Financial Market Forecasts

Predicting Market Moves Before They Happen

I have known David since 1988 when I headed Sterling Eurobond trading at JPMorgan in London. David was then and remains a polymath whose fascination and study of behavioural patterns is prescient. His track record, available on his website Quarterly performance appraisals, reveals his accuracy in pinpointing entry and exit points for his lateral views of markets, geopolitical events and human behaviour. Following his initial success as one of the first proprietary traders at JPM, David was asked to set up and run a price-based market analysis group. This was an innovative and bold move for a traditional and highly conservative operation. What impressed me most about David was his independent and lateral analysis. Never one to be carried along by the crowd David saw patterns that others did not which were portents of market moves. My interactions with David at JPM led to a long and enduring relationship with him that continues nearly 35 years later. During that time I have watched him develop and improve his market behavioural models to their current form. Whilst no market predictor will ever be right one hundred per cent of the time David's consistency and his risk-reward approach as revealed in his audited results, are compelling. The precision of his entry points for trades which provide low-risk trading opportunities are reflected in his quarterly published trading results. His insights are extremely valuable and alpha generative, across not only the main market sectors but individual shares. Whether your interest is in predicting market movements, geopolitical events or behavioural modelling David’s book Breaking the Code of History was and continues to be groundbreaking and has inspired many coming after him to explore David’s compelling analysis.

Dominic Price is a veteran banker who worked for JPMorgan for over 25 years including in several senior roles in Asia and was a subsequently a Senior Advisor to JPMorgan. (January 2023.)

David, your fully integrated work combining global geopolitical historical perspective, overlaid with a keen understanding of the inner working of financial markets, provides a level of wisdom that is rare. The quality and depth of research is invaluable to leaders across the political, corporate and investment disciplines.

Satish Rai - Chief Investment Officer OMERS Pension Fund Canada

David Murrin is an amazing geopolitical and macro thinker. He was my consultant while I was at Exoduspoint and one of the few non-linear thinkers who could provide real alpha.

Antonio Fortes Senior PM

I have known David for over five years and, during that time (all documented) he has predicted the rise of Trump, every twist and turn during the three-year course of Brexit, including Boris becoming PM (a year before he did), and the landslide election result.

On January 30th he called me and really panicked me (I have all the WhatsApp’s to prove it), which made me dump most of our family equity portfolio and move into cash. He has saved us a large fortune!

When no one was looking, in early January, he warned that the Wuhan Flu was going to become a pandemic that would bring the global economy to a dead stop. Simultaneously he predicted the drop of oil from $65 to sub$27 and the collapse of the stock markets. All these predictions were in papers he wrote, and speeches he gave (some at my Invest Africa events), and most people then thought him mad. How silly (and poor) they look now.

Rob Hersov - Chairman of Invest Africa

Blain's Morning Porridge

Bill Blain - Investment banker and market commentator

I will state from the outset that I generally shun predictions and, by extension, am suspicious of those that claim to see the future. Nonetheless, while David refers to “predictions” on his website, I believe that these are better described as an interpretation of geopolitical conditions through the prism of his Stages of Empire theory. This has enabled David to consistently make seemingly outlandish but remarkably accurate interpretations of current events and, by extension, market calls. Given his interpretative framework, I see no reason why David’s analysis should not remain as consistently accurate for many years to come.

Andy Pfaff - Chief Investment Officer | Coherent Commodity Investment (Pty) Ltd

Many thanks for your Valuable advice on positioning in different asset classes.

Prakash Shirke - CFA Investment Adviser

Recalling our meeting at a Hannam and Partners dinner and subsequent lunch, I have regarded you as something of a sage as you predicted both the Trump victory and Brexit referendum as well as the market meltdown which we have witnessed over the past week or so.

John Battersby  - Director of the South African Chamber of Commerce consultant/journalist/author

Several years ago I had the fortune of meeting David Murrin through Rob Hersov. David captured his audience with his candid dialogue, no frill content and a wit that equaled his exceptional insights. His ability to leverage off historical context and provide relevance to the current global political arena had his audience spellbound. I would recommend David as both a speaker or VIP dinner guest at any table.

Ariella Kuper - CEO Solution Strategists Pty Ltd

I don’t know enough about charting to make much of it myself, but I’ve seen enough to recognize the repetitive nature of market-driven behaviour. Market patterns do repeat and are therefore worth paying attention to. For instance, for a superb overview, take a look at David Murrin’s website. His global forecasts and commentary is worth a sign up to run through his chart-supported outlook and reading of the underlying forces at play

Bill Blain - Morning Porridge and Shard Capital

David Murrin is a long time friend as well as a very special investor. He brings to the 21st century an enormous amount of experience as well as knowledge. We live in a very difficult environment. He is in invaluable.

Johnathan Smith Founder - Chesapeake Asset Management

David Murrin is one of the best global macro forecasters I know, do sign up for his newsletter… ...he is an outstanding human and one of my favourite people in this industry

Anric Blatt Managing Partner - involved with hedge funds and the #FinancialPlanning community since 1994, has done due diligence on 15,000+ funds and has been an investor in thousands of them

You were spot on your forecast of the Tory majority when I spoke with you 2 months before the November election. You were spot on with your forecast months before the Covid-19 pandemic of what impact it would have on the global economy and I did not believe you ! You have been spot on with gold and commodity prices.

As you know, I tend to always look on the bright side of life and try and believe that disasters will be averted but this pandemic and the global economic partial paralysis is an event which I never thought I would experience in my lifetime and clearly will have disastrous economic ramifications for the medium term.

Retrospection can teach us all lessons but the accurate vision for the future is a rare talent.

Lord St. John Anthony - 22nd Baron St John of Bletso is a British peer, politician, businessman and solicitor

Quite often, those of us continuously trading in the markets tend to get lost in the noise and pay less attention to the major geopolitical issues that will shape the global economy for years to come. These geopolitical transformations are happening now. David is there to help you bring these issues into focus and help you think outside the box. We've had numerous in-depth discussions on how these transformations will impact not only our portfolios but our lives in general.

Antonino Fortes Senior Portfollio manager

Who is this for?

This service is for:

  • Banks
  • Pension Funds
  • Resource and commodity companies
  • Hedge Funds (Macro and Long/short)
  • Corporate Treasuries
  • Family Offices
  • HNWIs

What is the basis of David's analysis?

David developed a unique and effective set of behavioural models to predict financial markets, whilst at JPM, which were extremely effective and profitable. They acted as the foundation for his 20-year career as a CIO of his hedge fund Emergent. With some remarkable returns in the most bearish of markets (e.g 84% in 2008 - see track record).

What analysis can I get?

David provides two types of market analysis:

  • The CIOs Long–Short View service is designed to provide long-term and medium-term investment outlooks for long-short funds and aims to follow a portfolio of 50 shares from the sectors that we cover.
  • The Premium CIOs Long–Short View - this service is designed to provide long-term and medium-term investment outlooks into long and short positions in specific shares specific recommendations in a range of markets.

Do you offer different subscription options?

Yes. David offers a number of different levels of subscription to meet your needs and budget, on a 3 or 12-month basis.

How do I gain access to the analysis?

Once subscribed you can login to the site and view the analysis in a secure area of the site. 

Click on the Pricing tab to view the costs and subscribe now.

markets

David Murrin has been a macro trader since 1986, first working at JPM on its first Prop desk and then as a founder and CIO of his Macro and Emerging Market Fund, Emergent Asset Management, for over 20 years. During that time he has had a remarkable track record of predicting major market declines and profiting extensively from them. Short at the highs and then running with the decline in the 1998 Asian Crisis, the 2001 dot com bubble, the 2003 Argentine crisis, the 2007 bear market, the flash crash of 2011, last but not least the February 2020 pandemic risk-off crisis. However, his work not only accurately predicts these big dislocations and but also then focuses on the safe periods to then extract risk-off Alpha. Subscribing to Global Forecaster is effectively akin to having access to an outsourced but very experienced CIO, with a uniquely successful track record.

Global Forecaster provides one of the broadest and most accurate tools for predicting geopolitical events and financial reversals and trends. This is achieved by the integration of two unique behavioural models which act as independently long-range search radars, de-risking against shocks and finding low-risk and high-return trading opportunities and strategies to maximise investment returns. Both models are based on the mosaic gathering of multiple elements of information that, when integrated, create remarkably accurate predictions. Our results speak for themselves: our two long-range search radars are based on:

  1. Our geopolitical predictions are generated from our theories including Dyslexic Strategic Thinking in conjunction with human collective behaviour. The Five-Phase Lifecycle, the Polarisation Process, Dyslexic Strategic Thinking and the Commodity K cycles allow us to predict national behaviours such as the path of the Brexit process, the path of American decline and the aggressive rise of China in considerable detail. These models have allowed us to predict every UK and US election result accurately for the past 20 years and accompanying foreign policy changes and focuses. Having built a baseline of global geopolitics, we can quickly detect new factors that will have profound impacts on geopolitical and financial markets, e.g. on 5th January 2020, we accurately predicted that the Wuhan epidemic would become a global pandemic. Most of all, our model allows us to look at the impact of cycles that have a longer wavelength that can be detected in the price history of modern financial markets, such as the decline of the Western Christian Super Empire.
  2. Our pattern recognition models are applied across the whole global market complex. Global Forecaster uses a probabilistic pattern recognition system which is applied to over 67 markets. This includes 23 Equity indices, 22 FX pairs, 6 bond markets, and 16 commodity markets, and also over 100 individual shares. Our Wave counts are in effect a language to describe market behaviour by identifying patterns over multiple timeframes, to locate reversal points that then unfold into longer-term trends, providing multiple risk-return profiles. Each market is then correlated to others in their sector, to confirm the pattern quality, and then sectors are compared to other sectors to create integrated roadmap scenarios that give further certainty to our predictions.

