GML - Where to from Here? - 15th March 2011
During January and February I have spent considerable time and effort in isolating possible set ups for a year which I anticipate will be of some importance. Despite hundreds of possible trades being revealed few trading actions have been signalled which has been frustrating and unwelcome. By following our disciplines we have mainly been in cash so far this year.
Over the decades our Gann analysis has achieved a remarkable record of keeping us out of markets which were about to be ravaged by unforeseen events. This has ensured that our subscribers have never found themselves suffering in any devastating bear market since the 1970’s. The effect of this years destructive event, the Japanese cataclysm, has once again been anticipated with our only trades being a 33.33% holding of Canadian Dollars and 10 % exposure to a S & P ‘short’ position.
When I am confronted with an explanation of this I have to confess I have no explicit explanation to offer apart from referring to the myriad of checks we employ in relation to natural laws as discovered by W.D. Gann.
FTSE LINING UP
(Chart dated 7/1/11 suggested fall to 5800 by March 2011)
It was anticipated that there would be initial FTSE short term weakness down to 5800 to be followed by FTSE strength up to 6900. The FTSE as anticipated corrected down to 5815 in the 5800 area with limited strength following but without angular timing support. As usually happens, but not always, the index gas tracked sideways to the angle.
The two week chart medium term trend is definitely up so the chances of a rise to 6900 is still favourite provided the angle is not broken on the downside A fall under the angle would not turn the trend down but would initially suggest the sideways move will continue until the angle from the 2009 low is reached in early May.
Whilst the UK along with the US remains vaguely bullish the only other markets with bullish indications are Australia, the Netherlands and Sweden which are currently being monitored daily.
GOLD BULLION & GOLD MINING SHARES
My analysis for Gold Bullion in January uncovered decision levels at 1440 and 1260 being 3½ & 4 circles as shown on the chart by the light yellow horizontal lines. Unless you trade short term no opportunities have emerged within this trading range. The trend is decidedly up as confirmed by the two week chart with its rising tops and bottoms. There is now a distinct possibility of a bullish fourth attempt upward break over 1440 with a probability of a break into new high ground which should uncover a number of opportunities. We have no fewer than twenty possible gold mining opportunities lined up.
THE BOND MARKETS
The FTSE UK gilt index after its continuous weakness from the August highs at 163 has recently broken an angle and support at 155 and is still falling. The next support at 148/150 is especially important as this coincides with the highs of 2008 and the lows of 2009 and 2010. If this level breaks the ability of the UK government to attract funds will be seriously compromised by the promise of serious capital depreciation. However, support at 148/150 could provide initially a short term opportunity with a number of individual gilts also near to support but with well established down trends making purchases speculative.
Inflation linked Stocks
The weakness of the UK debt market has not been accompanied by UK inflation linked stocks. The index has been well supported by the angle from the 2008 low but surprisingly has found it difficult to break out of its current trading range. It is essential that the rising angle holds and then the highs at 384 are broken on the upside. We have a number of inflation linked stocks lined up ready to advance into new high ground.
For the future of this sector it essential that the 370 level along with the angle holds. A move under would signal major weakness.
In view of the serious position of inflation worldwide this seems highly unlikely so I place this sector as an important area for the future.
US Treasury Bonds
The US Treasury market after a false dawn looks likely to fall to an extremely important support level at 115. On eight occasions 115 supported falls including the huge fall of 2008/2009. It is therefore of importance that 115 holds. This could induce the crazy US financial authorities to take action once again which may provide a short term buying opportunity but be exceedingly vigilant for this may be the last straw in this astonishing period of financial foolishness.
STERLING BASEED CURRENCIES
Pound strength is within a whisker of topping out against a collection of currencies.
An example being the US Dollars which on strength up to 1.67
around about the middle of March could produce a dollar buy. A number of other currencies are of interest.
Our analysis suggests looking for opportunities in the Gold area, inflation linked stocks, perhaps UK Gilts and US Bonds and currency opportunities on sterling weakness. Naturally we will be keeping an eye on the stock markets but unless strength is seen fairly shortly we are not expecting too much action on offer here.
GANN MANAGEMENT & MY LITTLE MIRACLE!
From my WTFH for January you will no doubt appreciate that I anticipate a year of opportunity.
Since I am well in my advancing years each year I look at Gann’s trading hint where he advises not to trade when ill. In 2004 I overlooked this rule when I had been wrongly diagnosed with cancer and whilst deciding not to trade I continued to offer opinions in WTFH which proved to be somewhat questionable. I vowed there and then to withdraw at least temporarily on any whiff of health trouble in the future.
During 2010 I suffered from a myriad of uncomfortable health problems which could not be diagnosed by my specialist.
I therefore withdrew from management. Matters had worsened considerably by late December. In the week before Christmas week I, along with all the family, contracted the winter virus. Over two days and two nights I was subjected to intense vomiting and sickness
The following day I was a dumbfounded beneficiary from what I can only describe as a minor miracle. My multitude of complaints had disappeared overnight even those that I had suffered from for decades. Most importantly I was then released from my concerns that I would not be at my very best in 2011.
I have therefore decided to return to management and will head the management team along with Gary to take maximum advantage from the opportunities which I anticipate for 2011. Sometime during the year our Grand Strategy could well be initiated. In anticipation I have been preparing to meet the demands of this opportunity over the past two months by generating no less than 209 signals in all covering currencies, commodities, energy, gold, Gilts & bonds, I shares, natural resources, UK & US shares. 153 are possible buying set ups and 37 possible shorting opportunities. We now await the markets to line up to trigger these purchases.
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