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10th May 2006 |
What does the future hold for the worlds speculative
markets?
Recently a number of investors have queried why we have
not produced a 'Where To From Here' since April of last year. The reason is
that there was really no need for any further general guidance. The guidance in
the report has held good since the early summer of last year. All that was
needed was to follow our daily 'Focus' Service 'Buy & Sell' signals in
order to produce a world beating performance. It should be noted that the best
Hedge Fund performance was just over 20% with the average at a lowly 7%. The
huge discrepancy between our results and the others was achieved by our
techniques ability to anticipate events, isolate tops and bottoms and then
spotlight the precise day and time to act.
Due to the guidance in
spring last year the results have been outstanding. Progress has continued into
the first quarter of 2006.
SO WHAT CAN WE EXPECT FOR THE
REST OF THE YEAR?
As always we will let the markets tell us what
to do. At the moment the markets are in the main undecided.
THE COMMODITY MARKETS
From the beginning of the year we
have directed special attention to the commodity markets which so far have
produced a 10 times geared return of over 200%. All we need in the commodity
field is volatility irrespective whether markets rise or fall. At the moment
there is no evidence to suggest that volatility is on the decrease so our hopes
are high for further substantial profits in this high risk area.
Conclusion - This is the area with the most potential during 2006
but make sure you have a great defense to avert the higher risk factor.
THE STOCK MARKETS
We are one of the
rare organizations who cover every world market which substantially downgrades
risks when compared with restricted coverage from a few leading markets. The
experience of 2004 is a case in point where the UK, Europe and the US markets
meandered in trading ranges throughout the year whilst we uncovered profits of
162% in Brazil among less spectacular profits in 25 other markets during the
period when the majors were marking time. With the advent of IShares, ETR's etc
these markets are now as easily tradable as any share with low exit and entry
costs. The days of expensive unit trusts, mutual funds etc are numbered.
With this in mind it is interesting to note that the major markets,
apart from Japan, are looking toppy. The most interesting markets at the time
of writing are Argentina, Brazil, China, Hong Kong, Japan, Mexico, Switzerland
and South Africa. This is probably where profits will lie in the second quarter
of the year depending upon whether buy signals are triggered.
My 50
years in this business is peppered with periods of time where apathy rules and
investors feel comfortable and do not see the need to be on their guard. They
rarely see the need for help in order to retain profits from a rising market
when advice when to sell is totally absent. It is always a constant surprise to
note the number of 'brilliant' traders and investors in a rising market who
over a short period of time become abject failures. Our frustration grows when
we see investors flooding back into our seminars when all is almost lost.
Markets rise to fall and fall to rise and you had better know when they are due
to fall. It is well worth considering that it takes a long time to build and
only seconds to destroy. With our ability to see tops our subscribers over the
past 30 years have never got caught in a Bear market. Great defense is far more
important than great offence. The conclusion after a number of years of a
rising market is that care is now needed in abundance.
What is a profit and what is not a profit?
All our
profits shown are 'real' profits having been reverted to cash before being
claimed as profits. A share certificate has no value until sold. We therefore
down value profits which are based upon valuations encouraging that four letter
word 'hope' which should never be in the vocabulary of any investor .
Conclusion - Take a wider view of the markets and just because you
feel comfortable with certain markets don't throw away better opportunities
elsewhere.
THE BOND MARKETS
I have my
reservations with the Bond markets as recently support levels have been broken.
It is becoming more and more difficult to come to a definite conclusion in an
area which is normally easy to analyze. The US, UK, Japan & European Bonds
are again near to support but are once again looking as though they might be
breaking down .
Our most productive area over the past decades has been
inflation linked investments which have a little way to fall but could again
prove to be a winner.
Conclusion - The advice for Bonds is be on
your guard an don't rush in without ample evidence of an upward turn against
the main downward trend.
THE GOLD MARKETS
Our recent highly profitable trades in Gold mining stocks reflects the
nature of the market where we have taken profits on some but are still holding
on to others. Our analysis of Gold Bullion shows a breakout. The Gold Mining
shares had already anticipated the event and risen to resistance. Whilst the
long term is obviously bullish the shorter term needs close attention in what
could be a difficult trading period.
Conclusion - Make sure you know
what you are doing in what could be one of the stars for 2006.
THE ENERGY MARKETS
Energy prices in
general have risen to upside resistance where questions will be answered.
Strength above current levels will trigger further profit opportunities but
weakness will demand vigilance. This is an area in balance at the moment where
patience could be necessary.
Conclusion - Wait and see but strength
will be very bullish.
THE CURRENCY MARKETS
The currency markets have been a disappointment both throughout
last year and so far this year. The problem has been lack of volatility. For
instance, the Pound and US dollar chart shows the price today is as it was in
July of last year with little movement either way…result no opportunities.
Most other currencies have mirrored the pound dollar experience.
Conclusion - So far these markets have not moved out of their ranges
except in favor of the pound. Things are not looking too promising but their
could be selected opportunities developing.
AND IN
CONCLUSION
We see the soft commodity markets as the main
attraction for the rest of the year with the metals market not being too far
behind. The energy area could be profitable subject to further strength. We
rather like to look of the South American stock markets especially Brazil and
Argentina. In the Far East, Japan and China look promising. So all in all
plenty of potential for real growth subject the spreading of wings to become an
international investor rather than swimming in calm waters with their tendency
to become stagnant.
Fred Stafford.
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