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Today's Trade & News

This week newsletter, Next week looks very interesting one..

Dear Members,

I am enjoying a spiritual time in Santa Barbara and meditating a lot. Last week metals showed signs that they are now in an indissoluble relationship with the dollar which we haven’t seen since the last sixteen months as gold was walking on its path with its own strength.

 

From this point if the dollar starts moving up, then it will be a short-term disaster for gold and metal stocks.

 

The other point is that while most economists and analysts are predicting inflation as commodities prices have been on the rise, I FEEL THAT IT IS NOT INFLATION, BUT SPECULATION. Many investors and fund managers have recently jumped into commodities trading (which is zero sum) to make money overnight. When there is a large crowd and planetary movements bring negativity, it pushes everyone onto the seller side. This is what happened last week and that was just a small trailer.

 

Last week grains (wheat and corn) acted very well; the dollar tried to rebound; oil moved in confusion without finding a proper path, while the stock market started falling, especially the Indian Market which crashed over 1000 for the first time in history (but this is just a begaining). The European market acted similarly. Sugar, coffee, cotton, lumber and orange juice remained down as predicted.

 

Before I begin this week’s predictions, I would like to share something very important with you:

 

As I watched the metals market in March, the price action showed me that they would go up in the short term. I did not want to be influenced by market trends, but to follow what I have followed since I was 12 years old, that is planetray movement (wave of nature). It was a painful time for me as thousands of investors came into the metals market from 2001 on my recommendation, but went out when it was a hot period due to my short term recommendations in 2006.

 

There was reason as I saw a scary fall in metals and I did not want my members to lose money in the event of such a drastic fall. That is now history and I have learned something out of it.

 

Like analysts, economists, chartists or others, I am an instrument with a theory of the market, and we all try to predict the market in our own way. My main path is planetary movements, including a sixth/psychic sense or intuition which gives the final shape to my prophecies. 

 

It is now time to reveal this week:

 

PREDICTIONS FOR 22 TO 26 MAY

 

GOLD

Last week gold lost over ten percent from high and it looked like metal stocks wanted to flee from the battle. If this trend remains in the metals market, then I don’t know what prices metals will attain. I don’t want to predict a downside price for gold but one thing is sure: for two months, it will not be a great period for gold.

 

This week Monday in weak trend, gold may try to move up but it will fail. Tuesday will have movement on both sides while Thursday/Friday it will rise.

 

Overall, this week will remain on the side and we may also see some buying. However, I don’t recommend holding buying position if you are buying during weakness. Booking profit will be the right advice.

 

SHORT TERM THIS WEEK – SIDE WAY BUT ON THE DOWNSIDE

MEDIUM TERM – WEAK TREND

LONG TERM – UPWARD TREND

 

SILVER/PLATINUM/COPPER/PALLADIUM

This week I see a small percentage rebound in all these metals though planetary movements show that they don’t look health and promising.

 

Medium term - Red metal (copper) has entered into a negative time frame and it could give up entire gains achieved in the last one year. Don’t buy if it falls, thinking that it will rise again. Also don’t start shorting on my recommendation because you all know how risky the commodity market is! Therefore those who believe in me can take a very small sell position or small put option in copper.

 

This week copper may try to gain from Wednesday but it will faill n few days as I see the red metal saying “I am giving up”.

 

Silver prices will try to move up for the first two days but fail. Monday and Tuesday are very volatile and Thursday it may to gain.

 

Platinum is trying to remain up till this month’s option expiry. However, this could be the final week for platinum on the rising side. A FALL IN PLATINUM WILL BE WORSE THAN COPPER/GOLD/SILVER OR PALLADIUM. Once you see a weak sign, start selling it.

 

Last week Palladium came down almost fifteen percent and on the low side it went down nearly twenty percent. History shows that when a weak trend comes in thinly traded commodities, the bull operators go bankrupt. In 1990 a Japanese firm tried to corner copper and initially, prices went up. However, they ended up with legal problems and finally went bankrupt. The same thing happened with Hunt brothers when they cornered silver in 1979/80. They eventually gained nothing even though silver went to $50 from $4.

 

Going up takes months or years while coming down takes just a few weeks to regain former levels: that is why I have been very cautious. Time has come for those who love the metal area to go for holidays for a few months since I know that they may be attracted by prices and be tempted to buy before the bottom out.

 

I will try to guide you once planetary movements give me the buying signal.

 

SHORT TERM TREND – THIS WEEK: SIDEWAY OR VOLATILE

MEDIUM TERM TREND – THREE MONTHS: WEAK

LONG TERM 6 MONTHS TO 2 YEARS: UP

 

STOCK MARKET

Last week finally confirmed that a historic bear market is starting in all stock exchanges in almost all countries. Countries like India and other Asian markets, the European and South American markets will crash. An important point is that they will remain in a bear trap for years. The USA Market will also move down, though not like the other markets.

