ON THE BRINK?

Recent developments on the world’s stock markets beg the question... Is it time to put a lid on your profits? Firstly our weekly report has exposed that as many as 62% of the worlds stock markets are positioned on or just under heavy resistance. Our experience is that when such a high proportion of markets are found to be in similar locations it is a time to take stock and prepare for a move of some significance.

When markets are at upside resistance there are three possibilities the markets will rise, fall or go sideways. As so many markets are at these levels this indicates that whatever move takes place it will be of the utmost importance and should not be ignored. To support a falling market scenario Informed Buyers have been selling into the FTSE 100 rise. Also the Advanced Decline line shows that there are more shares falling than rising as the FTSE 100 rises...not a good sign!

STOCK MARKETS LOOKING ROCKY

GML's Short Term Trading - UP 28%

Jan to July 2006 In our April report the view was expressed that investors were in denial accompanied by a general feeling of apathy. This attitude was swiftly adjusted with the nasty falls in May. With the use of our investment philosophy of Great Defense we escaped unscathed and took advantage of some low priced stocks. We traded through this weakness extracting some attractive short term profits after isolating lows. We then shrunk our portfolios from being 100% invested down to 20% and then moved quickly back to being fully invested. At the time of writing we are back with plenty of cash, Oils stocks such as Kerr McGee, Royal Dutch Shell & Exxon Mobil accompanied by Northern Rock, UK Coal & National Semiconductor.

Overall, good progress is being made but we are ready to pounce to take profits as soon as the market tells us to do so. We take a humble stance by not telling the market what it should do but by following the market not fighting it. If it rises after falling we buy and then sell when our rules tell us to get out and never falter from this procedure just because we feel we know better...we don’t and nobody else does either. They might guess and second guess but those managers who believe in their own fairy tales are the abject failures who took their investors through the trauma of the 2000/2003 collapse and could shortly do the same again. One thing is for sure, they will not sell no matter what. In the last 30 years we have never allowed our clients to indulge in such stupidity...if a share goes down sell the blasted thing and find something better.

COMMODITIES READY FOR BIG MOVES?

GML's Commodity Trading - UP 25.6%

Jan to July 2006 The chart below shows the oscillations of the CRB commodity index; the FTSE 100 & Government securities. Our chosen area for 2006 was commodities. To date they have been disappointing being flat in the first half of the year. However our techniques have produced a more than satisfactory return of 25.6% in what has been a real struggle with 11 trades showing losses and only 10 showing profits. However, the CRB index is now falling to support.

The ‘Softs’ could now be on the march after an analysis 18/8/06 showing that there are potentially 19 out of the 22 ‘Softs’ we follow indicating potential buys. There are also a number of interesting ’shorts’ in the metals arena. There is every possibly that our early year prediction that commodities could be the place in 2006 could still prove correct.



















GOLD OPPORTUNITES HAVE COME AND GONE

Our last report mentioned that Gold had reached support and that we had commenced a buying programme. We have subsequently enjoyed profits from Newmont Mining, Barrick Gold, ASA & Anglo American. These are real profits with the cash now in the bank. Gold could now have problems with opportunities on the upside limited.

Gold over the shorter term should be avoided.