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Gann Management Ltd- Celebrating 28 years of
continued success!
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Telephone 0161 285 4488 | Fax 0161 494 6432 | Email
info@gann.co.uk |
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22nd August
2006 |
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.
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All Rights Reserved. Gann Management Limited is authorised and Regulated by the
Financial Services Authority.
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