Welcome to a Hot August - Caution ahead

Dear Friends

While most of Europe goes on vacations from this weekend and today, we enter into a really volatile month. Focus has been to study the world events which I hate to publish but I decided to write a quick and dirty analysis on 9th July for the other blog at http://astral-guide.blogspot.com

Unfortunately many of the cities and areas have had expected events specially in Pakistan, China, Congo Zaire, Iraq, Afghanistan and few other areas like Kabul, Islamabad, Baghdad and Los Angeles mostly related to physical disasters and many related to water and fire.
I clearly indicated about North Pakistan and Islamabad. North Pakistan has had sudden and massive flooding and more than a million people have lost homes. Its government is doing nothing nor will do because it worries more about its illicit military activity and plotting terror around the world than managing its own territorry.  This is a type of predictive projection that I hate and do not like to come to reality but when it does I feel pity that we will never advance because of our cynicism we do not believe that future can be read like our palm. Cant help but to lament.
The only benefit really for writing about future is to make use of these projections in a wise way. Unfortunately our media is only interested in publishing about the past but what is the use of writing what happened already. The idea is that we could write about future as close to reality as possible and people who could be affected could benefit and prepare in advance or to mitigate the losses and escape from the big disasters. I can pinpoint more and more if concerned people, cities or geo-economic areas write. I have done that in past a few times but most people and our media is ridiculously interested in sensation only.

The same goes for financial markets. The entire media talks about what happened already. Based on these stories traders and investors take decisions but that does not prepare them for future.

Now coming to the markets please know that it is not that it is a manipulative action but when the market action is diverging from the natural flows of energies, it becomes like a climbing ride to an unknown height which could also turn into a sudden slide. It becomes a bit unreliable. In these unknown unchartered waters either just follow the technicals as best as possible or use stop losses tightly or simply go cash to avoid any potential disasters.

The First ten days of August are one such period. There is an extreme energy not necessarily positive or negative but nervous one.
Like you may have read dozens of analyses from veteran market forecasters, there is indeed very hot or rather overheated time coming in this first fortnight. What could be expected? Anything.
Frankly there could be some natural catastrophe of great proportions, a danger to a key leader and a potential of a major terror attack or a big military action. If nothing happens it would be much better and wonderful but this is what natural energies are indicating for now.

I see some trouble around Persian Gulf/ Afghan hills, South China Seas and then around Koreas. North Korea may enter into a very awkward and unexpected action but if the sanity pervails and its leader is all right we may pass this time peacefully.

 I was writing a brief forecast for August for North Korea to post on other blog. I find it so unusual that I post it here, even though it may not at all become relevant after all but you can never know.
NORTH KOREA Pyongyang :"The period of Aug 1 to 14th specially around 3rd Aug will be very important to watch.
This can bring about changes and impulsive actions.
 Things can start happening suddenly that increase the tensions--possibly seemingly unrelated incidents and even accidents. Relationships with Neighbours can become difficult during this period as the tensions affect behavior. It is important to keep open, honest communication with significant opponents.  Some impulsive action may happen which if not avoided could bring about some painful experience."

We should expect some extra ordinary event between 2nd to 22 August but more specially around 3rd to 9th and later from 15 to 24th Aug. We hope nothing really happens that can alter ways of the world but in this tumultous times any thing is possible.
Frankly during next coming periods I am expecting some economy related news from France and Germany but I have not been able to pin point its timing but whenever that happens it will impact the markets big time.

For now 2nd August could begin with an upbeat mood and could fizzle after 2/3 hours. 3rd August technically should be very negative but since 4th Aug has some extra ordinary hyper active day anything is possible on these days. For now I see 3rd Aug very negative and 4th very positive but on 4th anything is possible [and this same energy could create either  a rally or sell off on 3rd], and so is on 5th and 6th.

Whatever the case overall I see it may not be good to go long from today till 9th August. If you are engaged in day trading short and quick action you could feel safer.
After 10th there is a very interesting period that could be worth working and on this one I will write shortly. So it would be wiser to save energies till 9th.


Specific Commodities : I think there could be some reversal on Soybeans futures shortly.
Will try to post on metals in next few hours additional notes.

Currencies: Despite EUR being very bullish currently I see that there is a potential that EUR and SF should reverse their current course. US Dollar Index may also reverse.

More later. Be safe and try not to risk if possible!



+ Outlook for 3rd August and 4th August Asia/Europe

Whatever the case today Asia and Europe should open negatively. It will weigh on the US markets. For now it is all very uncertain due to great confusion in low volume markets being peak of summer and Europe having very little volume.

+ Just added a comment:

Well after much research I find that there are some factors which show that markets have diverged from fundamentals or any other basis. So this being an unnatural flow nothing can be sure nor reliable. Hereon the best can be rely on some technicals.

If the markets were behaving naturally we would have a slightly difference course but this divergence leaves us in a territory where we can not project on very short term scale.

As I had commented few weeks ago that after the settlement of GS "some big" entities will play some work to recuperate their losses. This is part of that deal.
We can not call it manipulation perhaps but since it is driven by a few key market forces and there is no broad market participation we can not rely on this market. Either stay in cash or go for a few selected stocks or segments that appear to make sense.


AUG 6 2010 Energy of the Trading hours

A fairly interesting day for day traders with clear setups.
Overnight/Overweekend long not a very good idea
Expect a very hyper active day, fast moves, activity of both directions.
Timing here is based on Central Time. For NY EST time add +1 hour.
This timing is about 6 to 12 Minutes -+

Aug  6, 2010     9:05 AM        CST
Aug  6, 2010     9:15 AM        CST
Aug  6, 2010    10:57 AM       CST
Aug  6, 2010    11:31 AM       CST
Aug  6, 2010    11:46 AM       CST
Aug  6, 2010    12:51 PM        CST   important to watch
Aug  6, 2010     2:27 PM         CST

Dear Glen : Thank you for asking.

new WORLD EVENTS PREDICTIONS FOR AUGUST 2010
 A New post on world events with emphasis on
+ Impact of solar flares activity
+ Coming 12/13th meteoric showers impact
+ Prognosis for North Korea and few other areas which could be flash points in next few days and weeks.
+Your questions, views or comments are welcome.
http://astral-guide.blogspot.com



+ Aug 11

Hello guys hope all is ok. Markets moved from 10th as expected after a sluggish past week.

We posted few weeks ago not to go long after 9th Aug. It will still be good to remain short or cash at least till next week.