    Having constructed a clear image of the expectations of markets, we apply our fire control radar to apply specific risk recommendations across specific sectors and markets that can be combined into effective portfolios for Alpha-generating strategies.
     
  3. We make specific real-time risk-adjusted trade recommendations, with entry points and stops, and recommended sizes relating to our evaluation of the quality of the trade (ranging from 33%, 66%, 100% 133%, 166%, 200%). The results are then published at the end of each quarter so that our performance in various sectors can be evaluated by our clients, allowing them to assess the reliability of our forecasts and the quality of our returns. New trades are sent within five minutes of publication to clients’ emails, providing actionable real-time trade recommendations. This is ideal for risk-takers who seek specific trade recommendations with precise low-risk-high-reward entry points. The sequence of Gold trades below shows our process.

financial-analysis-chartsfinancial-analysis-chartsfinancial-analysis-chartsfinancial-analysis-charts

Click a chart to view a larger version.

Please use the tabs above to view our USP, a sample CIOs Long–Short View, quarterly appraisals, testimonials, FAQs and our full list of prices with links to subscribe. 

1. Who Are Our Clients?

Global Forecaster’s clients range from the largest pension funds and hedge funds in the world to family offices, professional investors (as defined by the FCA). All who value our long and medium-term strategies. Whilst our hedge fund clients benefit from our specific trading recommendations as part of an integrated strategy. All benefit from the increase of 360-degree situational awareness that we offer, derived from a source of analysis that is independent of the impact of collective sentiment that makes most analysis bullish at the highs and bearish at the lows.

  • Banks
  • Pension Funds
  • Resource and commodity companies
  • Hedge Funds (Macro and Long/short)
  • Corporate Treasuries
  • Family Offices
  • HNWIs

2. How To Access Our Market Analysis and Predictions

Global Forecaster has created a range of Products for the needs of both Macro Directional and Long–Short Clients; All new updates will arrive by email to your inbox within 5 minutes of publication. We offer paid trials of 3 months and thereafter 12-month rolling subscriptions. All prices are ex-VAT.

1. The CIOs Long–Short View service is designed to provide long-term and medium-term investment outlooks for long-short funds and aims to follow a portfolio of 50 shares from the sectors that we cover. We use our macro construct as expressed in our CIOs Macro View to find favoured thematics that allow us to then focus on our chosen sectors, eg we might be bullish on oil so we would then focus on the oil sector. Then within the sector, we look for the strongest share to express a bull view and the weakest share to express a bear view. Thus we use a top-down bottom ups methodology that has proven very successful. Our portfolio is then updated as and when major market events provide new information to manage our active portfolio. This product is ideal for long/short funds, who seek specific trade strategic and detailed recommendations. When combined with our Premium Long–Short View this seeks to provide precise low risk-high reward entry points. £1500 per month per subscriber.

2. The Premium CIOs Long–Short View – this service is designed to provide long-term and medium-term investment outlooks into long and short positions in specific shares in a range of markets outlined below. We provide real-time entry points and stops and recommended sizes relating to our evaluation of the quality of the trade (ranging from 33%, 66%, 100% 133%, 166%, 200%). Our results are published at the end of each quarter, so that our performance in various sectors can be evaluated by our clients, allowing them to assess the reliability of our forecasts and the quality of our returns. New trades are sent via emails providing actionable real-time trade recommendations. This product is ideal for risk-takers who seek specific trade recommendations with precise low-risk-high reward entry points. £3500 per month per subscriber. They cover the following sectors:

  • Agriculture
  • Aviation
  • Banks
  • Consumer
  • Credit
  • Energy
  • Entertainment
  • Funds
  • Heavy Industry
  • Hi-Tech
  • Homebuilders
  • Mining
  • Precious Metals
  • Russell 2000
  • Space

3. The Long/Short Package includes The CIOs Long–Short View, The Premium CIOs Long–Short View and Equity Indices Executions £5000 per month per subscriber. In addition, advisory packages are available on request.

4. The External CIO – provides a bespoke service that integrates every aspect of The Long–Short Package subscription with the risk-taking aspects of our clients portfolios through personnel discussion and interaction. This also includes objective support with respect to the harnessing of trading psychology to maximise profitability.  A useful tool to maximise returns when under pressure from losses, or indeed after having an excellent run of profitability. Price by agreement. Engage David

Individual Share Analysis & Forecasts

The CIOs Long–Short View

This product is ideal for long–short funds, who seek specific trade strategies and detailed recommendations. When combined with our Individual Share Analysis & Forecasts this seeks to provide precise low risk-high reward entry points.

1 month - £1500

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Access to The CIOs Long–Short View - long-term and medium-term investment outlooks for long-short funds and aims to follow a portfolio of 50 shares from the sectors that we cover, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.

Access to David’s Long–Short Trade Executions - real-time trade recommendations across Agriculture, Aviation, Banks, Consumer, Credit, Energy, Entertainment, Heavy Industry, Hi-Tech, Homebuilders, Mining, Precious Metals, Russell 2000, Space and Travel, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.
View an example execution

£1500 per month

+ VAT UK ONLY

The Premium CIOs Long–Short View

You’ll receive David’s invaluable real-time trade recommendations, including charts and market outlooks. Sectors covered include: Agriculture, Aviation, Banks, Consumer, Credit, Energy, Entertainment, Heavy Industry, Hi-Tech, Homebuilders, Mining, Precious Metals, Russell 2000, Space and Travel.

1 month - £3500

Access to The CIOs Long–Short View - long-term and medium-term investment outlooks for long-short funds and aims to follow a portfolio of 50 shares from the sectors that we cover, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.

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Access to David’s Long–Short Trade Executions - real-time trade recommendations across Agriculture, Aviation, Banks, Consumer, Credit, Energy, Entertainment, Heavy Industry, Hi-Tech, Homebuilders, Mining, Precious Metals, Russell 2000, Space and Travel, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.
View an example execution

£3500 per month

+ VAT UK ONLY

Long/Short Package

David’s premium package is for anyone who seeks specific trade strategies and detailed recommendations.

You’ll receive David’s invaluable real-time trade recommendations, including charts and market outlooks, for Equity indices and individual shares across a range of sectors, within a secure member’s area on the website.

 

1 month - £5000

+ VAT UK ONLY

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Access to The CIOs Long–Short View - long-term and medium-term investment outlooks for long-short funds and aims to follow a portfolio of 50 shares from the sectors that we cover, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.

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Access to David’s Long–Short Trade Executions - real-time trade recommendations across Agriculture, Aviation, Banks, Consumer, Credit, Energy, Entertainment, Heavy Industry, Hi-Tech, Homebuilders, Mining, Precious Metals, Russell 2000, Space and Travel, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.
View an example execution

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Access to David’s David’s Macro Trade Executions - real-time trade recommendations across Equity Indices, within a secure member’s area on the website. Also sent in a newsletter, within minutes of publication to the website.
View an example execution

David Murrin's registered office is:

The Mill, Blackdown Park, Haselmere, Surrey GU27 3BU

Email

Liability disclaimer

While every effort has been made to provide clear, accurate and complete information, the changing nature of laws and regulations may lead to delays, omissions or inaccuracies in information contained on this website. David Murrin does not guarantee that the website will be error-free, omission-free, free from viruses, uninterrupted or without delay. Therefore, the information is provided ‘as is' without warranties of any kind, expressed or implied, including accuracy, timeliness and completeness.

The information contained on the website has been prepared for general guidance only; it does not constitute professional advice. Users should consult with a professional advisers for advice concerning specific matters before making any decision. David Murrin does not accept liability or responsibility for loss (personal or business) occasioned to any person acting or refraining from action as a result of any information contained on this website.

The website contains hypertext links to third party websites. David Murrin cannot provide any warranty (express or implied) as to the accuracy or source of information contained on these third party websites. Hypertext links from the David Murrin website to third party websites do not constitute any endorsement of these third party companies or organisations and are provided purely as a convenience to our users.

U.S. GOVERNMENT REQUIRED DISCLAIMER (REQUIRED BY THE COMMODITY FUTURES TRADING COMMISSION)

Futures, options, bond, Crypto Currency, FX, precious metals  and share trading all have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website and the products, services and other information contained herein is neither a solicitation nor an offer to Buy/Sell any of these markets. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
 
Trading Involves Risk

Use of any of this information is entirely at your own risk, for which Global Forecaster will not be liable. neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and content found or offered in the material for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. All information exists for nor other than general educational purposes.
 
CFTC RULE 4.41.(b)(1)(i)

Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

The CIOS Long–Short View and Long–Short Subscriptions (“the Service”)

  • 100% advance payment for subscription packages and for renewals
  • Subscription period starts from the date of payment realization.
  • No refund of payment allowed under any circumstances.

All decisions of buying & selling stocks are at the sole discretion of the subscriber. The recommendations are based on Technicals/Fundamentals, Facts, Indicators and other methods, which change as the markets are dynamic and we are not liable for any loss that could occur as a result of the recommendations.

You should be aware of the risks inherent in the stock market. Past performance does not guarantee or imply future success. You cannot assume that profits or gains will be realized or that any recommendation made by the Service will be profitable. The purchase of securities discussed by the Service may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities, or making any investment decisions. You assume the entire cost and risk of any investing and/or trading you choose to undertake.

