Gary's Comments

Happy New Year!. Here's to a more prosperous year than 2008, the worst calendar year on record for the ALL-ORDS which fell 44% for the year.

The New Year has started relatively positively on the charts with all equity indices' Short Term Trends, in the table below, in the green. However on the economic front, bad news continues to fill the airwaves and print media in the USA, Europe and Australia. I don't expect the economic news to get any better for many months yet, however, this does not mean that equity markets will remain negative.

There is no doubt that markets will start rising again while the economic news is still bad. Markets always catch investors off guard when the major trend changes, either up or down. Not only do investors suffer from "recency bias", where they allow recent market price action to influence their view on what may happen in the intermediate future, but equity markets historically have lead the economy by six to nine months. For these reasons expect markets to start rising amidst all the bad economic news.

The Oil price is in a short term up trend despite a $10 fall in the last week after it reached resistance at $50.

Gold is range-trading and needs a strong rise through $890 to continue the medium term up trend that started on 19th December. A fall below $835 would see the gold price head lower.

Keep an eye on the metals prices. Most of them are down over 60% from their 2008 highs but have risen between 10% (Zinc & Copper) and 30%+ (Platinum) over the last few weeks. Most market commentators cannot see a rise in metals prices in their tea-leaves in the near future however this may be a positive sign in itself! Zinc and Platinum have both built good looking bases which may create a strong support level. Tin, Lead, Copper and Aluminum need to make new higher highs over the next week or so to confirm a trend change. A continued rise in metals prices will see Resource stocks in Australia start rising again. Some have already started moving.

My overall view is that we may see some positive price action in equity markets over the coming weeks and hence suggest that you get your portfolios prepared but wait for the signals.

Overseas Markets Report -

Commodities

The USA indices have all recorded short term break outs and are currently in pullbacks. If they can achieve a modest gain during the coming week we might just see SPA Low Risk signals with this coming Friday's close. The latter part of this week and next week are important trading days to confirm the positive price action that started in late November.

The ascending triangle shown below is 'cornering' the price action as the two trend lines at the pointy end of the chart converge. Ascending triangles are usually found in medium to long term up trends, not down trends. Look for the break out before the end of next week (23 January) - the breakout could occur either way but with the higher lows of recent weeks my view is that the breakout will be on the upside.

The FTSE-100, DAX, CAC-40, Nikkei, Hang-Seng and SSE-ALL (Chinese Index) have all signaled SPA3 medium term Low Risk markets. Whilst there are no certainties in the markets, more positive signs are starting to emerge.

Local Market Report

For SPA buys, a complete list is available to SPA customers by using the 'SPA Scan' under the 'SPA' pull down menu in Market Master X-ec. For IntellEdgence buys, a complete list is available to IntellEdgence customers in the Members Zone by choosing 'IntellEdgence', 'Alerts'.

Share Wealth Systems provides more detail on all of the above items at our eUGMS. The eUGMs are monthly multimedia presentations available to Share Wealth Systems members only.