WHAT'S IN STORE FOR WORLD STOCK MARKETS?

Our last comments in March concentrated upon the possibility of either a short term correction or a major turn downwards. We said that we would remain positive if support levels were not broken and indeed this was the result for most markets.

With informed buyers still selling into rises our emphasis remains cautious with emphasis on trading rather than investing. A disconcerting factor is that the feel of this market is similar to that of 2000 when world markets first wobbled and then crashed. One of Gann's timing periods for major turning points is 7 years…we're there now.

However for the shorter term our individual analysis of world markets disclose the UK, US, Europe, South Africa, Thailand and South Korea still have a little way to go.

There are a few markets approaching support levels but apart from SRI -Lanka there is still some way to fall. These markets are Venezuela, Malaysia, Russia and Slovakia with New Zealand possibly on a break out.

The most attractive markets after a little patience will be those which are now at their tops. The analysis indicates that they could develop interesting buy opportunities after corrections into July & August. There are no less than 18 world stock markets with I-shares lining up for big buying opportunities ranging from Australia to Taiwan, subject as always to confirmed strength at the decision levels.

We are still waiting for the usual last blast upwards usually seen at important tops of markets.

Perhaps July could be the catalyst up to the bear months of September and October. A major short
term opportunity could be in the offing.

THE DESPERATE BOND & GILT MARKETS

The UK Gilts market is looking set for a large fall from its current level of 146 down to 138. US bonds are now on support but is attacking the support level for the 4th time which usually goes through. This would mean a fall to 102 from 109. Bunds have got further to fall and Japanese bonds are no where near a buy signal.

INTEREST RATES READY TO SURGE?

If we are to see Bond markets fall then this would normally be associated with rising interest rates. Looking at interest rates in the UK the minimum level anticipated at this time would be 6.6%. This would obviously be a blow to the indebted house owners of Britain and could be another catalyst for a stock market fall. It will be essential to keep a close check on your bank. The more they are into mortgage lending the more vulnerable they will be.

TODAYS SPECIAL SECTORS

Whilst our analysis is suggesting caution for many world markets there are certain sectors that have the potential to outperform despite the possible general demise of the markets.

We already have a heavy weighting in energy with recent buys and a large number of shares lining up in the Gold & Natural resource areas.

There could be some exceptional profits here.

STERLING DEPOSIT ACCOUNTS

A number of currencies are now lining up possibly presenting opportunities against the pound. The US dollar is not such a currency where current action has just triggered a short of US dollars against sterling.

COMMODITIES

We continue to concentrate on Soft commodities with little result to date whilst a few metals have presented limited opportunities. The CRB index has gone nowhere since the commencement of our Hedge fund management in February but still remains an area upon which we are hopeful of substantial future profits.