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The services are strictly provided for personal and non-commerical use. You may not resell, redistribute, broadcast or transfer the information or use the information in a searchable, machine-readable database unless separately and specifically authorized in writing by David Murrin prior to such use.

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Copyright and all intellectual property rights in the content of this site are vested with David Murrin and reserved, unless indicated otherwise. The content of this site belongs to David Murrin unless indicated otherwise.

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Summary of Global Forecaster

Global Forecaster is a world leader in predicting geopolitical and financial market moves, leading to high alpha generation.

The Global Forecaster’s range of products has been designed to be the perfect adjunct to enhance CIOs and risk-takers investment returns. We provide a fully accountable real-time trade recommendation platform. This allows our clients to access the systematic trading inputs from an external Alpha-generating CIO, with 35 years of macro directional trading experience.

Recommendations are made based on pattern recognition techniques in some 5 sectors and 80 markets within the macro markets complex and 200 shares and are structured as a transparent real-time portfolio. Our strategies are published as The CIOs Long–Short View, which highlights the Geopolitical views contained in our Murrinations Insights that should be included in the investment thesis. Our financial analysis service then gives recommendations of trades that we are running and the new ones we will be looking to put on. Then every new trade recommendation is notified by an email alert, with a real-time trade with an entry point/stop level/size.

Individual Shares

  • AVIATION
  • BANKING
  • CREDIT
  • ENERGY
  • ENTERTAINMENT
  • HI-TECH
  • HEAVY INDUSTRY
  • HOMEBUILDERS
  • MINING
  • PRECIOUS METALS
  • RUSSELL 2000
  • SPACE

Global Forecaster Trade Recommendations

GF is structured to be a transparent real-time portfolio. The strategy, published as The CIOs Long–Short View, which highlights the geopolitical views from our Murrinations Insights that should be included in the investment thesis. The conclusion then gives outlines of trades we are running and the new ones we will be looking to put on. Then every new trade recommendation is notified by an email alert. With a real-time trade with an entry point/stop level/size.

The below table shows  an example of a supermax long gold trade entered at the lows which as part of our major play within our precious metals strategy

  • Numbers T16a to T 16c refer to 3 separate trade entry points 100% +100%+200% to make a total 400% sized  trade
  • Over 8 quarters up to the end of Q320, gold has made over 420 trade units (trade sizes are normally from (33%) =3.3 units to (200%)= 20units. Only once in 12 months or so would we make a (400%)40 unit recommendation, like the one in play at the moment.
  • Note that the market to market (in yellow) recommendation T16a to c is up 300 units this quarter-which is a whooper of trade. And makes a total return in gold of 720.5 units 40 unit over 8.5 quarters.

For Silver, the returns were even greater.

  • Over 8 quarters up to the end of Q320 silver has made over 598 trade units
  • Note that the current recommendations T22a,b,c, are now up 386 units for this quarter which makes silver the highest return of all 80 of the macro markest that we trade and track at 985 units over 8.5 quarters.

Every quarter we then publish our results for every sector and every market and a summary of our top 15 best markets at the end of each quarter. Showing our consistency and breadth of coverage.

Portfolio Construction

From this system, we can build any portfolio according to the market and sector and the risk allowance.

Eg a simple silver plus gold portfolio that equated to risking  0.5% per 10 trade units would have made

Gold(720 units) plus silver (985.1 units)=42.2% over 9 quarters

never risking more than 1% at any one time, except the last current trade that risked 2%

These are significant risk-adjusted returns.

Furthermore, we can build any portfolio of any composition using this process in our long-short share positions.

 

Long/Short Sectors

This service is designed to provide long term and medium term investment outlooks in a range of markets including:

Gold Miners

  • Eldorado Gold
  • Wheaton Precious Metals
  • Harmony
  • Agnico Eagle Mines
  • Kirkland Lake Gold Ltd
  • Novagold Resources
  • Barrick Gold
  • GoldFields
  • Hecla Gold

Funds

  • Blackrock
  • Berkshire Hathaway
  • Lansdown

Silver Miners

  • Pan American Silver
  • Silver Lake Resources
  • SSR Mining
  • Coeur
  • Sibyane Stillwater

Platinum Miners

  • Anglo American Platinum

Heavy Industry

  • Fuji Heavy Industries
  • Melrose
  • US Steel

Homebuilders

  • DR Horton
  • Barratt
  • Lennar Corp
  • Pultegroup Inc

Mining

  • Glencore
  • BHP
  • Freeport McMoRan
  • Rio Tinto
  • Yellow Cake PLC

Hi-Tech

  • Taiwan Semi Conductor
  • Apple
  • Meta
  • Microsoft
  • Tesla
  • Amazon

Russell 2000 Shares

  • Appian
  • Gamestock
  • Gamestock
  • Novavax
  • Plug Power

Aviation

  • Airbus
  • International Consolidated Airlines Group
  • Boeing
  • Rolls Royce
  • Easy Jet

Space

  • Virgin

Banks

  • HSBC
  • Lloyds PLC
  • Nat West PLC
  • Capital One
  • Bancorp
  • Bank Of America
  • Bank Of Asia
  • Bank Of Scotland
  • Barclays
  • Citi
  • Goldmans
  • JPM
  • Lloyds

Credit

  • Mastercard
  • Visa

Energy

  • BP
  • Chevron
  • Exxon
  • Premier Oil
  • Shell
  • Tullow

Entertainment

  • Peleton
  • Netflix
  • Disney

Those marked in bold are more frequently updated.

Sample Executions

Below are some examples from the sectors covered. Click on a sector or use the arrows provided to view each slide.

Gold Miners
Gold Miners
Heavy Industry
Hi-Tech
Aviation
Aviation
Entertainment

Hecla (Gold ) Mining Ready To Rally Strongly

Medium Term
Very Bullish

The majority of our Gold and Silver longs have survived the recent correction very well, having been very well positioned. Out of 12 only four stopped us out. One of Which is Hecla.

However the pattern of this being  end of of a correction is still in place so we are rentering our long position,

T13b buy 100% @ $500 with a $455 stop

 

Hecla T13b

Novagold Looking Good To Rally

Medium Term
Very Bullish

Novagold is looking good to rally from here and  we are targeting 1400

Buy 100% in T18a here @ 720 with a 665 stop.

T18a Novagold

Melrose Industries Ready For A Major Decline

Medium Term
Very Bearish

Melrose reversed as anticipated below 200 leaving a double top to the three corrective wave rally.

A break below 140 will see acceleration to ultimately reach new lows on  March 2020. This a weaker version of the FTSE-100 pattern.

lower stops to entry point at 175.0

Melrose 2D

FaceBook Ready To Face Plant

Medium Term
Very Bearish

Facebook has traced out 5 clear wave since 2013 and most critically its 4th wave is a triangle and as such we expect it to return to its base in the 25000 zone in what at the monet looks to be a 4th wave of larger degree as Long term it may well mount another rally to new high from that region in the year ahead.

But before that Tin hats on as the controller at Duxford famously said as the German bombers appeared overhead!

T2a sell 200% here @ 36252 with a 38425 stop

facebook T2a

Boeing's debt Weighs Heavily

Medium Term
Bearish

Boeing looks to have completed it correction and should now decline to new lows

Short 100% in T4 from 32423

Boeing T4

Easy Jet Not Looking So Easy

Medium Term
Very Bearish

Easy Jet looks to have completed a very clear three wave correction since March  2020 which is now ready to break lower very sharply.A break below 930 should accelerate the decline. Our 12 month target is sub 400.

T27s a sell 100% @ 1016 with 1090 stop

Easy Jet T27 S

Peletons Fall makes 15x On Our Short Position

Medium Term
Bearish

Peleton has fallen dramatically to make 15x our original risk but there is still more to come to the downside.

lower stop to 8000 and run the trade.

Peleton T21 D

Risk Allocation Rules

  1. Trade sizes are allocated on previous success and quality of the individual signals combined with signals from the bigger picture.
  2. The trade weighting model has evolved over the past quarters to hopefully give clients an improved measure of the perceived quality of opportunity associated with a trade recommendation. The essential principle is that each trade recommendation can have up to 10 risk unit on at any one time.100%=a 10 unit risk when translated into our performance stats.
    1. In Q4;2019 and Q1;2020 Trades were weighted with up to three risk units. Either 1x or 2x or 3x positions. In effect, a 1x position was a 33.3% weighting and  3x was a 100% weighting.
    2. In Q2;2020 Trades were weighted with up to nine risk units. Either 3x or 6x or 9x positions. In effect, a 3x position was a 33.3% weighting and  9x was a 100% weighting.
    3. In Q3;2020 Trades are migrating from the Q2;2020 structure (above) to one of the percentages. Thus In effect, a 3x position moves to a 33.3% weighting and a 9x moves to 100% weighting.
  3. Each unit is the same monetary amount from entry to stop, adjusted to size. The tighter the stop the bigger the trade size.
  4. Stops are moved as the trade progress and labelled stop 1, stop 2 and stop 3, etc.
  5. As our levels are set precisely we allow for errors in data and illiquidity. Thus stops have a discretionary add to survive through high or low tick outs.
    1. 0.5% a percent ticks in equity indexes and 2% on individual equities
    2. 40 ticks on ten year Bond trades.
    3. 0.5% on FX.
    4. 0.5% on Gold 0.9% cents on silver.
    5. 1.2% cents on Oil and all other commodities
  6. Each quarter-end there will be a performance summary  for my geopolitical calls and market calls and profitability concerning each market https://www.davidmurrin.co.uk/arkent-scenario-updates/arkent-q1-2020-performance-appraisal

QUANTUM ENTANGLEMENT AND COLLECTIVE HUMAN BEHAVIOUR

From the start of my career in finance as discretionary trader 35 years ago, I have believed that the price of a market at any one time contains all aspects of the information available. Why I hear you ask?

