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Ten Bold Predictions and Big Trades for 2010

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There's no time to lose because some of these trends have already begun!

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The likely catalyst for a move down in Gold could be a powerful short-covering rally in the US Dollar as the dollar carry trade unwinds. When there's 99% bears on the dollar there's an inverse correlation with more than 90% bulls on the gold.

I have a whole chapter on gold in my John Wiley & Sons-published book as I'm very bullish on the long-term outlook for Gold.

Prediction Number Three: The Dow Jones Industrial Average (DJIA) will have completed the right shoulder of a giant head-and-shoulders top on the weekly chart and start to head south.

Hopefully the DJIA will stop repeating the 1929-1932 sequence of events where 2008 was 1929 in slow motion and the 2009 rally was similar to the early-1930 rally.

After the 1930 rally, the DJIA collapsed 86% -- which lasted two more years. If history repeats, that puts us at around 5000 in 2010 and 1400 by January 2012, and it will feel like the end of the world-- just like the Mayans predicted. (See also, Finding the Upside of the Approaching Down Markets)

Prediction Number Four: Natural Gas will put in a historic bottom in 2010.

The weekly charts on natural gas looks like they did in December of 2007. Natural Gas made a run from $11.16 to $17.41 in July of 2008. Seasonally Natural Gas is setting up well right now for just such a repeat.

Nobody is bullish on Natural Gas as the fundamentals have never looked worse. Of course, that's how bottoms are made.

Prediction Number Five: Oil will crash to $40 to $50 a barrel and then explode to over $100 in 2010.

As many of you know, oil has been on a sell on the Grail daily charts. (Subscribers to our ETF timing program know this as we put out a timely buy of the anti-oil ETF UltraShort DJ-AIG Crude Oil ProShares (SCO) when oil was around $80.00 a barrel. SCO is +25% since then).

The catalyst for the move up will likely be fears of a coming surprise attack on Iran's nuclear facilities by Israel in late 2010. (See also: ETF Picks: Consider This Diversified Partial Portfolio and Rising Oil Prices May Be the Forerunner to War)

Prediction Number Six: Bonds will become bombs in 2010.

Bonds are now entering a seasonally weak period and the story on bonds is very simple: supply, supply, supply.

The general public is dumping a record amount of money into bond funds in 2009, so from a contrarian's perspective bonds should be bombs away in 2010. (See also, Get Out of Bonds -- Fast!)

Prediction Number Seven: NASDAQ starts the slow-motion process of retesting the March 2009 lows on its way to finishing its long secular bear market that started in 2000.

NASDAQ 2000 to 2009 has been a near-perfect repeat of the 1929-1939 DJIA. 2010 should start down for the final retest of the March 2009 lows before we start a new bull market like the DJIA did in 1942.
Position in SCO
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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