Thursday, January 29, 2009
3:45 pm - Market Outlook by Bill Wermine
Dear Traders,
Continued fear, instability, loss of trust in banks and financial institutions combined with debasement of currencies is the spark that is igniting the gold markets and the liquidation of most stocks and property in world markets.
As investors our main focus must be capital preservation. Focus only on the highest grade equities with long term proven management, earnings, dividends and growth.
Companies such as Public Bank, BAT, Guiness, F & N, Dutch Lady and Nestle, PPB Group are some that come to mind. Buy these on panic selloffs, massive Dow Jones Drops and sell into optimism.
Here is some analysis from The Elliot Wave Theorist- Jan 22
The stock market is a thing of terrible beauty. Watching it work is like glimpsing an owl swoop down and grasp a mouse in its claws or watching a shark hone in on its prey. Its motions are efficient and its dead eyes convey no emotion. For 12 years from 1995 to 2007 a vicious bear, disguised as a siren, whistled and sang to its future victims, drawing them into its den. It is still whistling and singing, but only when it has time to breath between bites of feasting.
Physical gold is a good investment but beware of con men and fraudsters. Bank Negara/ Maybank sells gold bullion/ Kejang coins and there is no worry about being cheated. Public Bank offers gold passbook accounts in which they promise to redeem based on spot gold price.
Below is some interesting analysis about gold from Sir Charts
The bottom line is that the demand for gold is highly elastic and can increase dramatically, even from today's record levels. At the same time, however, the supply of new gold is highly inelastic. It is heavily constrained, and even with an all-out effort can only be increased very slowly - if at all.The fundamentals for gold have never been stronger. Countries around the world are debasing their currencies at a rate that is historically unprecedented. Demand for gold should only continue to increase as more and more people shift from paper currencies and financial assets to hard assets and tangible forms of wealth.
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The funny money gang would have you believe it is gold that is the anachronism. History speaks against this shortsighted claim. Lack of discipline in the global monetary system has sponsored the likes of Bear Sterns, Fannie and Freddie, Lehman Brothers, AIG, the year of the bailout, Madoff, all of the other recent officially sponsored atrocities, and those yet to come. This infestation has just begun. The US is now an economic wasteland and you can clearly see why a system with no discipline (gold) always leads to fraud and excess. Human nature doesn’t change.Roosevelt illegally confiscated gold from the American people in 1933. Nixon reneged on the international agreement to exchange foreign currencies for gold 38 years later. We can thank this dynamic duo and most of the administrations ever since for our present predicament. The world has been on a fiat standard (no standard) since Nixon’s default. Gold has been targeted for at least the last 76 years in one form or another. The Fort Knox gold vaults are likely barren.
Obama may confiscate gold held by Americans citing an economic emergency just as Roosevelt did.
I also like commodities such as Palm Oil. Crude Oil is bottoming as well as base metals such as copper, lead, nickle which dropped over 72 % from its highs.
Palm oil on Friday had a successsful test of support on low volume right at weekly support in the face of bad news and negative analyst reports.
I am buying some 3rd month CPO on Wednesday open and risk 90 points RM 2250 per contract. with an open target. Should the trade move in my favor will lock in profit using an ATR stop.
This trade is not for the faint hearted. Expect extreme volatility.
If you like to sleep at night with less volatility than outright palm oil futures, the Man AHL hedge fund continues to motor ahead. They have been able to tame volatility in 2008 and are one of the few investments that made money in 2008. In 2 weeks they are launching an AHL capital guaranteed fund and will have a presentation at the Hilton PJ. Will inform you when the date gets closer. Sam Gibson will be there and you may ask any questions you like.
CPO 3rd Month
Continued fear, instability, loss of trust in banks and financial institutions combined with debasement of currencies is the spark that is igniting the gold markets and the liquidation of most stocks and property in world markets.
As investors our main focus must be capital preservation. Focus only on the highest grade equities with long term proven management, earnings, dividends and growth.
Companies such as Public Bank, BAT, Guiness, F & N, Dutch Lady and Nestle, PPB Group are some that come to mind. Buy these on panic selloffs, massive Dow Jones Drops and sell into optimism.
Here is some analysis from The Elliot Wave Theorist- Jan 22
The stock market is a thing of terrible beauty. Watching it work is like glimpsing an owl swoop down and grasp a mouse in its claws or watching a shark hone in on its prey. Its motions are efficient and its dead eyes convey no emotion. For 12 years from 1995 to 2007 a vicious bear, disguised as a siren, whistled and sang to its future victims, drawing them into its den. It is still whistling and singing, but only when it has time to breath between bites of feasting.
Physical gold is a good investment but beware of con men and fraudsters. Bank Negara/ Maybank sells gold bullion/ Kejang coins and there is no worry about being cheated. Public Bank offers gold passbook accounts in which they promise to redeem based on spot gold price.
Below is some interesting analysis about gold from Sir Charts
The bottom line is that the demand for gold is highly elastic and can increase dramatically, even from today's record levels. At the same time, however, the supply of new gold is highly inelastic. It is heavily constrained, and even with an all-out effort can only be increased very slowly - if at all.The fundamentals for gold have never been stronger. Countries around the world are debasing their currencies at a rate that is historically unprecedented. Demand for gold should only continue to increase as more and more people shift from paper currencies and financial assets to hard assets and tangible forms of wealth.
---------------------------------------------------------------------------------------------------------------------------------
The funny money gang would have you believe it is gold that is the anachronism. History speaks against this shortsighted claim. Lack of discipline in the global monetary system has sponsored the likes of Bear Sterns, Fannie and Freddie, Lehman Brothers, AIG, the year of the bailout, Madoff, all of the other recent officially sponsored atrocities, and those yet to come. This infestation has just begun. The US is now an economic wasteland and you can clearly see why a system with no discipline (gold) always leads to fraud and excess. Human nature doesn’t change.Roosevelt illegally confiscated gold from the American people in 1933. Nixon reneged on the international agreement to exchange foreign currencies for gold 38 years later. We can thank this dynamic duo and most of the administrations ever since for our present predicament. The world has been on a fiat standard (no standard) since Nixon’s default. Gold has been targeted for at least the last 76 years in one form or another. The Fort Knox gold vaults are likely barren.
Obama may confiscate gold held by Americans citing an economic emergency just as Roosevelt did.
I also like commodities such as Palm Oil. Crude Oil is bottoming as well as base metals such as copper, lead, nickle which dropped over 72 % from its highs.
Palm oil on Friday had a successsful test of support on low volume right at weekly support in the face of bad news and negative analyst reports.
I am buying some 3rd month CPO on Wednesday open and risk 90 points RM 2250 per contract. with an open target. Should the trade move in my favor will lock in profit using an ATR stop.
This trade is not for the faint hearted. Expect extreme volatility.
If you like to sleep at night with less volatility than outright palm oil futures, the Man AHL hedge fund continues to motor ahead. They have been able to tame volatility in 2008 and are one of the few investments that made money in 2008. In 2 weeks they are launching an AHL capital guaranteed fund and will have a presentation at the Hilton PJ. Will inform you when the date gets closer. Sam Gibson will be there and you may ask any questions you like.
CPO 3rd Month
3:39 pm - KLCI is staying above 880 support level
The selling down has stopped and it is ready to test 890 resistance level - remember the gap .
9:51 am - Chart of the Week - Pos Holdings
Buy if it take out high @ Rm1.92 and put your stop at rm1.80.
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