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Geopolitics

GEOPOLITICS AND MACRO TRADING

Global macro managers have to navigate a complex web of interconnected risks: market, credit, liquidity, financing, counterparty and operational, to name but a few...

Download PDF

Wave structure

PATTERN ANALYSIS IN MARKETS

Pattern analysis templates for Market Analysis based on Elliott wave counts.

Download PDF

forecasting

THE ASYMMETRY OF SUPER FORECASTING

We would all like to benefit from seeing further into the future, whether buying stocks, crafting policy, launching a new product, or simply planning the week's meals. Unfortunately, people in general tend to be terrible forecasters!

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market mavericks

NEW MARKET MAVERICKS - DAVID MURRIN: TRADING THE ROADMAP

We would all like to benefit from seeing further into the future, whether buying stocks, crafting policy, launching a new product, or simply planning the week's meals. Unfortunately, people in general tend to be terrible forecasters!

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1. Who Are Our Clients?

Global Forecaster’s clients range from the largest pension funds and hedge funds in the world to family offices, professional investors (as defined by the FCA). All who value our long and medium-term strategies. Whilst our hedge fund clients benefit from our specific trading recommendations as part of an integrated strategy. All benefit from the increase of 360-degree situational awareness that we offer, derived from a source of analysis that is independent of the impact of collective sentiment that makes most analysis bullish at the highs and bearish at the lows.

  • Banks
  • Pension Funds
  • Resource and commodity companies
  • Hedge Funds (Macro and Long/short)
  • Corporate Treasuries
  • Family Offices
  • HNWIs

2. How To Access Our Market Analysis and Predictions

Global Forecaster has created a range of Products for the needs of both Macro Directional and Long Short Clients; All new updates will arrive by email to your inbox within 5 minutes of publication. We offer paid trials of 3 months and thereafter 12-month rolling subscriptions. All prices are ex-VAT.

1. The CIOs Macro View - comprises our full spectrum market strategy across all seven Macro sectors defined below, which integrates all of the elements of our Geopolitical perspectives (Murrinations Insights) and market views into one coherent strategy and perspective. They are updated as and when major market events provide new information, which is on average once or twice a month. This product is ideal for CIOs and Senior Risk takers to gain an external and independent perspective. Our clients include hedge funds, pension funds and family offices. Our strategies cover long and medium time frames, and are designed to be used in conjunction with our Macro Trade Executions to maximise risk versus reward through short-term entry points that then cascade in the longer-term trend direction. £1500 per month per subscriber.

2. The Premium CIOs View - This includes Macro Trade Executions, Murrinations Insights and The CIOs Macro View - this service is designed to provide specific trade recommendations in line with The CIOs Macro View – in the seven market sectors outlined below. We provide real-time entry points and stops and recommended sizes relating to our evaluation of the quality of the trade (ranging from 33%, 66%, 100% 133%, 166%, 200%). Our results are published at the end of each quarter, so that our performance in various sectors can be evaluated by our clients, allowing them to assess the reliability of our forecasts and the quality of our returns. New trades are sent via emails providing actionable real-time trade recommendations. Each sector is available to subscribe to separately or all together as part of our Global Macro package.; The global market sectors are:

  • Equity Indices
  • FX
  • Crypto Currencies
  • Bond Markets
  • Emerging Market FX and Indices
  • Commodity Markets

The Premium CIOs View includes one sector for £2200 per month. Additional sectors can be purchased at the same time at a cost of £1000 per month.

3. The Global Macro Package includes Murrinations Insights, The CIOs Macro View, and The Premium CIOs View with its Macro Trade Executions for all sectors costing £5000 per month. In addition, advisory packages are available on request.

4. The External CIO – provides a bespoke service that integrates every aspect of The Global Macro Package subscription with the risk-taking aspects of our clients portfolios through personnel discussion and interaction. This also includes objective support with respect to the harnessing of trading psychology to maximise profitability.  A useful tool to maximise returns when under pressure from losses, or indeed after having an excellent run of profitability. Price by agreement. Engage David

 

David Murrin's registered office is:

The Mill, Blackdown Park, Haslemere, Surrey GU27 3BU

Email

Liability disclaimer

While every effort has been made to provide clear, accurate and complete information, the changing nature of laws and regulations may lead to delays, omissions or inaccuracies in information contained on this website. David Murrin does not guarantee that the website will be error-free, omission-free, free from viruses, uninterrupted or without delay. Therefore, the information is provided ‘as is' without warranties of any kind, expressed or implied, including accuracy, timeliness and completeness.

The information contained on the website has been prepared for general guidance only; it does not constitute professional advice. Users should consult with a professional adviser for advice concerning specific matters before making any decision. David Murrin does not accept liability or responsibility for loss (personal or business) occasioned to any person acting or refraining from action as a result of any information contained on this website.

The website contains hypertext links to third-party websites. David Murrin cannot provide any warranty (express or implied) as to the accuracy or source of information contained on these third-party websites. Hypertext links from the David Murrin website to third-party websites do not constitute any endorsement of these third-party companies or organisations and are provided purely as a convenience to our users.

U.S. Government Required Disclaimer (Required by the Commodity Futures Trading Commission)

Futures, options, bond, Crypto Currency, FX, precious metals  and share trading all have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website and the products, services and other information contained herein is neither a solicitation nor an offer to Buy/Sell any of these markets. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
 
Trading Involves Risk

Use of any of this information is entirely at your own risk, for which Global Forecaster will not be liable. neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or suitability of the information and content found or offered in the material for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. All information exists for nor other than general educational purposes.
 
CFTC RULE 4.41.(b)(1)(i)

Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

The CIOs Macro View and Macro Market Subscriptions (“the Service”)

  • 100% advance payment for subscription packages and for renewals
  • Subscription period starts from the date of payment realization.
  • No refund of payment allowed under any circumstances.

All decisions of buying & selling stocks are at the sole discretion of the subscriber. The recommendations are based on Technicals/Fundamentals, Facts, Indicators and other methods, which change as the markets are dynamic and we are not liable for any loss that could occur as a result of the recommendations.

You should be aware of the risks inherent in the stock market. Past performance does not guarantee or imply future success. You cannot assume that profits or gains will be realized or that any recommendation made by the Service will be profitable. The purchase of securities discussed by the Service may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities, or making any investment decisions. You assume the entire cost and risk of any investing and/or trading you choose to undertake.

All information provided by the Service is obtained from sources believed to be accurate and reliable. However, due to the number of sources from which information on the Service is obtained, and the inherent hazards of electronic distribution, there may be delays, omissions, or inaccuracies in such information.

These terms and conditions apply to the User who uses the Online Payment Services provided for any payment made to David Murrin. By authorizing a payment to David Murrin through the online payment service, it would be treated as a deemed acceptance of these terms and conditions. David Murrin reserves all the rights to amend these terms and conditions at any time.

Under the AIFMD, a "'professional investor' means an investor which is considered to be a professional client or may, on request, be treated as a professional client within the meaning of Annex II to Directive 2004/39/EC".i.e a professional investor means an investor who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs.

No Retransmission Of Information

The services are strictly provided for personal and non-commerical use. You may not resell, redistribute, broadcast or transfer the information or use the information in a searchable, machine-readable database unless separately and specifically authorized in writing by David Murrin prior to such use.

Copyright

Copyright and all intellectual property rights in the content of this site are vested with David Murrin and reserved, unless indicated otherwise. The content of this site belongs to David Murrin unless indicated otherwise.

Any unauthorised use of any material on the website may violate copyright, trademark and other laws. Materials on this website may not be modified, reproduced or publicly displayed, performed or distributed or used for any public or commercial purposes.

Links

Our website contains links to other sites, but this Privacy Policy applies only to personal data collected via the website operated by David Murrin, and to how David Murrin processes personal data. We are not responsible for the privacy policies of other sites.

Use of email

Although we take great care to protect the security of communications to and from our website, please be aware that we cannot guarantee that such communications will remain confidential before they have arrived in or after they have left our systems.

Summary of Global Forecaster

Global Forecaster is a world leader in predicting geopolitical and financial market moves, leading to high alpha generation.

The Global Forecaster’s range of products has been designed to be the perfect adjunct to enhance CIOs and risk-takers investment returns. We provide a fully accountable real-time trade recommendation platform. This allows our clients to access the systematic trading inputs from an external Alpha-generating CIO, with 35 years of macro directional trading experience.

Recommendations are made based on pattern recognition techniques in some 5 sectors and 80 markets within the macro markets complex and 200 shares and are structured as a transparent real-time portfolio. Our strategies are published as CIOs Macro Views, which highlight the Geopolitical views contained in our Murrinations that should be included in the investment thesis. Coupled with our road map for the macro sector complex, and an analysis of each macro/share sector and how it interrelates with the other markets. Our financial analysis service then gives recommendations of trades that we are running and the new ones we will be looking to put on. Then every new trade recommendation is notified by an email alert, with a real-time trade with an entry point/stop level/size.

