Excerpts From Past Global Pulse Issues

As of Dec 2007 out of a total of 23 positions 17 are profitable, and 6 are in the red. One of our positions is already up a whopping 100% in less than one year and most of the other positions are showing double digit gains.

 Global Pulse Investment Criteria

When Natural gas start to trade in the 9 dollar plus range and oil is eventually trading past 90 dollars coal will start to look extremely attractive.  Since the markets are forward looking, the stocks in the coal sector will start to move before oil and natural gas start to trade in these ranges.  Global Pulse Oct, 2006.

USO is basically a great way to play the oil sector as it mimics the price of oil but it’s a safer way to bet on higher oil then buying the larger cap oil stocks. Deploy half your funds now and buy in the 50.60-51.00 ranges.  A break past 56 on strong volume will improve the intermediate picture dramatically (the long term picture already looks great).  The ability to break past and trade above 56 for at least 9 days should take USO all the way to 65 before it pulls back.  Global Pulse Dec 2006

 As long-term investors, the goal is to find sectors that show great potential for gains combined with solid fundamental factors in favour of our position.  Once this is discovered, short-term fluctuations against the trend should not override this objective.  The fact of the matter is this correction has put us in a great situation to build a buy and hold position in energy via USO and other energy related plays in the portfolio. 

Above is a 10-year chart of crude oil and the picture is still bullish.  Technically oil can trade all the way down to the main trend line (42-43 range, prices that will have market analysts predicting $10 oil again) and still be in a strong position to mount a nice long term rally.  Global Pulse Jan 2007

 When the oil to Gold ratio drops below 9 it’s usually a good time to jump out of oil and go long gold and when the ratio trades above 11 it’s a good time to start favouring oil over Gold. Towards the end of Dec 05 the ratio hit 11 and then oil took off while gold pulled back. In Oct 06 the ratio fell below 7 and Gold took off while oil pulled back. We now have an extreme type situation; the oil to Gold ratio has put in a new 3 year high. It now stands at 12.5 and this is taking place when the world’s geopolitical situation is to put it mildly extremely unstable.  Hence we think the risk to reward ratio is such that it pays to favour oil over Gold in the short term.   As a result of this we are going to take an additional position in USO. Global Pulse Jan 2007

 Sometime this year over 1 trillion dollars worth of mortgages are going to re set and when they do expect the number of foreclosures to increase significantly.  Things have gotten so bad that many banks are actually allowing home owners to get out of their mortgages by finding buyers for their property and taking as much as a 20-25% loss. Others are refinancing with no closing costs to help them lock in lower rates and thus lower their monthly payments. These efforts are akin to putting a band aid on a gaping wound; it might temporarily stem the infection but its not going to heal the patient, without proper treatment the beast will eventually die.   Expect even more carnage in this sector in the months and years to come.  Global Pulse Jan 2007

If you look at the chart of the Dow and NASDAQ it’s quite obvious that they moved up too fast in too little a time; almost a V shaped rally and such rallies usually lead to equally hard pull backs.  In the market update we warned subscribers that the move up in the last two weeks has been taking place on increasingly low volume and that all pull backs were occurring on higher volume. This is a sign that the smart money is locking profits but as of yet they have not started to increase their short position; thus this means that they are most likely locking in profits now with the expectation of buying back at lower prices. The interesting part is that the smart money has now adjusted to deal with the markets volatility; in the years gone by they would hardly jump in and out so often but with so much money chasing stocks these days they now move almost as fast a regular investors. We personally do not blame them as there is so much money at stake; plus equipped with the inside knowledge they have it would hardly make sense not to act and thus we now have what we would call a very active and mobile smart money sector.   

We suspect that this correction could end up being a lot more serious then it should have been and we could at the worst end up testing the lows we put in this year. For the Dow that would correspond to a test of the 12500 mark and for the NASDAQ we could dip as low as 2400.  Global Pulse Oct 21, 2007 Update 

For those who have no position In Palladium bullion use any and all pull backs to the 360 ranges to open up new positions.  In addition ### still remains a good long term buy.  Global Pulse Oct, 2007 issue.                                                       

Global Pulse Investment Criteria

Standard deviation analysis has also flashed some rather strong bullish signals. The SD bands in the Dow and Nasdaq have snapped open wide to their highest levels ever. In fact in one month alone the Nasdaq bands gained over 100% in value. Both the Dow and the NASDAQ’s SD bands have put in a series of back to back new all time highs. When SD bands suddenly expand and especially when they violently explode upwards this usually leads to a rather powerful rally; this rally can take anywhere from 3-9 weeks to materialise and 8 out of 10 times  when the bands have surged into record territory the markets experienced a rather powerful rally.  Global Pulse  Nov 26, 2007

 It can clearly be seen that copper is trading in a somewhat wide channel formation that ranges from 3.18 to 3.80 and each time it has tested 3.80 it has broken down.  Copper has also put in what amounts to a triple top formation and if the lower part of the channel does not hold it could correct all the way down to the 2.90 ranges.  Now if this were to happen we would view it as a lovely buying opportunity. So if copper corrects hard do not view it as a bad situation but act as though you have been given a wonderful opportunity to buy additional shares in copper producing companies. 

Now if Copper can trade past 3.80 for 21 days then its virtually a given that it will go on put in a several new highs and should then challenge the 4.20 price point level before pulling back.  Nov 26, 2007  

 Those who have no positions in the natural gas sector the best way to play this would be via the Natural gas ####. As stated before out of all the components in the energy sector natural gas is the clear underdog and sooner or later it’s going to play catch up. Its getting harder and harder to locate massive new gas fields and thus from a long term perspective this sector is wonderful play. Make sure you have some exposure to this sector. This reminds us of the position we were in when we first bought USO and instead of taking off it pulled back significantly but we persisted as we knew that the demand for oil would continue to soar.  Today we are holding onto 50% plus gains from our entry price. Global Pulse Dec 2007

 The price differential between Platinum and Palladium is simply stupendous to put it mildly; the difference right now is roughly 1200 dollars and we feel palladium is going to play catch up really fast when it starts to move.  Hence make sure you have some exposure to this metal.   Global Pulse Dec 2007