Expect share markets to be well supported next week.

12 March 2016

Dear Fellow Investor,

There has been a multiyear bear market in commodities which includes metals, grains, oil and soft commodities.

Dry bulk shipping rates are at all-time lows. These are rates shippers charge to ship iron ore, grain and other commodities.

BRIC countries are all suffering from the low commodity prices and have had their currencies drop and their economies under pressure including Malaysia Thailand, Indonesia and to a lesser extent Singapore.

Is there light at the end of the tunnel or is there a gorilla? Is the bear cycle beginning to turn?

View the weekly chart of the CRB, an index representing the major world commodities. It has been dropping for over 7 years almost continuously but is now in stage 1 accumulation.

 

Weekly Spot CRB Index

Notice the major stage turn from a markdown stage 4 to an accumulation stage 1. Notice the springs and tests and the lifting of the lows at the right edge of the chart.  This chart looks similar to the crude oil futures chart as oil has recovered over 10 USD a barrel in the last few weeks.

Combine this with QE, negative interest rates and loose monetary policies in Europe/ Japan/ China and the US expect higher stock prices at least in the near term.

Gold knows what other’s done and is like a canary in the coal mine. Gold is one of the best performing assets in 2016 with a massive 18 % return. There are physical delivery delays for those who bought gold futures contracts on the CME in Chicago and are standing for delivery.

Where is all the gold going? Some is going to Central Banks of China and Russia. Some is going to billionaire investors. Some is going to small investors afraid of the money printing and currency debasement

High demand for physical gold reflects ultra-loose central bank policies and increases the demand for physical assets such as gold and commodities.

Expect share markets to be well supported next week.

Invest well and grow your wealth,

Bill

 



This fat cat is a good hunter and has just enjoyed his dinner! A good investor is like a hungry cat that pounces on opportunity.  Cats are survivors.