Macro Products

  • Equities
  • FX
  • Crypto Currencies
  • Bonds
  • Emerging Markets
  • Commodities

Global Forecaster Trade Recommendations

GF is structured to be a transparent real-time portfolio. With the strategy published as CIOs Macro Views, which heights the geopolitical views from the Murrinations that should be included in the investment thesis. Coupled with our road map and an analysis of each macro/share sector and how it interrelates with the other markets. The conclusion then gives outlines of trades we are running and the new ones we will be looking to put on. Then every new trade recommendation is notified by an email alert. With a real-time trade with an entry point/stop level/size.

The below table shows  an example of a supermax long gold trade entered at the lows which as part of our major play within our precious metals strategy

  • Numbers T16a to T 16c refer to 3 separate trade entry points 100% +100%+200% to make a total 400% sized  trade
  • Over 8 quarters up to the end of Q320, gold has made over 420 trade units (trade sizes are normally from (33%) =3.3 units to (200%)= 20units. Only once in 12 months or so would we make a (400%)40 unit recommendation, like the one in play at the moment.
  • Note that the market to market (in yellow) recommendation T16a to c is up 300 units this quarter-which is a whooper of trade. And makes a total return in gold of 720.5 units 40 unit over 8.5 quarters.

For Silver, the returns were even greater.

  • Over 8 quarters up to the end of Q320 silver has made over 598 trade units
  • Note that the current recommendations T22a,b,c, are now up 386 units for this quarter which makes silver the highest return of all 80 of the macro markets that we trade and track at 985 units over 8.5 quarters.

Every quarter we then publish our results for every sector and every market and a summary of our top 15 best markets at the end of each quarter. Showing our consistency and breadth of coverage.

Portfolio Construction

From this system, we can build any portfolio according to the market and sector and the risk allowance.

Eg a simple silver plus gold portfolio that equated to risking  0.5% per 10 trade units would have made

Gold(720 units) plus silver (985.1 units)=42.2% over 9 quarters

never risking more than 1% at any one time, except the last current trade that risked 2%

These are significant risk-adjusted returns.

Furthermore, we can build any portfolio of any composition using this process in both Macro markets positions.

Who is this for?

This service is for:

  • Banks
  • Pension Funds
  • Resource and commodity companies
  • Hedge Funds (Macro and Long/short)
  • Corporate Treasuries
  • Family Offices
  • HNWIs

What is the basis of David's analysis?

David developed a unique and effective set of behavioural models to predict financial markets, whilst at JPM, which were extremely effective and profitable. They acted as the foundation for his 20-year career as a CIO of his hedge fund Emergent. With some remarkable returns in the most bearish of markets (e.g 84% in 2008 - see track record).

What analysis can I get?

David provides two types of market analysis:

  • The CIOs Macro View - These are the integration of all elements of our market views into one coherent strategy and perspective. Integrating price models and our Geopolitical perspectives (Murrinations) into a single holistic predictive perspective. They are updated as and when major market events provide new information, which is on average once or twice a month. (Formerly Arkent Scenarios, named after the Ark and severity of the next expected global economic downturn.)
  • Macro Trade Executions - This service is designed to provide long-term and medium-term investment outlooks and specific executions in a range of markets outlined above. Updates are sent out real-time as and when the market moves require.

Do you offer different subscription options?

Yes. David offers a number of different levels of subscription to meet your needs and budget, on a 3 or 12-month basis.

How do I gain access to the analysis?

Once subscribed you can login to the site and view the analysis in a secure area of the site. 

Click on the Pricing tab to view the costs and subscribe now.

David Murrin has been a macro trader since 1986, first working at JPM on its first Prop desk and then as a founder and CIO of his Macro and Emerging Market Fund, Emergent Asset Management, for over 20 years. During that time he has had a remarkable track record of predicting major market declines and profiting extensively from them. Short at the highs and then running with the decline in the 1998 Asian Crisis, the 2001 dot com bubble, the 2003 Argentine crisis, the 2007 bear market, the flash crash of 2011, last but not least the February 2020 pandemic risk-off crisis. However, his work not only accurately predicts these big dislocations and but also then focuses on the safe periods to then extract risk-off Alpha. Subscribing to Global Forecaster is effectively akin to having access to an outsourced but very experienced CIO, with a uniquely successful track record.

Global Forecaster provides one of the broadest and most accurate tools for predicting geopolitical events and financial reversals and trends. This is achieved by the integration of two unique behavioural models which act as independent long-range search radars, de-risking against shocks and finding low-risk and high-return trading opportunities and strategies to maximise investment returns. Both models are based on the mosaic gathering of multiple elements of information that, when integrated, create remarkably accurate predictions. Our results speak for themselves: our two long-range search radars are based on:

  1. Our geopolitical predictions are generated from our theories including Dyslexic Strategic Thinking in conjunction with human collective behaviour. The Five-Phase Lifecycle, the Polarisation Process, and the Commodity K cycles allow us to predict national behaviours such as the path of the Brexit process, the path of American decline and the aggressive rise of China in considerable detail. These models have allowed us to predict every UK and US election result accurately for the past 20 years and accompanying foreign policy changes and focuses. Having built a baseline of global geopolitics, we can quickly detect new factors that will have profound impacts on geopolitical and financial markets, e.g. on 5th January 2020, we accurately predicted that the Wuhan epidemic would become a global pandemic. Most of all, our model allows us to look at the impact of cycles that have a longer wavelength that can be detected in the price history of modern financial markets, such as the decline of the Western Christian Super Empire.
  2. Our pattern recognition models are applied across the whole global market complex. Global Forecaster uses a probabilistic pattern recognition system which is applied to over 67 markets. This includes 23 Equity indices, 22 FX pairs, 6 bond markets, and 16 commodity markets, and also over 100 individual shares. Our Wave counts are in effect a language to describe market behaviour by identifying patterns over multiple timeframes, to locate reversal points that then unfold into longer-term trends, providing multiple risk-return profiles. Each market is then correlated to others in their sector, to confirm the pattern quality, and then sectors are compared to other sectors to create integrated roadmap scenarios that give further certainty to our predictions.

    Having constructed a clear image of the expectations of markets, we apply our fire control radar to apply specific risk recommendations across specific sectors and markets that can be combined into effective portfolios for Alpha-generating strategies.
     
  3. We make specific real-time risk-adjusted trade recommendations, with entry points and stops, and recommended sizes relating to our evaluation of the quality of the trade (ranging from 33%, 66%, 100% 133%, 166%, 200%). The results are then published at the end of each quarter so that our performance in various sectors can be evaluated by our clients, allowing them to assess the reliability of our forecasts and the quality of our returns. New trades are sent within five minutes of publication to clients’ emails, providing actionable real-time trade recommendations. This is ideal for risk-takers who seek specific trade recommendations with precise low-risk-high-reward entry points. The sequence of Gold trades below shows our process.

financial-analysis-chartsfinancial-analysis-chartsfinancial-analysis-chartsfinancial-analysis-charts

Click a chart to view a larger version.

Please use the tabs above to view our USP, a sample CIOs Macro View, quarterly appraisals, testimonials, FAQs and our full list of prices with links to subscribe. 

I have known David since 1988 when I headed Sterling Eurobond trading at JPMorgan in London. David was then and remains a polymath whose fascination and study of behavioural patterns is prescient. His track record, available on his website Quarterly performance appraisals, reveals his accuracy in pinpointing entry and exit points for his lateral views of markets, geopolitical events and human behaviour. Following his initial success as one of the first proprietary traders at JPM, David was asked to set up and run a price-based market analysis group. This was an innovative and bold move for a traditional and highly conservative operation. What impressed me most about David was his independent and lateral analysis. Never one to be carried along by the crowd David saw patterns that others did not which were portents of market moves. My interactions with David at JPM led to a long and enduring relationship with him that continues nearly 35 years later. During that time I have watched him develop and improve his market behavioural models to their current form. Whilst no market predictor will ever be right one hundred per cent of the time David's consistency and his risk-reward approach as revealed in his audited results, are compelling. The precision of his entry points for trades which provide low-risk trading opportunities are reflected in his quarterly published trading results. His insights are extremely valuable and alpha generative, across not only the main market sectors but individual shares. Whether your interest is in predicting market movements, geopolitical events or behavioural modelling David’s book Breaking the Code of History was and continues to be groundbreaking and has inspired many coming after him to explore David’s compelling analysis.

Dominic Price is a veteran banker who worked for JPMorgan for over 25 years including in several senior roles in Asia and was a subsequently a Senior Advisor to JPMorgan. (January 2023.)

David, your fully integrated work combining global geopolitical historical perspective, overlaid with a keen understanding of the inner working of financial markets, provides a level of wisdom that is rare. The quality and depth of research is invaluable to leaders across the political, corporate and investment disciplines.

Satish Rai - Chief Investment Officer OMERS Pension Fund Canada

David Murrin is an amazing geopolitical and macro thinker. He was my consultant while I was at Exoduspoint and one of the few non-linear thinkers who could provide real alpha.

Antonio Fortes Senior PM

I have known David for over five years and, during that time (all documented) he has predicted the rise of Trump, every twist and turn during the three-year course of Brexit, including Boris becoming PM (a year before he did), and the landslide election result.

On January 30th he called me and really panicked me (I have all the WhatsApp’s to prove it), which made me dump most of our family equity portfolio and move into cash. He has saved us a large fortune!

When no one was looking, in early January, he warned that the Wuhan Flu was going to become a pandemic that would bring the global economy to a dead stop. Simultaneously he predicted the drop of oil from $65 to sub$27 and the collapse of the stock markets. All these predictions were in papers he wrote, and speeches he gave (some at my Invest Africa events), and most people then thought him mad. How silly (and poor) they look now.

