By: Stefan Penkov
As I was expecting it last week – the correction was short, very short. Friday showed a renewed buying interest all over the places and there is still room for an additional 8-10% increase before the usual December profit taking. The market indexes held and are staying above their respective 65 day moving averages. NASDAQ did correct the least and most of the investing interest is directed to it. As said in my last week review, this the American index with the best profit potential opportunities over the next 6 months. If we look on a short term bases, for the next month of November there is a potential of an 8% increase for Dow compared to 10% for NASDAQ. In other words, I expect NASDAQ to reach the 3100 mark and Dow to flirt with 15000. My November target for the TSX composite in Canada is 15550. Next week the Fed is going to cut the rates one more time which is going to put an initial pressure on the US$ but the American dollar is settle to correct upward and after the first couple of days of the week it could start going up for the next little while, entering the new year with its US Index over 80. This expected correction is necessary and healthy for the currencies which have already achieved there intermediate respective targets. The leaders remain the Canadian dollar, the Euro and the Australian dollar. I also expect the British Pound to do very well if not to outperform the other currencies until the end of 2007. It was lagging recently and haven’t achieved a new bull market high yet but last week showed an incredible strength which should help in the next couple of months. And here we are: GOLD and Silver crossed major points on Friday and are headed much higher than most of the analysts see them short term. Gold will definitely go to a new all time high by the end of November and I suspect it doing that even in the next 2 weeks. We are going to see. After finally breaking $14, Silver is going to impress even those of you who are its greatest fans. I expect it to even outperform its yellow big brother metal. Oil is firmly directed to $100. It is unnecessary to repeat it one more time that the commodities and resources shares will outperform there peer by far. Take advantage of this short but very impressive November bull and do not forget to lock in some of the profits before the end year profit taking. Good investing and best regards, Stefan Penkov P.S. A month ago, I told you that I was expecting Google to reach $680-700 by mid-November. It s move up was so strong that the share didn’t even had the small pull-back I was expecting but it is already at about $680. Thus, I am revising its mid-November price to $750-775. After that it should correct in December.
