Financial predictions from 12 to 16 MAY 2008
Destiny always takes us onto unexpected paths and presents us new beginnings every time that we feel overwhelmed and tempted to think that the world is coming to an end. According to the theory of nature, the world does not end; it only goes through transformation that enables nature to open up new dimensions for us. In the current time, destiny intends to give birth to something new that will provide a better and safer future in energy. I have talked about numerous issues in my new book, but I have tried to put my heart and soul into one area, that is alternative energy. The price of oil is currently moving up freely and it looks as if the daily rise will not stop. However, the current trend of continuous rise will give rise to new babies and that will take shape in bio-fuel, solar, fuel cell, hydrogen, nuclear as well as many new energy sources. Consequently, the unabated rise of oil PRICES has already done much damage to itself by ruining its own future.
It is now too late for oil and it will be difficult to find good reasons why the world should continue consuming it even if prices drop in coming days, months or years. I actually see it certainly moving down towards $70 a barrel in the next few months. Goldman Sach may declare that oil is going to $200, but I would like to differ completely. I met an expert from Goldman Sach in the middle of night in a hotel. Inebriated and voluble, he affirmed that on his fingertip he could easily buy oil contract worth of $5 billion. Major players find it easy to make money in the commodity market, BUT they always forget that there is a bear market after every bull market. Similarly, a bull market always follows a bear market- such is the cycle of nature. Luckily, astrology helps us identify impending bull and bear markets in good time. That is why it is possible to make more money by sticking with the trend and ultimately exiting at the appropriate point. It therefore doesnít matter if one misses the final phase of a bubble, for instance technology in early 2000.
Many experts are talking about the problems of mounting debt, credit crunch, economic downturn and the fed running out of money, but all this is inconsequential. The fact is that nature brings new trends every time and the prevailing troubles are simply part of its expected cycle. Indeed, human beings have a way of adapting to new situations, though there are usually bitter complaints initially. With time, a trend becomes part of life and people move on. For instance, today we are paying high prices to fill our cars with gas, yet there are no meaningful or significant complaints. The truth is that we grudgingly embrace a system despite our futile complaints at the initial stages. If world was really worried about high oil prices, one Saturday or Sunday would be dedicated to a silent protest by refusing to drive, and this would send a clear message to producers and serve as a lesson for speculators in oil. We could say a lot about this, but it is important that we see what planetary positions indicate from here.
Financial Predictions for 13 to 17 MAY 2008
Gold prices will remain in a positive trend on Monday and Tuesday. I strongly recommend getting away from metals and metal stocks as a sharp correction is on the way on Wednesday. Trading range for gold will be from $895 to $868.
There is reason for me to call a short term bear market in gold from current levels $900, as planetary positioning indicates that one should hold his cash money and start buying from August, at whatever price gold will be trading during that time. Indeed, I expect gold to drop up to $700 in the next forty days.
This week silver will remain positive for the first two days but follow the trend of gold during the rest of the week. Silver will bottom out at the same time as gold in July. Trading range for silver will be $17.23 to $16.45
All these side metals will have a sharp down ward trend from here but this week they follow father (gold) and mother (silver). We are in a great week and one may plan some excellent option trades that could bring a windfall in the next 39 days. Copper and platinum will also have sharp down ward trend and I expect copper to reach up to $250 in the same period. Similarly, platinum will be in decline and it will not be surprising if it falls to $1290.
There will be weakness or sideways trend in all major stock markets. One should sell the Indian,
European markets will also trade weakly this week and one therefore needs to avoid taking any buying position. If you are holding any position, start selling now.
At the moment I am only holding one commodity; and that is coffee, which has a very unique trend concealed in it. Cotton will trade sideways or weakly from Tuesday, therefore donít buy cotton. However, keep buying coffee on each successive fall. One could also buy a small option position in it for December 2008 as well as September 2009 since coffee prices could move up to $300.
Coffee will trade weakly this week starting from Wednesday, therefore watch closely and take the opportunity to buy. Those who do not intend to buy during the oncoming weak trend of the commodity cycle should plan to buy at the end of July.
These soft commodities will have a sideways or weak trend from next week; therefore avoid any new position in them except for orange juice.
Early this week, grains will get support from metals and oil, but we are quite near to getting a weak trend that could dominate for the next seven to nine months. It is therefore clear that the bear market in grains will be longer than in metals.
This week I see weakness in grains from Tuesday. One can therefore begin to build a short position on Monday. I see a sharp correction that may result in major speculators and commercial traders holding large positions. They will eventually dump everything at the end of year when prices will be right at the bottom so start selling grains from this week.
Oil has a maximum of four trading days to scare everybody. You should however not cover the short after that till it gets to $80 a barrel. I see oil moving down to that level though it may bounce back to $105 by end of the year. Amazingly, it will then drop like a stone to $45. I know that everyone will ask what will happen to my bill market call on alternative energy, and my answer is that there will be major flow of money into that market. There will be a lot of psychology at work and many short positions will blow out.
Oil could hold steady this week though some naughty traders could attempt to scare short holders since they donít want any one holding a short in this market. They intend to be short sellers from current levels and all the way down. They will keep selling even at $50 and I donít know how one will be able to take advantage of the coming bear market in oil.
Monday I see rising in oil prices and Tuesday/Friday it can remain very volatile after touching new high on Monday. A sharp corrections is due in oil any time on late Tuesday or Thursday.
To be on the safe side, one should build positions of short, buy July puts and target $90 a barrel.
ONCE AGAIN, OIL IS READY TO FALL ANY TIME FROM THE 17th, AND THIS FALL WILL BE THE WORST. NEXT WEEK WE SHALL SEE DOWNWARD MOVEMENTS OF OIL OF AT LEAST $10 A DAY, AND THIS WILL BE FUN TO WATCH. SELL OIL ON FRIDAY DURING RISING TREND.
In worst case scenario like, if there will be bomb blast in Nigeria (normally fund people or buyer they always does through local people), most negative statement from politician, exchange or OPAC try to scare world can maximum push oil prices up to 128.80. Bubble of oil will burst during next week or around $128.80 or any time after 17 MAY 2008.
The US Dollar is holding well but many experts and gold lovers unfortunately donít want the dollar to rise. This is either for reasons to do with ego or personal benefits. The negative talk and proponents of a weak trend in the US Dollar is drawing people away from it. Many investors are therefore likely to miss one of the greatest opportunities by buying the dollar at the current price and selling other currencies.
For my $100 investment, $50 will go to the USD; $30 to alternative energy and the rest to US assets as well. This week the Dollar will remain stable on Monday and Tuesday. A sharp rising trend will begin on Wednesday, propelling the Dollar to a three month high.
I will not be surprised if the Euro breaks $1.50.
One can hedge the position by buying the Yen and Pound. Buying the Pound should however only be for the shorter term.
The Dollar index will go toward $75 and this week trading range $73 to $74.20.
Great trades for this week:
Sell grains on rising as we wonít see these prices again in few years
Buy put call of July 2008 in oil.
Avoid metals and soft commodities during this week
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Many predcitions are coming accurate from my recent 5th book "2008-09 World & Financial Prophecies" In the section of gold on page 25, predictions of April says "Month of April gold will trade weak and trading range will be "$955 to $850" and that proven accurate. To read this month, next month and until 2009 predictions on all major commodities, currencies, stock market, real estate market, alternative energy and 65 countries detail predictions, you can order book: http://www.mahendraprophecy.com/orderform_2008.asp
Thanks & God Bless
Mahendra Sharma, Sunday 11.00 AM 11 MAY