Ten Bold Predictions and Big Trades for 2010

Posted by Ron Coby - Minyanville

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Nobody can see the future but I’ll take my best stab at it — here’s hoping I’m not just sticking my foot in my mouth. Well, it wouldn’t be the first time.

The following predictions should hopefully be very controversial — just like many of the predictions in my book Discover the Upside of Down.

All of my contrarian predictions are based on how I see things setting up the weekly charts in stocks, oil, gold, currencies, commodities, foreign markets, and bonds. I’ll also throw in some specific possible catalysts that could ignite theses very powerful setups as they appear now.

Prediction Number One:
The US Dollar won’t crash before it makes a giant double bottom on the weekly charts in 2010.

The weekly chart today look a lot like it did in March of 2008. The dollar hit lows in March 2008 then went sideways until it broke out in August 2008 at 75.60 — when our indicator gave us a buy signal.

The dollar continued to rally all the way up to 91.47 in March 2009 before giving us a sell signal.

It seems the dollar is setting up now for a powerful short-covering rally accelerating into the first quarter of 2010 before it resumes its downtrend once again.

With both individual investors and professional traders raging bears, why wouldn’t the dollar rally?

Everyone and their mother is short the dollar, so we look for the unwinding of this Federal Reserve-created carry trade to take the dollar higher.

Intermediate and long-term, by the way, I’m very bearish on the prospects of the US Dollar. In fact, I can see the dollar getting cut in half after the short covering rally ends.

Prediction Number Two: Gold in 2010 will be looked upon like the 1999-2000 NASDAQ.

When Alan Greenspan flooded the economy with easy money in the late 1990s, the world went into a wild frenzy buying US technology stocks in 1999.

Gold and gold stocks will make a blow off explosive final run in 2010 from “helicopter Bens” flooding the globe with liquidity. The final move up in Gold and Gold stocks will look just like the NASDAQ run from October 1999 until the March 2000 blow off top.

Today’s weekly chart on Gold looks a lot like 1999 NASDAQ. Gold is also set up just like when Gold crossed 1000 in March of 2008, so Gold could have a similar nasty correction before that giant dot-com move up.

By October 2008 Gold got trounced to a low of 692 an ounce. We believe the next big correction in Gold will also prove to be a wonderful buying opportunity.

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