Rob Hersov - Chairman of Invest Africa

Blain's Morning Porridge

Bill Blain - Investment banker and market commentator

I will state from the outset that I generally shun predictions and, by extension, am suspicious of those that claim to see the future. Nonetheless, while David refers to “predictions” on his website, I believe that these are better described as an interpretation of geopolitical conditions through the prism of his Stages of Empire theory. This has enabled David to consistently make seemingly outlandish but remarkably accurate interpretations of current events and, by extension, market calls. Given his interpretative framework, I see no reason why David’s analysis should not remain as consistently accurate for many years to come.

Andy Pfaff - Chief Investment Officer | Coherent Commodity Investment (Pty) Ltd

Many thanks for your Valuable advice on positioning in different asset classes.

Prakash Shirke - CFA Investment Adviser

Recalling our meeting at a Hannam and Partners dinner and subsequent lunch, I have regarded you as something of a sage as you predicted both the Trump victory and Brexit referendum as well as the market meltdown which we have witnessed over the past week or so.

John Battersby  - Director of the South African Chamber of Commerce consultant/journalist/author

Several years ago I had the fortune of meeting David Murrin through Rob Hersov. David captured his audience with his candid dialogue, no frill content and a wit that equaled his exceptional insights. His ability to leverage off historical context and provide relevance to the current global political arena had his audience spellbound. I would recommend David as both a speaker or VIP dinner guest at any table.

Ariella Kuper - CEO Solution Strategists Pty Ltd

I don’t know enough about charting to make much of it myself, but I’ve seen enough to recognize the repetitive nature of market-driven behaviour. Market patterns do repeat and are therefore worth paying attention to. For instance, for a superb overview, take a look at David Murrin’s website. His global forecasts and commentary is worth a sign up to run through his chart-supported outlook and reading of the underlying forces at play

Bill Blain - Morning Porridge and Shard Capital

David Murrin is a long time friend as well as a very special investor. He brings to the 21st century an enormous amount of experience as well as knowledge. We live in a very difficult environment. He is in invaluable.

Johnathan Smith Founder - Chesapeake Asset Management

David Murrin is one of the best global macro forecasters I know, do sign up for his newsletter… ...he is an outstanding human and one of my favourite people in this industry

Anric Blatt Managing Partner - involved with hedge funds and the #FinancialPlanning community since 1994, has done due diligence on 15,000+ funds and has been an investor in thousands of them

You were spot on your forecast of the Tory majority when I spoke with you 2 months before the November election. You were spot on with your forecast months before the Covid-19 pandemic of what impact it would have on the global economy and I did not believe you ! You have been spot on with gold and commodity prices.

As you know, I tend to always look on the bright side of life and try and believe that disasters will be averted but this pandemic and the global economic partial paralysis is an event which I never thought I would experience in my lifetime and clearly will have disastrous economic ramifications for the medium term.

Retrospection can teach us all lessons but the accurate vision for the future is a rare talent.

Lord St. John Anthony - 22nd Baron St John of Bletso is a British peer, politician, businessman and solicitor

Quite often, those of us continuously trading in the markets tend to get lost in the noise and pay less attention to the major geopolitical issues that will shape the global economy for years to come. These geopolitical transformations are happening now. David is there to help you bring these issues into focus and help you think outside the box. We've had numerous in-depth discussions on how these transformations will impact not only our portfolios but our lives in general.

Antonino Fortes Senior Portfollio manager
Arkent Macro Q1 2024 Performance Review – The Rally of the Safe Havens
Arkent Macro Q4 2023 Performance Review – A Dampened Response To Escalation
Arkent Macro Q3 2023 Performance Review – Patience and Execution Discipline Pays Off
Arkent Macro Q2 Perfomance Review – A Quarter of Consolidation
Arkent Macro Q1 2023 Performance Review - A Quarter of Consolidation
Arkent Macro Q4 2022 Performance Review – Record Returns Once Again

Arkent Macro Q1 2024 Performance Review – The Rally of the Safe Havens

safe havens
Image
Bitcoin

The Crypto Complex, and especially Bitcoin, with its ever-increasing market value, provided the best alpha generation in Q1 2024, followed by the Crypto 10 Index. They rallied impulsively, as our market models predicted that they would. This particular Bitcoin trade captured a super tight low-risk entry point and then we ran the trend to near the highs, taking profits earlier than we should have done.

Q1 2023 PERFORMANCE REVIEW CONTENTS

We recommend that subscribers to our Macro CIO's View take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk on entry points, with extremely tight tactical stops, that are then actively managed as the trade moves in our favour.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our key 2024 year-ahead geopolitical calls
  4. Our main Q1 2024 geopolitical calls
  5. Q1 2024 market predictions and performance
  6. Alpha captures long-short fund performance.

 

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls have once more proven accurate during Q1 as they unfold slowly before our eyes. We predicted that:

  1. The second Russian offensive would see Putin apply increased pressure on Ukraine.
  2. Inflation would keep moving higher, driving Bond prices (and equities) lower.
  3. Both the war in Ukraine and Iran's war with Israel via Hamas, the Houthis and Hezbollah would escalate.
  4. Accelerating Inflation would push bonds lower in the early phase of a US debt crisis as spending increases, especially on defence.
  5. The banking crisis would see a third chapter as bond prices fell.

Global Trader covers six macro sectors, with some 80-plus markets, and has been producing exceptional alpha extraction since its inception in 2019. In summary, Q1 2024 could best be characterised by the rally of the safe havens: crypto and precious metals. Our capital preservation methodology has been a critical part of our risk performance, based on our ratchet risk-to-stop methodology (explained below).

  1. Our best performance has come from the broad sector across cryptocurrencies and precious metals as the safe havens rallied strongly.
  2. The worst performers were the Equity and FX sectors.

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift, as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years (plus) has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly to their portfolios. Similarly, we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 17 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines our geopolitical and market behavioural models.
  2. Our strategy of trading is to seek alignment with long-term trends and then to find short-term entry points that translate into long-term time frames. Producing tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 400%, which equates to 40 risk units at any one time. Trade recommendations can be either 100% or 200%. The 400% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, since Q2 2021, the conviction levels have been and continue to be very high due to the strong integrated signal strength associated with our price and geopolitical models.
  6. Ongoing trade management by following the progression of a trend. by lowering stops  where appropriate
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of History. All of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2023 GEOPOLITICAL PREDICTIONS

3.1 2023 – THE YEAR TO STAY UNDER COVER

Image
cover

Our main predictions for 2024 were outlined in 2024 – The Year To Stay Under Cover One of our core investment themes  was that 2024 would be;

The Year of Precious Metals
For those who subscribe to our Global Trader Product, we have been advocating the main financial survival strategy to be focused on Bitcoin and even more heavily weighted to precious metals and their associated mining stocks. We believe, this year, this strategy will prove to be the only game in town. Whilst bonds have fallen significantly and will only accelerate, precious metals have held their value, completed a major correction, and are now in only the foothills of a powerful once-in-56-years rally to new highs and beyond.

 

3.2 GEOPOLITICAL PREDICTIONS RELEVANT TO Q1 2024 

Image
predictions

As expected, the calm before the storm has been replaced by increasingly entropic war events, that have now manifested in Israel over Gaza. However, we view this as not an isolated event but one linked to the collapse of American hegemony, and part of an alarming global pattern of expected escalation into WW3.

One that ultimately involves China opening hostilities across the Asian basin, in the scenario we call Red Lightning. Thus we seem to be at the confluence of geopolitical and market events of a very significant magnitude, with an oil rally being the key market trigger. The specific areas that we highlighted for geopolitical risks in Q1 2024 were;

