After waiting for a year, finally planets green signaled for mind boggling bull market in metals
HISTORIC MOVEMENT OF NEW LOVE OR AFFAIR – With in few days or weeks GOLD AND DOLLAR will start walking on same path. Why you are scared with US Dollar? Metal investors should also to take part in this historic walk and I am sure you will have great fun.
Dear Members/Friends,
The markets are currently trading with a lot of volatility, especially the stock markets, which is a clear sign that too much money is involved at present. With volatility so high, many rules are consequently not working under present conditions; for instance keeping a strict stop loss or even trading with small leverage. Some people assume that my predictions of weekly trends should be fulfilled 100 percent, but you shouldn’t expect that. In my newsletter, I simply attempt to guide you about the direction to which we are headed, and I do not expect to be utterly correct; and neither should you. I can give many examples but a good example is orange juice: at the end of last year when I predicted the onset of a weak trend, I kept writing that for about two months (Oct to December 2006), during which period orange juice prices remained quite volatile between $192 and $207. I kept recommending selling futures and buying puts or selling calls and very clearly mentioned that prices could fall more than 30 or 40 percent. At the time, it was a difficult trade for short-term traders because volatility was so high. However, those who planned their trades well have earned huge returns as orange juice came down from $207 to $138.
My hope is that one can engage in deep thinking and long-term planning as this could result in great returns as opposed to engaging in too much trading.
Important Note – I have found a way of making my work help you better.
For any new prediction which indicates a substantial downward or upward trend for any market, you should act as follows: During that period, your action should first be to take a very small position or an option with limited risk for the first one to three months. After that, you should aggressively go into that direction once you see if I am in right path.
My work is to always try to point out new trends just developed or likely to be generated, as well as tell whether the trend will be for the short, medium or long-term. If the trend is for long, then I keep writing and reminding you again and again that you should closely watch that area so that you don’t become a victim of ignorance.
At the end of the day, I leave all decisions to you because you must have your own strategy for trading. I hope that this will help you trade on my recommendations.
Coming back to the current market scenario, last week Friday was triple witching day for stock indexes and those who have been trading in the market understand its importance as well as volatility during expiry week or expiry day. Billions of dollars float during this period, especially when markets are on the extreme higher side, in order to keep the market up as well as ensure a smooth roll over. I don’t like to trade in the last week of the expiry period of any important market. In the last ten years I have observed that when a bull market is taking place in any specific area, the area normally remains very strong during the last week of the expiry period. On the other hand if any area trades weakly for weeks or months, it settles into a depressing period because buyers get stuck with their positions while sellers take advantage. However if sellers gets stuck with short positions, then the buyers or bull take advantage and try to push prices hard during the last week or last few days of expiry. This is what happened in the stock market last week.
Let’s see what this week says about the future market:
THIS WEEK’S PREDICTIONS FOR 18 TO 22 JUNE
GOLD
After so much struggle finally gold is entering is powerful bull Astro-cycle but same time many metal experts are skeptic at this stage for short term and medium term outlook. Metal advisors are nervous at this point because of the rising USD and the selling of gold by European banks. As predicted since the last one month, gold has been trading in uncertainty, thereby making metal traders uneasy. However, I am not nervous because the trend of gold will be a very exciting one in the coming days. At the same time, I see huge volatility on both sides.
This week I see gold prices trading positively, and they will try to walk with the US dollar, which will be a very surprising but exciting event for serious traders. A lot of metal investors are more concerned about the dollar’s rise and the current rise in the bond yield which is causing uncertainty in future interest rates, and those who are hedging gold against inflation.
Anyway, I am not giving importance to these micro-economic indicators, but I recommend that you buy gold on Monday as well as on Tuesday during any weakness you should accumulate. This week gold will be trading positively and one should therefore buy gold during weakness. Current planetary movement shows a positive trend in gold and I am thus quite optimistic about it for the short as well as medium term. The trading range for gold will be from $648.80 to $665.80. If it breaks the upper side, then the next target will be $678.80. On the downside, I don’t see gold breaking last week lows, and this week will clearly be positive for gold. If gold remains positive this week agains many negative news, as a forecaster I shall be quite happy as MY PREDICTION OF GOLD TOUCHING $800 WILL SOON BE FULFILLED.
SILVER
I see a sharp rising movement for silver during this week and I recommend partially booking a small profit on Thursday because time has come for gold and silver to hold for the medium term or till gold reaches $800 and silver $18.80. Buy silver on Monday as well as during closing on Tuesday or during weakness on these days and expect around three percent rise in prices.
Once again, this week is very important for gold and silver and they should trade positively. I am confident that they will trade positively because I am suddenly turning positive on metals after a few months: if this period doesn’t help metals, then I don’t think that the coming period (thirty six months) will help them. Indeed, a lot of answers will unfold before Friday of this week and it will also be quite clear whether silver will move to $18 or not- and if gold will move to $800. Nevertheless, I am very hopeful that they will soon do that, probably within four months, though there is a possibility that it could even happen next month.
COPPER / PALLADIUM / PLATINUM
All these metals will trade weakly on Monday and Tuesday. However, there will be a buying opportunity before the close of Tuesday since they should start rising from Wednesday, and I therefore recommend covering all your short position in metals if you have any.
I am not at all positive on these metals for the period after September.
This week copper will trade very actively compared to platinum and palladium.
COFFEE / COTTON
During the last five weeks cotton prices have done wonders for us, and those who bought and held have gained enough to cover the whole year’s expenses. I still see a rise in cotton prices and do not therefore book 100 percent profit in cotton. Wait for prices to reach $55.90, and that will be a good level to partly book profit. In the medium term, I see coffee prices rising ten percent from present levels.
