4:47 pm - Market Report by Bill Wermine

Dear Traders,

Geoge Soros was interviewed on CNBC at the Davos event today and asked his view on how to profit in the markets. He said the average citizen will see his wealth destroyed in the months ahead. He said that wealth which is in properties and shares will continue to erode despite the efforts of Obama and the Democrats. Governments around the world will destroy purchasing power by massive money creation. He mentioned gold as a safe haven.

The hightened uncertainty and fear will lead to more fear and more volatility.

Only those who are highly skilled traders will profit from this volatility. He said to profit you must be nimble.

I completely agree with him.

What is more important ? To be cash rich or brain rich. Azizi Ali our graduate and famous property and wealth mentor advised in a recent radio show

to read books on wealth creation, trading, business, self improvement , attend seminars, join networks of like minded wealth creators and this will give us the tools to create wealth and make our brains rich. If an idiot with a poor uneducated brain has cash he will probably lose it, waste it, overspend, make bad investments and wind up broke.


The Dow Jones on Friday tested 8000 support on higher volume than the previous day. This means there is more supply in the market.



Expect more testing of support in the week ahead. Should 8000 break on higher than average volume expect the October low to be tested. If the October low breaks expect a break to 6400 This may precipitate the tragedy of a US depression and a world stock market rout.

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If 8000 holds on support from the US Treasury stabilization fund we might see a recovery to 8600.

In the KLSE maintain high levels of cash and the strongest blue chip shares with low floats and minimal foreign ownership.

There is very low foreign ownership in the KLSE as the funds sold months ago. The hedge funds can not sell what they do not own and short selling is not allowed. The downside in the KLSE is relatively limited at this time but will not escape should the Dow Jones freefall.

Next week we are offering a new AHL capital guaranteed fund . Call me if you want more details.

14 Feb will be our Traders Club meeting to be held at CIMB auditorium. 10 to 12 AM

I have arranged for Nigel, head of research for CIMB to give the market outlook. It will be a scary outlook but we need to know the truth. He was right about the collapse in crude oil/ world stock markets and rise in gold. in last years outlook


MAN AHL for the last week lost 1.78 % but is up 35.1 % in the last 12 months. This is not a fund for the faint of heart

29 Dec 08
$1.3817
5.50%
35.10%

5 Jan 09
$1.3372



12 Jan 09
$1.3597



19 Jan 09
$1.3656



26 Jan 09
$1.3571
-1.78%


Have a good week ahead
Bill