  1. The Ukraine counter-offensive would see Putin increase pressure on Ukraine as US support dried up and the war escalated into an ever more direct confrontation with NATO. This was correct and is unfolding.
  2. Inflation will keep moving higher, driving bond prices (and equities as Bonds accelerated) lower and the yield curves to steepen as energy and commodities surge due to wartime resource constriction. In addition, we expect wage and input inflation to continue to move higher. Notably, we expect that commodity input inflation in the coming wave 3 will start to once more feedback into top-line inflation. See Inflation Expectations Are Increasing As Predicted. We were encouraged in our prediction by Andrew Bailey. Who at the lows of the oil price boldly insisted that Inflation was about to fall 'markedly', even as he signalled the Bank of England would have to keep raising interest rates. The Governor said that tumbling energy prices and cheaper food would help to drive down inflation for the rest of this year. AB is our favourite inflation reverse indicator, and it is no coincidence that he called for lower inflation in 2024 = at the oil lows. Just when we were predicting that commodity prices had completed their correction and would commence their next surge higher!!! At which point, in contrast, we correctly predicted the next commodity surge into war had commenced with the energy/commodity sector, which had started one of its biggest rallies in 56 years, into an expected peak in 2030. A peak that is all about resource constriction and escalating global conflict. This was correct and is unfolding as shown in the plot below.
    Image
    core inflation
  3. The Israeli war with Hamas would escalate to a regional war with Iran, sending oil prices through the roof and catalysing Xi’s war. As outlined in The New Age of War; Chapter 2: Israel and the Middle East and Dimensions of American Decline 10: Biden, Afghanistan, Ukraine and Now Israel and The Iranian/Hamas Trap Is About To Spring Shut On Israel and AmericaThis was correct and is unfolding and putting pressure on oil prices.
  4. The Chinese demand gap would force Xi’s hand into war. In March 2020, Xi shifted his economy from a manufacturing export-driven nation into one that slowed its exports, collapsed its capitalist social camouflage, and stockpiled commodities on a massive scale as described in Red Peril 20; China's Increased Polarisation, Aggression and Bifurcation. The result is a demand gap that has seen the Chinese economy slow down significantly, compounded by numerous CCP economic decisions that do not make sense in peacetime – unless they represent a wholesale economic plan to prepare for a wartime economy that can survive total bifurcation from the West. This includes the lowering of US Bond holdings. The rapid borrowing by local governments has fostered an illusion of prosperity. However, China’s development model has been to issue a tremendous amount of loans to non-performing projects, particularly the housing industry, but now the housing market is collapsing, with dire consequences. The consequence is similar to that of the Nazi four-year plan instigated in March 1936, which meant that in preparing for war, the German economy would be bust by 1940, so had to use its military capability or implode. Xi is thus in the same position as Hitler was, where he either uses it or loses it. As we have regularly stated, dictators always warn what they are going to do, and liberal democracies always discount it as rhetoric, until they are attacked! In Xi's case his intentions are very clear, as we outlined in Red Peril 13 – Read My Lips: I Am Preparing China To Go To War. One only has to look at the recent changes to Chinese law, the economic strategy, and of course the military expansion, complete with the development and deployment of ballistic carrier-killing missiles and hypersonic missiles that can be deployed in massive waves to overcome all defenses, without warning. To cement the picture, the massive expansion of Chinese ICBM missile silos to 400 plus, is the last piece of the puzzle, designed to deter any American nuclear uses and close the avenue of Chinese military inferiority. This was a quarter early.
  5. Accelerating inflation would bring about a US debt crisis that would collapse the stock market and dollar. Which is also in line with our call for the collapse of the Doomsday Bubble. Conditions for this financial implosion are now accelerating for all to see as interest rates rise and bond issuance increases to the point of being unsustainable. In this regard, any dent in the perception that the US hegemony is collapsing, through failed military intervention, or escalating global conflict, will accelerate the cost of UK debt and accelerate this dangerous situation. In effect, America is now trapped in a declining empire's debt doom loop. This was correct and is unfolding.
  6. The banking crisis would see a third chapter. With the bond market collapse inevitable as inflation surges, alongside wartime debt issuance it is inevitable that this move will destroy the balance sheets of at least 50% of US banks (as they all hold 25% on long-dated bonds)  making them bankrupt an unprecedented banking crisis is unavoidable. Stocks to watch are SocGen, DB, and Fifth Third Bancorp. Watch out For The Next Leg Of The European  Banking Crisis and European Banks Ready For Next Lurch Lower. This is ongoing and will keep causing the yield curve to steepen even more severely. This has been the case, if not on slow burn as bank stocks started to weaken just at the end of Q3. This was a quarter early.

In summary, we saw a clear market response to a significant escalation in Iran’s war on Israel 5; The Battle for the Sinai Sea Lanes in the rally of the safe havens.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

Over the quarter we followed our game plan, based on our predictions that:

  1. That the safe havens of Bitcoin and gold and silver would rally strongly.
  2. Energy prices would increase significantly, with oil targeting the $130.00 highs and ultimately $200-$250.
  3. Commodities – food and base metals would also increase significantly, as explained in The Next Commodity Surge Has Commenced (blog post) and The Next Commodity Surge Into War Has Commenced (Arkent Scenario).
  4. Inflation would increase significantly due to increased input prices, feeding into an accelerating wage cycle. Based on the previous K-wave cycle peak in 1975, US CPI could considerably exceed 16%.
  5. Interest rates would keep rising and the cost of borrowing/mortgages will become exorbitant, absorbing household spending power, and reducing consumer spending. Based on the previous K-wave cycle peak in 1975, US Fed funds could exceed 22%.
  6. Bonds would fall and not act as safe havens, driven by higher inflation and the massive bond issuance associated with the unfolding arms race/ wartime spending programs. The medium term (next three months) out to the end of 2023 continues to see a risk of a wave 2 rally of some 10 points before the fall commences that could ultimately lead to US debt default. The debt projections from the US Budget Office say it all! Indeed, it is interesting to note that our prediction back in 2007, as shown in the lower diagram, that US debt would skyrocket in this phase of US decline, was correct, as issuance now exceeds the WW2 peak. As oil rallied we recognised that there would not be a wave 2 and that The Bond Correction Looks to be Over as Oil Builds Momentum Higher and that yield curves would steepen dramatically.
  7. Equities would be the last to peak, supported by ever-accelerating money printing. But as bonds accelerate lower, they will take equities with them, especially the Russell 2000.

 

4.1 TOP 20 PERFORMING MARKETS OVER THE PAST 17 QUARTERS

Image
top 20

The top-performing macro sector was Crypto, and especially Bitcoin with an excess of 729 trading units, followed by Bunds (378 units) and Gold (310 units), with very solid performances in the commodities sectors including oil, copper and uranium. Making Q1 2024 an excellent quarter's perfomance.

 

4.2 WORST 10 PERFORMING MARKETS OVER THE 17 QUARTERS

Image
bottom 10

The worst-performing markets were Gilts (in contrast to Bunds), which continue to prove challenging to extract alpha from, the Eurodollar as the dollar corrected higher, and of course the NASDAQ as part of the equity complex that kept rising.

 

 

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

4.3.1 Equity Markets – Looking For the Trend Reversal

Image
equities

Equities were in a bull market and hence not a productive sector (with moderate losses for well placed short positions) for our bear view. With some exceptions like the Vix and HK 50. We are still looking for a major reversal.

 

4.3.2 FX Markets – The in Corrective Mode

Image
FX

The FX sector was very much in corrective mode, creating moderate losses to our short dollar positions. Notably, our NZD short did very well, even as stock market indexes continued to rally.

Image
NZD

 4.3.3 Crypto Markets Rallied

Image
Crypto

We had excellent results in this sector, especially with Bitcoin with two trades with tight entry points and trends higher, which allowed us to capture multiple returns on each trade.

 

4.3.4 Bond Markets – The Fall Commences

Image
bonds

Bonds started their year on the highs with the market bullish and long and we have been short ever since that point, correctly avoiding the first wave-two price correction and then resetting our shorts.

 

4.3.5 EM Markets – Zero Movement

Image
EM

The EM markets saw a very quiet quarter with zero notable alpha-generating opportunities.

 

3.3.6 Commodity Markets – Oil Leads The Way Higher

Image
Comodity

The energy sector with uranium and oil created solid returns. As did our core investment in precious metals and copper.

Image
Oil

Notably, our Carbon Emissions short did very well indeed, as that market sector imploded and the net-zero economy is slowly being replaced by wartime imperative.

Image
Carbon

Gold and  Silver rallied in a zero-movement dollar environment, implying that they are ahead of an escalation cycle of some kind.

Image
Gold

The agriculture sector produced small negative returns and has not yet caught up with oil.

 

 

5.0 ALPHA CAPTURE AND FUND PERFORMANCE

Image
Alpha capture

This was an incremental negative performance of 01.11% in a challenging quarter for our mining stocks, as they failed to follow the underlying gold and silver prices higher. Note our commodity fund was up 1.4% for the quarter.

Arkent Macro Q4 2023 Performance Review – A Dampened Response To Escalation

The Crypto Complex provided the best alpha generation in Q4, specifically Bitcoin and the Crypto 10 Index, as they rallied impulsively as part of our expected ultimate move to new highs. This particular trade captured a great tight low-risk entry point and then rand the trend to near the highs with a 17x return-to-risk profile.

Q1 2023 PERFORMANCE REVIEW CONTENTS

We recommend that subscribers to our Macro CIO's View take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk on entry with extremely tight tactical stops, that are then actively managed as the trade moves in our favour.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our key 2023 year-ahead geopolitical calls
  4. Our main Q4 2023 geopolitical calls
  5. Q4 2023 market predictions and performance
  6. Alpha captures long-short fund performance.

 

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls have once more proven accurate during Q3;

  1. The Ukraine counter-offensive would see Putin under increased pressure
  2. Inflation would keep moving higher, driving Bond prices (and equities) lower 
  3. The Israeli War with Hamas will escalate 
  4. Accelerating Inflation would bring a US debt Crisis ever closer
  5. The Banking Crisis would see a third chapter

Global Trader covers seven macro sectors, with some 80-plus markets, and has been producing some exceptional alpha extraction since its inception in 2019.In summary, Q4 2023 could best be characterised as another period of low volatility consolidation and correction. Our capital preservation methodology has been a critical part of our risk performance, based on our ratchet risk-to-stop methodology (explained below).

  1. Our best performance has come from the broad sector across cryptocurrencies the dollar and precious metals
  2. The Worst performers were the Equity and bond sectors

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift, as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years (plus) has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly to their portfolios. Similarly, we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 16 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines our geopolitical and market behavioural models.
  2. Our strategy of trading is to seek alignment with long-term trends and then to find short-term entry points that translate into long-term time frames. Producing tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 200%, which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6%, 100%, 133%, 166% or 200%. The 200% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, since Q2 2021, the conviction levels have been and continue to be very high due to the strong integrated signal strength associated with our price and geopolitical models.
  6. Ongoing trade management by following the progression of a trend. by lowering stops  where appropriate
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of History. All of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2023 GEOPOLITICAL PREDICTIONS

3.1 2023 – THE YEAR TO TAKE COVER

Our main predictions for 2023 were outlined in a series of posts published in early January called The Year To Take Cover (as below). They have all been quietly building momentum, much like the forces of plate tectonics before releasing their energy in an earthquake. In May we described the period of Q1/Q2 as that of the Phoney Calm, as the geopolitical pressure builds like plate tectonics before releasing even as volatility fell in the markets.

