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Excerpts From
Past Global Pulse Issues
As of December 2008, we have closed out 15 positions with double
digit gains, some plays such as CHK and BHP were closed out for
gains of 98.1% and 127% respectively, far exceeding the projected
goals of this service.
To
make a long story short the future of oil and natural gas looks
extremely bright because not only are we dealing with a demand to
supply problem but also a huge geopolitical time bomb factor that
could come into play on a moments notice. Buy USO in the
42.90-43.80 (You can add up to 50 cents to the price if you do not
have time to monitor this play). Global Pulse Jan 2007
After
putting in the first lower high in the last four years, the housing
market traded all the way down to test its main uptrend line before
recovering a bit. This recent strength is being fuelled by buyers
who felt that they missed the train the first time it left the
station and see the relatively huge dip in prices as a buying
opportunity. Add the fact that the average rate on a 30-year
conventional mortgage has been declining since mid-2006 (see chart
below) and you have sufficient data to fool the masses for awhile
once again.
For
these reasons, the housing market will continue to show signs of
life over the intermediate term (next 6-18 months). However do not
let this fool you into thinking that the worst is over yet. The
average home-owner that doesn�t live in a bubble induced market will
not be severely impacted in terms of quality of life. It is the
real estate speculators that came late to the party and consumers
who have been using their houses as ATM machines over the past 5
years that will be the hardest hit. Jan 2007
More and more bears are coming out of calling for an impending
market crash. Despite the huge negative sentiment ignited by the
400 pt down day back on February 27th the market is
providing evidence that the drop was only a correction and the
markets are not ready to crash just yet. March 2007
After putting in a low on March 14, the Dow proceeded to rally
almost 2000 points in under 3 months before pulling back.
The 50 EMA has crossed over the 200. Crude has spent the last two
months in a channel building up steam for the next move. A break
above 66 on strong volume and the ability to trade above this level
for 9 days in a row should propel oil to test its old all time high.
May 2007 In
roughly 1 year oil put in a series of new 52 week highs and traded
all the way past 140 to put in a new all time high before
correcting.
Gold
broke below its one year uptrend several weeks ago and sine then it
has been essentially trading sideways looking for direction. There
is a chance that it could spike down to the 600-630 ranges one last
time before taking off. However we would not going to put all our
eggs into one basket and are going to issue one Gold play today as
we believe the gold market is now getting ready for its next leg up.
One huge positive is that the Put call ratio on the XAU has spiked
upwards; in fact this took place about 2 weeks ago and since then
the XAU has moved up very nicely. June 2007 After
dropping to 120 in August, the XAU mounted a very strong rally and
traded all the way to 200 by Feb 08 before correcting for a gain of
over 66% from its lows.
The
dollar traded past the 76.50-77.10 ranges for 12 days and as
envisioned it tested and then easily surpassed the 79.20 price point
level before pulling back. The main Zone now is the 81 price point
level and it is going to take several attempts for it to break past
this area; conversely the faster it is able to do this, the more
bullish the intermediate term picture becomes. Normally such huge
bail out package, which congress is planning on issuing would be
disastrous for the dollar, but every nation�s economy is now in
trouble and most nations view this bail out as absolutely necessary
for their survival. Thus the negative fall out should be limited.
The current pull back is going to provide those who did not take
positions in the dollar with a second chance of opening up new
positions. Global Pulse Oct 13, 2008.
Oil has broken down very fast and rapidly; along the
way it has experienced massive one day spikes but has been unable to
hold onto these gains. It dipped below 90 today and if it stays
below this level for more than 9 days in a row, it should at the
very least test the 75 price point level. Given that the markets
have a wide tendency to overshoot these days; there is a chance that
oil could spike down to the 60-63 ranges.
Given
the fear surrounding the entire investing community; we feel that
there is a chance now that oil could drop into the extreme of
extreme points; if this comes to pass, it would equate to a price of
as low as 54 dollars. Global Pulse Oct, 13, 2008.
The
current pattern is still suggesting that Gold will consolidate up
till early 2009. The current rally could take Gold up to the
920-960 ranges. Global Pulse Nov 30, 2008
Our
extreme target of 54 was hit and surpassed and when it dipped below
51 the pattern changed; the new pattern indicates that at the very
least oil could end up testing the 43-45 ranges. There is also now
a chance that oil could dip down to 40.50; a zone that provides
extremely strong support. Global Pulse Nov 30, 2008
Hence
even if by some miracle the US were able to implement some plan in
record time that would cut down the need for new coal plants, it
would in no way affect long term prices because most of the world�s
electricity is still derived from coal.
The
best way to play this sector would be via KOL, ACI, WLB, etc;
currently we have half a position in WLB and are looking for
potential entry points in ACI. Dec 2008
From
a 9 year perspective, oil tested support at 36 and bounced higher,
but from much longer time frames (15,20 and 25 years), oil should
not have dipped below 40.50; breaking below 40.50 has now triggered
the possibility of the 27-28 ranges being tested before a long term
bottom is in. From a long term perspective, oil�s current price is
a steal and a huge bargain; a drop to the 27-28 ranges would move
into the once in a life time buying opportunity range.
Global Pulse Dec, 2008.
Taking a long term perspective copper is certainly closer to a
bottom than a top and given the fact that China and India still
needs to spend billions on developing critical infrastructure,
copper makes for a very good long term investment. FCX and PCU are
probably the best ways to take advantage of this extreme downward
move in copper prices. Dec 2008
The
dollar still has the potential to rally for roughly another 3
months, when both Silver and Gold could put in long term bottom
formations. Thus while the dollar is putting in a top, Silver and
Gold could be putting in long term bottom formations; as we get
closer to these time lines , we will be in a better position to fine
tune our analysis. From a long term perspective, oil�s current
price is a steal and a huge bargain; a drop to the 27-28 ranges
would move into the once in a life time buying opportunity range.
Dec 2008
From
a long term perspective, bonds cannot continue to rise at such a
rapid pace and like all that have experienced such massive runs up,
they will correct (the most recent example is oil). However in the
short to intermediate time frames they could spike a bit higher and
so we are going to divide our money into 3 lots and deploy one lot
at a time. When bonds rise, interest rates fall and when they
correct, interest rates rise, as we expect rates to rise, we are
going to open up positions in TBT.
Dec 2008
Gold
managed to surge past 960 and actually traded all the way to 1004
before rapidly pulling back. Traders were advised to purchase shares
in ### when bullion traded at 960 or better.
Dec 2008
The oil to gold ratio has now reached extreme levels; 1 oz could
purchase between 22-24 barrels just a few weeks ago, now one can
purchase 26 barrels of oil. It appears that some sort of correction
is imminent in the gold markets or the oil markets are going to move
or it could be a combo of the above two.
Feb 2009
If
copper can trade past 150 for 12 days in a row, it will have a very
good chance of testing the 180 ranges before pulling back.
Feb
2009
Older Calls
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.
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
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
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