Sunday, 16 September 2007
By the time you receive this newsletter we shall be just thirty six hours away from the FED decision. I feel that Tuesday will be an important day that will determine the next move for traders and investors.
Commodity prices have moved up for two key reasons. Viewed from a micro-economistís perspective, the first reason is global growth especially in China and India; while the second one has to do with the fall of the dollar. In my view, the Astro-cycle was in support a commodity bull market as from 2002 to 2007. Major changes occurred in July 2007 that indicated the entrance of new and unseen problems into the market. These problems could either bring down the world economy or result into major imbalances in the financial system, with the potential to burst some countriesí currencies. I am quite serious about this, as it is the nature of Saturn to bring a sudden downfall: When all looks pleasant and partying is at its peak, people are unwilling to heed any warning and are busy enjoying their time while greed and ignorance captures their minds. It is only the morning after their late night party that they find their possessions slipping from their grasp. They frantically try to salvage what they are left with, and some lose everything within a very short time.
No one would like to lose money, and it is therefore imperative that there is awareness and control on greed when the cycle of Saturn is on. This cycle will remain for 25 months, and I would therefore like to warn currency traders lest there are badly hurt. I am extremely negative on a few currencies, and from here they could lose 60 to 70 percent value, meaning that it will be more than they have lost in the past. Whatever analysts or the market feels about the US dollar is their view, but my outlook for the USD in the short term as well as the medium term is a bull market. The euro and the pound could lose more than 80% value against the USD in the next three years. In future I see currencies playing a greater role than the stock market or commodities, and we shall therefore put more focus on the currencies outlook.
Commodity prices are near highs and they could rise in the volatile market for one or two more weeks, but one thing is sure- that they are entering into a very negative bear cycle. Most commodity prices will move down except gold and silver because they will have a bull cycle for the longer term compared to grains and oil. However, I canít promise anything for the short term because Mars is changing houses and Tuesday will confirm the trend of metals and oil. It is just a coincidence that Tuesday is also the day for the FEDís decision.
Once again I request that you to put more focus on currency prices than the stock market and commodities because many hidden answers will be revealed there.
FED ON TUESDAY - Everyone expects a quarter percent cut in interest rates, and many are also expecting a half percent. We are all aware of the quarter percent that they did two weekís back in order to save the stock market. In my view, I donít expect any bigger cut in future, therefore be ready for that.
Once again, I would like to remind you that volatility will dominate all financial sectors including currencies, commodities and stock market, therefore trade carefully. A clear indication is emerging in my studies; that is the topping out of commodities and the bottom out of the US dollar.
Predictions for 17th to 21st September:
GOLD, SILVER, COPPER, OIL, GRAINS, STOCK MARKETS AND CURRENCIES WEEKLY TRENDS ARE ONLY FOR NEWSLETTER SUBSCRIBERS SO SORRY, I CAN'T PUT IT HERE.
Thanks & God Bless