, 25 May 2008,