 

In coming weeks or in the next one month, the Indian and all European markets could crash more than twenty percent.

 

This week markets will gain for two days out of five trading days. They will try to stabilize but fail. Don’t buy a single share in the Indian and European markets. Rising should be taken as a selling opportunity.

 

Look at the Middle East market, as the downward trend is not stopping at any point and Arab investors don’t know what to do. One of the prominent Arab Brokers (Handling a several billion dollar portfolio- only in the local market) stopped talking to me when last year in September I warned him about the risk factor of the rise of the UAE and Gulf or Middle-East market. I told him that a major downward trend could take place in 2006 and now he has disappeared BECAUSE all major Middle-East markets have crashed more than 150 percent.

 

Anyway, watch your stocks if you are trading Indian, Pakistani or other hot rising Asian and European markets.

 

Buy after a few months once metals and Uranium stock bottom out.

 

AS FAR AS I CAN SEE AT THIS STAGE, ALTERNATIVE ENERGY IS THE ONLY AREA WHERE YOU CAN INVEST FOR THE LONG TERM. GO ON HOLIDAY OR RETIRE. THEY ARE THE SAME WORDS THAT I USED FOR TECHNOLOGY IN 1996. IN THE NEXT FIVE YEARS, I SEE ALTERNATIVE ENERGY STOCKS ACHIEVING MANY FOLDS IN RETURNS.

 

SHORT TERM TREND – THIS WEEK: SIDE WAY

MEDIUM TERM TREND – WEAK

LONG TERM- 6 MONTHS TO 2 YEARS: DOWN

 

IT WILL BE VERY INTERESTING TO WATCH THE COMING TIME.

 

OIL

This week oil will trade sideway. On Tuesday and Thursday, crude will rebound but will be time to sell in rising. Friday will be the right day to put money into oil. A three percent rise will bring a selling opportunity while a four percent fall will bring a buying opportunity, so trade accordingly.

 

GRAINS

Last week corn and wheat gained smartly. I see a continuation of the rising trend for grains, but always remember to book profit when you gain. One can book profit on Monday and Tuesday on a rising trend as I see them sharply going up. Friday will be the right day to get in again but this time put your focus on Soybean.

 

Grains are my favourite area of investment for 2006.

 

TREASURY BONDS

Last week bonds gained quite handsomely. I expect the momentum to remain upbeat. When you see a two day downward trend during this week, it should be taken as a buying opportunity (don’t miss it).

 

Important note: Wall Street and investors will experience a new combination – I see interest rates rising but the bond will also rise with the dollar index.

 

CURRENCIES

Last week the dollar index gave a sign which one can take as a sure bet. The dollar index will enter into a medium term bull market and I feel that it is a lifetime opportunity to sell all currencies at this stage. Look at the South African Rand: it went down almost 10 percent in the last two weeks. The same will happen with the Canadian and Australian dollars as well as other currencies.

 

The dollar will rise sharply and surpass its recent fall.

 

This week is still a great opportunity to accumulate the dollar and sell other currencies. Don’t be scared even if US Dollar falls sharply one of the days during this week. It is entering into a historic quick rising in a short period.

 

COFFEE

I still hold my wait and watch policy on coffee by acquiring a small position each week. Make sure you plan to buy for the next three weeks but afterwards, we won’t have time to buy as the rise will be quite sharp.

 

COTTON

Trade in the same way as in coffee as the same prediction applies for cotton. Small quantity buying each week will be the right strategy.

 

SUGAR and Orange juice will also follow a similar path to last week’s predictions.

 

I am attaching last week’s newsletter at the end, so that one can review it.

 

Trade strictly with stop-loss because commodities are entering into a horribly volatile period.  The future short term and medium term trends are weak, therefore trade accordingly.

 

 

I wish to conclude with a parable of ‘The Lion and the Boy’. Last week, the lion came- he is around, therefore watch the trend in metals, stock market/currency:

 

While standing outside his village, a boy visualized a lion. He therefore ran back to the village in panic shouting ‘Lion! Lion! The Lion is coming!’ All the villagers hastily left whatever they were doing and grabbed any weapon within reach and rushed to where the boy was pointing. To the relief of many and anger of some, they found out that it was merely a sheep. A few months later, the boy came running again from the jungle and started shouting that the Lion was coming. This time however, no one heeded him and the villagers ignored him; after all his previous cries had been without cause. Unfortunately, there really was a lion this time round and it attacked the defenceless village, killing many people.

 

I wish you good luck for this week.

 

Thanks & God bless

Sharma Mahendra 21 May 2006

www.mahendraporphecy.com