GML - Where to from Here? - 20th June 2006
COLLAPSE OR CORRECTION ?
Our last report suggested that lethargy had crept into investors minds as there was an assumption that the markets would rise indefinitely. It was suggested that such a mindset inevitable precedes a fall and so it proved to be. The question remains whether the fall was a correction or the initial stage of a bear market. Markets are at important decision levels with general trends turning down.
This is a time to be prudent and liquidate all holdings where doubt exists especially when caused by falling prices which trigger sell signals. Never ignore stop losses especially when markets are in balance as at present.
To illustrate there are 21 world stock markets with up trends and 24 markets with downtrends. Our always reliable informed buyers index is not providing any sell signal so we are tending to favor that the fall has been nothing more than a correction However this view is up for reassessment daily.
It is our intention to maintain our record of informing subscribers of any pending problem. Thus ensuring that none suffer from the pain of bear markets but benefit handsomely from them.
Will these support levels hold or break down as they did in Japan?
The UK, US & Europe have recently found support at our pre-applied levels. The question is whether they will be a Bear break as in the Japan or whether a rally ensues albeit short term.