GML - Where to from Here? - 25th April 2013
Updated 30th April 2013)
CATCH A FALLING STAR
for Golden Returns
AND HEDGE IT WITH OUR SOLID PERFORMER
“May I offer you and your team my hearty congratulations on achieving a 25% return in the past ten months or so”. - Guy Wilson
E-mail received yesterday from a new but experienced trader and investor client.
During my life time analysing the world’s investment opportunities there are times when exciting matters of great importance emerge… now could be such a time.
The first time I experienced a similar opportunity was way back in December 1974 two years after I first encountered the genius of Gann and had learned to believe in the exactitude of natural law on the behaviour of the markets. This enabled me to follow the rules and enter the UK stock market after it had an 85% fall. My clients at the time extracted up to 300% from this opportunity. In order to act, a firm belief is always was vital at that time. My level of belief is now far ahead of what it was in those days and my techniques whilst still solely based on Gann are far more effective. Note the ability to precisely anticipate well in advance future tops and bottoms and the exact timings of trend reversals (http://www.gann.co.uk/signals.htm). This ability resulted in a remarkable 34 consecutive exact timing and price levels being predicted during what was a difficult period for most investors.
If we now go back to the 1970’s making a decision to move from a 100% cash stance to equities was preceded by many temptations to enter the market mainly with the clamour from others that the market was far to low. Gann’s general advice that it is never too high to buy and never too low to sell helped keep me out until there was overwhelming evidence that the market was about to bottom out. Prior to this, in 1973, for 6 months there was a rising expectation that the market was stabilising and many were sucked in (See point A on the chart)…then the devastating crash from 450 to 300 in a few weeks shattered the bulls dreams! From there onwards sharp falls were persistent followed by meaningless rallies.
Then the magic numbers 66.66% & 50% from lows emerged backed by other less important percentages and a vital rising angle. The highly significant natural square number of 144 (12/12) was then hit which precisely heralded the massive rise.
So what’s all the fuss about now?
Well it’s the current fall of the Gold price and more particularly the collapse of gold share prices.
Taking Bullion first the chart for Gold Bullion shows falls of 33.33% & 25% which can be regarded as secondary value but still significant especially as they combine with the 50% retracement and a noteworthy rising angle. The last trading range is also now being ‘squared.’ An interesting Buy is therefore close to being triggered. However, the really exciting bit is that a number of Gold shares appear to be in a similar scenario to the FT 30 in the 1970’s both crashing heavily.
A typical example being Barrick Gold with the chart showing a heavy fall to the 75%; 66.66% % 50% levels coinciding with the lows of 1998 to 2003. Others in similar positions are AngloGold Ashanti; Coeur D’Alene; Gold Fields and Silver Wheaton. I am now waiting for further falls down to their support levels and then action to be triggered using an AIT or TIL signal.
The e-mail above refers to the results of our outstanding commodity trading performance. This being a further 10 months successful trading to add onto our average 16% return since we recommenced our commodity trading in 2005. This has been achieved during an overall stagnant period with the CRB index being approx where it was 10 months ago. You will have to go a long way to find others with such a performance especially when linked with our outstanding ability to reduce risk to minimum levels in an area which is consider by many to be highly risky.
Our results prove beyond any doubt that this need not be the case and is a sound way to hedge against the possibly risky gold positions although regulators in their ignorance probably would not agree. I have to agree that in the hands of incompetents it is indeed highly risky but this can be said of any investment. However our results over the past 8 years are proof enough to confirm that risks can be contained by our iron clad exit points.
The last 12 months has been a difficult period even for me but with a huge amount of concentrated daily attention and impeccable technique we have come out well ahead of most others despite the CRB Index going nowhere.
AND A FINAL WORD
The only world market in which we have had positions this year is Japan. Subscribers holding Japan should note that profits may have to be taken shortly in the 14400 area where huge resistance exists. Think of it as the reverse to the gold markets with rises here and not falls of 100%; 75%; 66.66%; 37.5%; 25% and 16.66%. View weakness from here with great caution.
