Final warning on commodities. This will be final newsletter here for free. Please subscribe and support my work. Thanks & God Bless
After a nine months gap, I am back in
Today morning I spent sometime in meditation before writing the weekly newsletter and even though I have been recommending not trading on my recommendations for the last six weeks, I have started feeling that I am slowly getting back on track in a few areas. However, this has not yet happened in regard to currencies. I am hoping that all will fully turn around soon but till then, wait and watch.
My Guru departed when I was eight and since then, I have been walking on the path of purity according to my knowledge of right and wrong. I had not found someone who could help bring light when darkness encroached. There is someone I have known for the last three years and I was lucky to touch his feet on Friday. He is now my spiritual teacher or “Guru” and I will write more details once I get his permission.
Back to the weekly newsletter, I don’t want to write many details till I see myself 100% on track. However, there is something very important that I would like to share with you today.
A new planetary combination will occur in the next ten days, and that is not a good sign, as it could affect each and every area of the financial market.
To my knowledge, it will give indications that the trend will follow the same path without changing:
1. If any commodity or market moves down, the downward trend will remain for some few months.
2. Take an example of metals: if they start moving down, then buy back after the next two months that they bottom out and it will be a good time to buy them. This is the master key for you to make your decision accordingly once you feel and see. This could be a big turn around for your portfolio or money management, return-wise as well as risk protected-wise.
3. There will be negative news for some financial firms and it looks like a few financial scandals will break out.
4. JUNE AND JULY ARE NOT GOOD FOR BUYERS. Till now they have enjoyed whatever they have touched.
THE NEXT TWO MONTHS: In my view, this new planetary combination will affect commodities and the stock market as shown below:
METALS: They should start getting weak and negativity should start with red metals (copper) and then silver, platinum, palladium and gold. My longer term view on metals is very much optimistic from but the short term (two months) is very negative, (I see a major crash). Still those that are not really worried about a short term downward trend can hold on partly to buying position but be careful.
If what I see for metals comes true, then:
Copper should trade 50 percent down from the current price of $390;
Gold should trade twenty percent down from $710 and thirty percent down for platinum, palladium and silver. THERE WILL ALSO BE A GREAT BUYING
This is not my personal feeling and I have no intention to either be against or in favour of metals or any other commodity, currency or stock market.
OIL: During the next two months, oil will be very volatile. ‘Enter and exit’ will be the right trading pattern. Oil should touch a new high in the month of June. In the next two months oil may trade in the range of $63.80 to 81.80.
CURRENCIES: During the next two months all major currencies will fall sharply against the dollar. Trading range of the dollar should be $83 to $91.
STOCK MARKET: There will be a negative trend for all major stock markets. Asian and European markets will be hard-hit. I see a 21 to 30 percent fall in these stock markets.
If any of these markets trades in the opposite direction, then it will hold on that direction, but chances of this happening are quite slim- I shall update you accordingly.
PEOPLE WITH WEAK HEARTS SHOULDN’T BE TRADING COMMODITIES OR OTHER MARKETS FROM 18
PREDICTIONS FOR 15 TO 19 MAY:
This week gold will have mixed trade during the early week but may lose momentum as the week progresses. Though the long term trend is in favour of gold, the short term trend might not be encouraging. I mentioned in last week’s newsletter, that “On Thursday gold will move up though metal investors will experience severe volatility, which will put many buyers and sellers in to a major dilemma whether to hold metals or not.” Yes, both days were like that because sellers got scared on Thursday and the buyers on Friday.
Metal stocks will trade weak so trade accordingly. I don't want to write trading range for this week as free fall can bring any price.
All these metals will trade weaker than gold in coming time except silver, which may move up in early July. Compared to all four metals, strength-wise, gold still looks far better IN LONGER RUN.
FOR ALL METALS:
SHORT TERM TREND - TWO WEEKS: UNCERTAIN/VOLATILE/DOWN
MEDIUM TERM TREND – THREE MONTHS: WEAK/DOWN
LONG TERM 6 MONTHS TO 2 YEARS: UP
No trading range for metals as they can have free fall.
No trading range for metals as they can have free fall.
Last week, major Middle-East markets touched an 18 months low. It is now time for the Asian market and European market to move down. I see a great opportunity to make money selling major stock markets, though the USA market trend looks side way.
Indian stock market, DAX, FTSE, CAC,
This week all major markets will trade in a cautious trend.
In the longer term, only the
FOR THE NEXT TWO MONTHS – The current time is a great opportunity to sell oil, metals, basic material stocks including copper, zinc, aluminium, platinum, palladium and steel.
Longer term - Uranium, gold/silver and alternative energy will out-perform major sectors in the next three years from Sep 2006. If you remember, in 2001/2 I mentioned that gold, silver and metal stocks would out-shine other sectors and indeed we have experienced that.
During this week, oil will be volatile and may see a few days sharp rising and sharp fall. Monday and Tuesday may remain directionless or weak but rise on Thursday and Friday.
Oil will start rising after two weeks so trade accordingly.
During the last week corn and wheat remained in a rising trend and they moved up sharply on Friday. An interesting time is coming for grains so remain in buying for the long term trend.
This week Corn and wheat may trade side way or may move down a bit on Tuesday and Wednesday. This week is time to accumulate soybean. Wheat and corn will hit another new high during this week.
It is a great opportunity to buy thirty year bonds at current prices. I see a sharp rising in bond prices from 24 May but those who will accumulate at current prices will get the best returns in coming days.
Sharp fall in the dollar index is a warning to other currencies. The dollar is getting ready for a big turn around from 18th May.
It is the best time to sell Canadian dollar, Mexican Peso, Brazilian real, South African rand, Australian dollar. All these currencies won’t see these prices in near future.
From next week all currencies will fall sharply against the dollar.
Another one week is pending to buy coffee and those who want to acquire can go ahead and start accumulating small positions each day. Coffee prices are ready to touch $150 in the medium term trend.
Last week cotton remained stable. During this week it should move both sides but more towards the weak side. From the end of May it will start rising.
I see a weak trend starting in sugar from Monday, so trade accordingly. The long term bull market may not be over soon, but a short weak trend is approaching and one should therefore partly get out from holding.
Orange juice will have mixed trade and should move down. However, it may still remain in a rising trend till the end of October 2006 after which it will enter into a long term bear market. The end of May and June will be a weak period for Orange Juice. It will start rising from July.
Grains, coffee, treasury bonds and cotton are in a long term rising trend.
METALS (gold/silver only) are also in a long term rising trend, but for the short term they could encounter a negative trend.
The dollar will enter into a major bull market for the medium term.
DURING THE NEXT TWO MONTHS, STRICTLY TRADE WITH STOP LOSS OTHERWISE THIS VOLATILE TIME COULD BRING DISASTER INTO THE LIVES OF MANY TRADERS.
I wish you good luck for this week.
Thanks & God Bless
Mahendra 13 May 2006 Sunday