PART TWO - WORLD MARKETS

In the first section of this report the general indicators are warning of falling markets ahead. It should be understood that these indicators are purely warnings rather than action signals. The signals and therefore actions are generated by Gann analysis which will be used throughout the rest of this WTFH report.

It is from thousands of analysed charts that a view on economies and markets are generated. The analysis is aimed at constructing conclusions without any input from personal opinion and fundamental reasons as is the case in the rest of the financial world. The objective is to be guided purely by Gann analysis and thus avoid the devastating consequences suffered by investors and managers using the misguided consensus approach.

Please note that it should be understood that scenarios are continually changing and are therefore being regularly reassessed on a weekly basis, sometimes with, dramatic shifts as a result. This constant reappraisal is a major reason why, over the decades, we have managed to avoid the dire consequences suffered by others when markets turn nasty.

The first piece of evidence is gathered from the analysis of World Stock Markets which is currently painting the following picture.

THE WORLDS STOCK MARKETS - EARLY FEBRUARY 2009 I SHARES

An analysis is undertaken every week to determine where markets lie in relation to future support and resistance levels as defined by Gann's price and time rules.

By viewing the analysis across the board, a projection of worldwide future market developments is often possible.

Conclusions from the current analysis, as detailed below, reveal few bullish nor bearish dispositions with 78% of the fifty five markets analysed being currently in neutral zones. Only four have bullish tendencies with as few as nine being categorised as bearish.

The main thrust of the analysis is in the direction of markets in trading ranges (20%); markets having risen to resistance (10.9%); and markets falling to support with problems just above (20%).

The conclusion to be drawn from this weeks analysis is that markets are on the edge of cliffs due to a substantial number of charts exposing indices and charts hovering on their G1 levels (Gann's most important level) which is the balancing point of historic highs and zero. The question is which way will the markets move from here? There could be dire consequences should the G1 levels break or alternatively a rally would be possible should strength materialise from the G1.

In view of current market conditions analysis will be spread far and wide to isolate outstanding opportunities presenting with as little risk as possible with potential positive returns. Currently, the Gold Mines, the Dow Jones Industrials, US Treasury Bonds, the Chinese, Chilean & Swedish markets are all under the microscope. As always the markets themselves will dictate interest through Gann's natural law rules accompanied by strict money management disciplines. Even in times such as these, reasonably profitable low risk trades are possible subject to patience, discipline and a great deal of hard work.

Over the past few years the growth of ETF's has assisted investment in the world's stock markets. It is vital that currency factors are taken into account when considering US & Euro ETF's. Our current analysis of world markets is now accompanied by interesting I shares with the interesting markets.

The analysis for the week commencing the 16th February is as follows.

BULLISH POSITION No 1 - Markets having dropped to support (that is a floor)

One market has been found under this heading. (1.8%)

(Note - the markets in this category are the prime candidates for rises and should as a result be watched for trend changes to the upside…at the moment there are none)


















BULLISH POSITION No 2 - Markets having broken above resistance i.e. a ceiling.

One market has been found under this heading (1.8%)

(Note - these are the second most important markets to look for a rising market as they break above resistance)


















BULLISH POSITION No. 3 - Markets which could be breaking above resistance but not yet confirmed by higher trend line.

Two markets have been found under this heading (3.6%)

(Note - these are markets worthy of consideration now, but would not be signalled until the trend is established on or above the resistance level)


















NEUTRAL POSITION No. 1 - Markets having fallen to support but having reservations due to close upside resistance.

11 markets have been found under this heading (20%) (Note - these are markets found to be on support but with limited upside potential owing to near upside resistance and/or falling timing angle close by)


















NEUTRAL POSITION No. 2 - Markets which having risen up to resistance levels, have not yet shown signs of weakening nor of showing a break above.

Six markets have been found under this heading (10.9%)

(Note - these are markets which have shown recent strength taking them to resistance at which point where they would normally reverse the upward trend and fall but to date have not done so. The market could wallow at these upper levels. In bullish form, they could break above for a buy signal, perhaps with an interesting square where a trading range has developed under the resistance level)


















NEUTRAL POSITION No 3 - Markets having already risen with little further to rise up to resistance.

Six markets have been found under this heading (10.9%)

(Note - these markets have shown recent strength and probably still have a little further to go. Only short term traders could have any opportunities here)


















NEUTRAL POSITION 4 - Markets in trading ranges.

Eleven markets have been found under this heading (20%)

(Note - these are markets which have been trading sideways in a definite and identifiable range. We tend to avoid this type of market as the movements within the range are often difficult to manage from a stop loss point of view. However, some experienced short term traders can and do trade the range)


















NEUTRAL POSITION No. 5 - Falling markets but with nearby support.

9 markets have been found under this heading (16.4%) (Note - these are weak markets would not be considered for shorts owing to nearby support which could present speculative buys usually against the main trend)


















BEAR POSITION 1 Markets that have risen to resistance and then fallen without any nearby support.

Four markets have been found under this heading (7.27%)

(Note - these are markets in which to look for 'shorting' opportunities)


















BEAR POSITION No. 2 - Markets that have fallen to support but then broken this support with no nearby support.

Five markets have been found under this heading (9%)

(Note - these are markets in which 'shorting' opportunities are sought with possible squaring guidelines where there is a trading range above the support level)


















Regards,

Fred Stafford