My long experience in this business has the habit of unearthing similar situations reflected in to the current markets. Gann considered that there was nothing new but there are only repetitions of the past. When I first studied Gann’s techniques one of the most enticing confirmations of his techniques was when I applied them to the daily prices of the ‘Dow’ between 1885 and 1900! I was struck forcibly by moves which exactly reflected the state of the markets in the 1930’s and 1970’s. Gann’s techniques had also worked perfectly in the latter part of the 19th century.
The recent rise in the Nikkei brought back memories of my analysis of Japan at its peak over 39,000 when I had posted an important sell when Japan ruled the business world. This warning was treated with horror from the financial community and ignored followed by much abuse even receiving a death threat for my audacity. It is interesting to note that having received such abuse but subsequently proved right that I had correctly forecast a drop from 39,000 of 75% down to about 10,000. OK I got it wrong it finally dropped to 7000 two decades later. I only received a sole congratulatory response several years later in the Investors chronicle…moral of the story - never be too vociferous when going against the crowd especially when they later associate it with devastating losses. They won’t thank you for it…just kill the messenger! Have I learned my lesson? Good Lord no, I still can’t keep my big mouth shut. In 2000 I forecast that the FTSE would be in for a 40 year bear market. Over the past 13 years the market has gone nowhere despite governments crucifying their currencies in a desperate attempt to hold up the market and to cover up bankers and their own appalling gaffs over so many years. If I have made a gaff over the FTSE I probably won’t be around to suffer criticism but I may be acknowledged as a true disciple of the great W.D. Gann who brought Gann’s genius, by simplification, to the ordinary investor.
So there we are – look to take profits on Japan, clear yourself of doubts of the commodity markets when investing through Gann Management and finally concentrate daily on the gold markets. Then follow what the market is telling you not what the rest of the financial services industry tell you, overall they haven’t a clue.
We are in a period when extraordinary economic difficulties will probably emerge. It will be more than ever prudent to be supported by a company that has vast experience of all the world markets and perceptive enough to deflect investments when necessary for future safety and financial advancement. In our case we have the added advantage having proven to be a guardian against bear market losses since the 1970’s. This report has suggested that the future could be Gold, if and when triggered, together with a concentration on the commodity markets but tomorrow could be a totally different story. However, it is worth bearing in mind that commodities are connected with real things necessary for living and are not pieces of government or corporate share paper which could one day turn out to be totally worthless. You can’t eat paper!
Overall I am enormously optimistic for the future supported by knowledge of how the markets really work but I am sorry to say not for the rest of the hordes in this indebted world.
P/S Just one final thought. Over the years I have received many telephone calls, letters and e-mails from investors who are in the later stages of their life but who had passed our way expressing their regret that they had not listened to our hard to take observations and taken up our services. This has been somewhat exaggerated by the introduction of the Internet. Naïve people now expect expert knowledge, acquired in my case at great expense both in terms of time and millions of pounds, to be freely given away. By any reasoning this is ridiculous especially when considering a major aspect of profitable investment is physiological requiring constant service from an adviser. Surveys in the US exposes those investors who use analysis tools, many being free, resulting in 95% of them loosing. These free or cheap services are far from free. They can prove to be utterly disastrous with investors suffering from lack of essential daily guidance and emotional support at the most vital times as they generate the courage to act. How many times have we heard the unsuccessful say I knew it was the bottom but I didn’t do anything about it? I had a terrible thing happen to me yesterday. Opportunity knocked on my door and by the time I unlocked the chain, pushed back the bolt, turned the two locks, and shut off the burglar alarm – it was gone’ – Robert Orben
Delay taking our service could have an identical result.
There are only three types of people: those who make things happen, those who watch things happen, and those who say, “What happened?” – Ann Landers
Not being fully prepared in these extraordinarily dangerous days could prove to be devastating.
I rest my case.
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