Rainer's Investment Insights

THE USD, GOLD & COMMODITIES 1. USD Perspective  Short to Medium Term  Much of the recent volatility in currencies, commodities and equity markets, is all too often blamed on the statements of a Ms Yellen or Mr Draghi, the JCB, the Chinese economic slowdown and of late, the US election dramas. But how do the fortunes of the US dollar affect the rest of the world? Traditionally, the USD is in a close relationship with precious metals and major commodities, as they are predominantly traded and priced in USD. Will that change? What will happen to commodity prices, global markets, the EUR, and the currencies of Asia-Pacific region?  USD since August 2015 to end of April 2016 (with enlarged cut-out of the orange oval marked period from April 25); SOURCE: Chartnexus My first chart shows the USD from August 24, 2015 to May 4, 2016. This period is full of meaningful Fibonacci aspects, which is why I am quite confident about my near-term prognosis. To p...

US and Europe - SHORT TERM UPDATE Before looking at Asian financial markets, allow me to briefly update you on what has transpired since I wrote part I & II in European an d US indices.  USA indices DJTA, short-term view: March peak, followed by the expected correction, DATA SOURCE: chartnexus The only index in the US, complying with my arrows is the Dow Jones Transport Average (DJTA), and it is taking the less precipitous path. The S&P 500, DJIA and RUSSELL 2000, are in sideways consolidation since the peak on March 22, without a meaningful decline . However, that is only half the story.  USD,October 2015 - today, fitting well into Fibonacci patterns; DATA SOURCE: chartnexus The USD has been losing strength against many world currencies in recent months, - just as I had envisaged  in November 2015 . Back then, everyone expected the USD to grow stronger in anticipation of the four interest rate hikes in 2016. Well, we have learned sin...

In continuing our short-term assessment of financial markets, today's report covers European ind ices.  If you want to check back on US and Canadian indices in Part I, click here . Last Sunday, I concluded that a new leg down in equities has started. It should reach a first significant low point around April 18, +/- 3 days. The sell-off could be strongest in large and mega cap stocks. Can this be confirmed by the cycle research in European indices? Part II - European Equities I indicated earlier that European equities have been correcting since last April.   1. EuroStoxx 50 EUROSTOXX50, a 1-year view: a 1 year correction that has more downside to come. DATA SOURCE: chartnexus In this chart I want show you how the price moves formed, where we are at now, and the outlook for the next few weeks. The peak in April 2015 is very prominent. Visually, it is also the starting point of the downturn. Focussing on the left half of the chart, please observe how this grad...

click here for  Financial Markets Out Of Sync Part II In my last post, I reintroduced my model . How else can I prove that my work carries benefits? Soon, I will elaborate on the model attribution, its strategy, and the reasoning behind the tactical changes over time.   Today, it's all about WHERE WE ARE RIGHT NOW with the markets. Last week, I said, global equities are getting out of sync. Now we can show how disjointed the markets have become. The information may help the experienced investor, though everyone wants direction and targets for future market moves. I will do so in this report, valid for the coming weeks, covering equities, commodities and currencies, each asset class in a separate blog post. It's an extra chance to adjust your positions accordingly, if you think my mumblings make sense.  Part 1 EQUITIES - USA and Canada equities I will show charts of Northern American, European, and Asian indices. You will note the divergence, and the...

"The end is nigh for stocks to rally", or is it?  In the last paragraph of my  post from February 12th , I outlined a four-week window for a last ditch effort by the equity bulls, - very much against the noise and chatter in the media, who preferred to stir up fear that we see a disastrous extension of January's bloody correction in equities and commodities.  Needless to say that my proposed strategy returned a handsome profit, even with as basic an investment tool as mutual funds.Importantly, the choice of funds,  and the tactical adjustments in between,  made all the difference.  Re-Introducing A Model Portfolio Due to change of software and provider, I am restarting the model as of January 1st, 2016. This portfolio is in line with a high risk profile, which means we limit the equity exposure to a maximum quotient of 90%, with the remaining 10% invested in bonds and cash. At no point during this period did we expose the portfolio to more ris...

This morning was the big - highly anticipated - moment for Mr. Draghi's interest rate reduction. And yes, it was reduced to ZERO. But he also announced several more measures in an effort to keep the liquidity healthy and financial markets stable. By right, that should have resulted in European shares rallying, and the EUR weakening against world currencies. But that is NOT what happened! DISASTER STRIKES COMPARING EUR & DAX on 10-3-2016 SOURCE: Yahoo.Finance The EUR rallied by nearly 2% against the SGD (19:00h, German time) The DAX first rallied 2.5% but closed the day down 2.3%. Somehow, I don't believe that this was the desired outcome! Who is fooling who? DAX_EUR Inverse relationship in February and March, SOURCE: Yahoo.Finance. Indeed, against the SGD, the Euro has been falling since February 10, 2016, from a high of 1.578 SGD. At the lowest point on March 7, it bought 1.51 SGD. Did this 5% swing in the currency pair occur in anticipation of Mr Dr...

A Valentine Update A quote from an unknown trader:  "The Stock Market is the only market where people walk out  when the prices have been slashed!" Today, I howl with the wolves: "Surely, at this price level you are not getting out of stocks?!"  Instead of support, my spam box is filled with useless  e-mails, telling me how wrong it is to trust the markets at this stage, conjuring up visions of a repeat of 2008, and worse.  It annoys me no end when the scaremongers manage to undermine many investors' ability to stand their ground.  I go with the saying, - markets aren't always right about where they are or move to, but the explanations for it are wrong most of the time. -  As much as I respect Ellioticians for their wave work (like my Indian friend Ashish), but on this occasion, his counterparts in the US take the biscuit of all the silly comments (but then what do they know about Neo Waves ?)  So that they can say, "I Told You So" late...