This week coffee will trade sideways and there will be great buying opportunities on Wednesday, therefore don’t forget to put a buying order in coffee. Cotton and coffee are in a bull market and will remain in there for some time.
LUMBER / ORANGE JUICE / SUGAR
Of these three soft commodities, I see a positive outlook for sugar, therefore one can buy sugar from Monday and expect ten percent sudden rises. However, do not forget to book profit around $9.45.
This week orange juice will trade sideways, so no interesting movement is coming in this area. However, lumber’s bull market which has taken place for the last few months will soon end, but before that it will trade with huge volatility; therefore avoid trading in lumber for two weeks, after which one can sell.
Orange Juice remained around $205 for almost two months but than sharp correction started.
Another era started in Era Juice when in 2004 July I recommended buying it around $58 as I saw crop related problem. We all witness of two years bull market in orange Juice.
STOCK MARKET
On Friday last week, some people in my health club were discussing the rise of the stock market, and they believe that the rise will be a very powerful coming time. As I listened to them, I thought about my prediction of a weak trend in the world equity market. Well, I don’t want to say that markets are being manipulated, but as an astrological analyst I clearly see a period of major volatility. A while back the market suddenly went down, but last week it abruptly went up, a sign that people want to get in when they see a buying opportunity. However, once they get stuck during the buying period, then there will be a second era of multiple downfalls like in 2000. Mars has just changed houses and if it cant inject fire to the bull market this week, then a bear market will definitely come.
This week is the most important week for the market trend because if the bull-run continues this week, then it could continue for another five weeks. If a bear trend however comes this week, then the trend will continue for six months. The most important observation you should make during this week is about which region’s markets are going up or coming down. This should guide you quite well and should do wonders trading the market for the next six months. I believe that I have provided you with a master key because I do not want you to make decisions using my weekly trends since I have been off-track on markets. For instance, in the previous week I was very accurate on the market but wrong last week. I therefore want you to make the decision after watching this week’s market.
For the overall trend:
European Markets - I have been predicting a fall in European markets. I have been very confident of a 20 percent fall and though many might not believe it, I am now predicting a fall of more than 35 percent in all major European markets before the end of this year. One should therefore take a risk of just two to five percent of your portfolio to buy puts on the markets or sell the calls of December 2007 and I am sure you will reap what others have gained in orange juice.
Asian Markets –
American Market – I am very optimistic on the
This week is a great opportunity to sell all the markets especially European, though they will be on a roller coaster up and down. However, remain firm and if your trading book figures show a profit, then keep selling the European market. A very strong recommendation is to buy alternative energy (long-term) stocks and metal stocks (short-term).
TREASURY BOND
This week, short-term and long-term bonds will trade sideways. Those who have sold can cover the short position, but do not buy at this stage because the weak trend is not yet over.
GRAINS
Since early this year I recommended buying grains in the month of May, but for the short-term period I don’t see a rise from here. That is why I recommended selling them on Friday. In recent days, grains have been trading very highly but the volume has been quite low. Those that have missed the opportunity to sell on Friday can take a short position on Monday because the astrological trend turned negative from Friday afternoon. If they do not trade weakly for the whole of this week, then my predictions may change because it means that Friday’s Astro negative cycle will not remain negative. I will therefore wait for this week to observe the trend in grains and I shall give my final decision. At this stage however, it looks as though grains will enter into a negative cycle especially wheat and soy oil.
OIL
Last week oil traded sideways and indeed crossed the important level of $67. If it remains above $67 on Monday, then a five percent rise cannot be ruled out as predicted last week. On Monday once you see oil holding above $67, then one can buy and sell around $69.80.
This week heating oil and RB gas may try to trade up with the trend of oil, but they may not be able to sustain the rise, and they may suddenly turn into negativity. Be careful therefore before you buy RB gas and heating oil as I don’t recommend any position in these two energy products after Wednesday. Natural gas will trade sideways.
CURRENCIES
The US Dollar has remained strong, and why not: it has all reasons to remain up since the Astro bull cycle wave has already entered in the dollar. It has been a tough period for me especially the month of March and April when I recommended buying the dollar and it failed to move up. Interestingly, this always happens with me for each commodity and market. I sometimes feel very frustrated and I get depressed since even after repeated study, the planets give me the same answer. In such cases I have no choice but to stick with my predictions.
The bull has been born and it will take the US dollar towards a high, therefore stick with your dollar and keep selling European currencies as well as commodity currencies. An interesting new diversion will take place, therefore don’t buy once you see commodities rising, thinking that commodities currencies will also rise (commodities currencies like the Australian and Canadian dollars).
Last week I was very wrong on the Japanese yen as it never gained against any currency. I will therefore not write anything concerning the yen this week. However, those holding position in the Japanese yen should see better days from Wednesday this week. As for Monday and Tuesday, I am not sure what the yen will do.
This week European currencies should trade weakly especially the British Pound and the Euro which will fall around one percent.
The Australian and Canadian dollars have touched historic highs and from here they will be in a downwards trend. This may take a few days but it is certain that their downwards journey will start from here.
This week the
Important Note!!!
This week will be very interesting to watch the rising of gold with the dollar, and if they both shake hands, then gold will not take much time to reach $800. Indeed, I shall closely watch the situation and update you accordingly.
Trades for this week:
Ø Buy metals as soon we will see new high in gold and silver, gold is toward $800 and silver $18.80 before the end of third quarter 2007. I will announce new price target once these prices get fulfill.
Ø Buy coffee, cotton and sugar
Ø Buy puts in European market and hedge the position by buying
Please don’t forward the newsletter to non-subscribers. Do not reprint in any form.
Thanks & God Bless
Mahendra Sharma,
Sunday, 17 June 2007