Part 1 - Hegemonic Challenge Continues to Increase Global Entropy
Part 2 - Why We Named 2023 The Year to Take Cover
Part 3 - WW3; The Challenge to America's Hegemony and the Bifurcation of the World
Part 4 - Inflation Will Keep Rising
Part 5 - The Collapse of the Doomsday Bubble
Part 6 - Global Political Changes

 

3.2 GEOPOLITICAL PREDICTIONS  FOR  Q3 

As expected, the calm before the storm has been replaced by increasingly entropic war events, that have now manifested in Israel with Hamas' barbaric act of war. However, this is not an isolated event but one linked to the collapse of American hegemony, part of a global pattern of expected escalation into WW3.

One that ultimately involves China opening hostilities across the Asian basin, in the scenario we call Red Lightning. Thus we seem to be at the confluence of geopolitical and market events of a very significant magnitude, with an oil rally being the key market trigger. The specific areas that we highlighted for geopolitical risks in Q4 2023 are;

  1. The Ukraine counter-offensive would see Putin under increased pressure. Both through the potential threat of the re-capture of Bakhmut and the renewal of the counteroffensive on the southern front once more/new NATO equipment arrives including F16s. This was a quarter early.
  2. Inflation will keep moving higher, driving bond prices (and equities) lower and the yield curves to steepen as energy and commodities surge due to wartime resource constriction. In addition, we expect wage and input inflation to continue to move higher. Notably, we expect that commodity input inflation in the coming wave 3 will start to once more feedback into top-line inflation. See Inflation Expectations Are Increasing As Predicted. We were encouraged in our prediction by Andrew Bailey. Who at the lows of the oil price boldly insisted that Inflation was about to fall 'markedly', even as he signalled the Bank of England would have to keep raising interest rates. The Governor said that tumbling energy prices and cheaper food would help to drive down inflation for the rest of this year. AB is our favourite inflation reverse indicator, and it is no coincidence that he called for lower inflation this year at the oil lows. Just when we were predicting that commodity prices had completed their correction and would commence their next surge higher!!! At which point, in contrast, we correctly predicted the next commodity surge into war had commenced with the energy/commodity sector, which had started one of its biggest rallies in 56 years, into an expected peak in 2025-27. A peak that is all about resource constriction and escalating global conflict. This was a quarter early.
  3. The Israeli war with Hamas would escalate to a regional war with Iran, sending oil prices through the roof and catalysing Xi’s war. As outlined in The New Age of War; Chapter 2: Israel and the Middle East and Dimensions of American Decline 10: Biden, Afghanistan, Ukraine and Now Israel and The Iranian/Hamas Trap Is About To Spring Shut On Israel and America. This was spot on in the real world but did not translate into market moves, as we expected, as the Biden administration did all it could to dampen the hard reality of a full-on regional war with Iran. A situation that could not last for long!
  4. The Chinese demand gap would force Xi’s hand into war. In March 2020, Xi shifted his economy from a manufacturing export-driven nation into one that slowed its exports, collapsed its capitalist social camouflage, and stockpiled commodities on a massive scale as described in Red Peril 20; China's Increased Polarisation, Aggression and Bifurcation. The result is a demand gap that has seen the Chinese economy slow down significantly, compounded by numerous CCP economic decisions that do not make sense in peacetime – unless they represent a wholesale economic plan to prepare for a wartime economy that can survive total bifurcation from the West. This includes the lowering of US Bond holdings. The rapid borrowing by local governments has fostered an illusion of prosperity. However, China’s development model has been to issue a tremendous amount of loans to non-performing projects, particularly the housing industry, but now the housing market is collapsing, with dire consequences. The consequence is similar to that of the Nazi four-year plan instigated in March 1936, which meant that in preparing for war, the German economy would be bust by 1940, so had to use its military capability or implode. Xi is thus in the same position as Hitler was, where he either uses it or loses it. As we have regularly stated, dictators always warn what they are going to do, and liberal democracies always discount it as rhetoric, until they are attacked! In Xi's case his intentions are very clear, as we outlined in Red Peril 13 – Read My Lips: I Am Preparing China To Go To War. One only has to look at the recent changes to Chinese law, the economic strategy, and of course the military expansion, complete with the development and deployment of ballistic carrier-killing missiles and hypersonic missiles that can be deployed in massive waves to overcome all defenses, without warning. To cement the picture, the massive expansion of Chinese ICBM missile silos is the last piece of the puzzle, designed to deter any American nuclear uses and close the avenue of Chinese military inferiority. This was a quarter early.
  5. Accelerating inflation would bring about a US debt crisis that would collapse the stock market and dollar. Which is also in line with our call for the collapse of the Doomsday Bubble. Conditions for this financial implosion are now accelerating for all to see as interest rates rise and bond issuance increases to the point of being unsustainable. In this regard, any dent in the perception that the US hegemony is collapsing, through failed military intervention, or escalating global conflict, will accelerate the cost of UK debt and accelerate this dangerous situation. In effect, America is now trapped in a declining empire's debt doom loop. This was a quarter early.
  6. The banking crisis would see a third chapter. With the bond market collapse inevitable as inflation surges, alongside wartime debt issuance it is inevitable that this move will destroy the balance sheets of at least 50% of US banks (as they all hold 25% on long-dated bonds)  making them bankrupt an unprecedented banking crisis is unavoidable. Stocks to watch are SocGen, DB, and Fifth Third Bancorp. Watch out For The Next Leg Of The European  Banking Crisis and European Banks Ready For Next Lurch Lower. This is ongoing and will keep causing the yield curve to steepen even more severely. This has been the case, if not on slow burn as bank stocks started to weaken just at the end of Q3. This was a quarter early.

In summary, we saw a dampened market response to a significant escalation in Iran’s war on Israel 5; The Battle for the Sinai Sea Lanes that did not translate into markets in Q4 2023, but which we expect will do so in Q1 2024.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

Over the quarter we followed our game plan;

  1. Energy prices would increase significantly, with oil targeting the $130.00 highs and ultimately $200-$250.
  2. Commodities – food and base metals would also increase significantly, as explained in The Next Commodity Surge Has Commenced (blog post) and The Next Commodity Surge Into War Has Commenced (Arkent Scenario).
  3. Inflation would increase significantly due to increased input prices, feeding into an accelerating wage cycle. Based on the previous K-wave cycle peak in 1975, US CPI could considerably exceed 16%.
  4. Interest rates will keep rising and the cost of borrowing/mortgages will become exorbitant, absorbing household spending power, and reducing consumer spending. Based on the previous K-wave cycle peak in 1975, US Fed funds could exceed 22%.
  5. Bonds would fall and not act as safe havens, driven by higher inflation and the massive bond issuance associated with the unfolding arms race/ wartime spending programs. The medium term (next three months) out to the end of 2023 continues to see a risk of a wave 2 rally of some 10 points before the fall commences that could ultimately lead to US debt default. The debt projections from the US Budget Office say it all! Indeed, it is interesting to note that our prediction back in 2007, as shown in the lower diagram, that US debt would skyrocket in this phase of US decline, was correct, as issuance now exceeds the WW2 peak. As oil rallied we recognised that there would not be a wave 2 and that The Bond Correction Looks to be Over as Oil Builds Momentum Higher and that yield curves would steepen dramatically.

 

4.1 TOP 20 PERFORMING MARKETS OVER THE PAST 39 MONTHS

The top performing macro sector was Crypto, with an excess of 662 trading units, with very solid performances in precious metals and the Dollar's fall.

 

4.2 WORST 10 PERFORMING MARKETS OVER THE PAST 39 MONTHS

The worst-performing sectors were equities and bonds, which both gave back running profits from Q3 trades. Individually Gilts had another tough quarter and oil for the first time gave back running profits. Meanwhile, the new products of US 30s and US 2s had a tough start, as did nickel, which looks to have been based but at a much lower level than we expected. Notably, wheat started a rally out of the table!

 

 

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

4.3.1 Equity Markets – The Next Bear Decline Unfolds

Equities were our best market sector in Q3 but among the worst in Q4 as equity markets rallied. Except the weakest US index in the form of the Russell 2000, and the China A50, which continue to provide positive returns.

The FX sector was highly productive with a widespread capture of Dollar weakness, with Dollar Swiss being the best performer, generating 353 trade units.

 

 

 4.3.3 Crypto Markets Coiling For A Rally

We had excellent results in the Crypto 10 index, with a tight entry point with the Bitcoin trade, as shown below. 

4.3.4 Bond Markets – The Next Phase of The Fall Commences

We spent most of the quarter being short and watching our profits from Q3 erode in a bounce that we discussed the potential of in Bonds Over Extended Or Accelerating Lower. The balance of judgment was that we expected the escalation in the battle of the Sinai Sea Ways to push up oil and inflation. But instead, the news from the Gulf's slow Houthi escalation was not enough to reverse the bond rally.

 

4.3.5 EM Markets – Zero Movement

The EM markets saw a very quiet quarter with zero notable alpha-generating opportunities.

 

3.3.6 Commodity Markets – Oil Leads The Way Higher

The Energy sub-sector fell back to the lows, eroding our Q3 profits.

However, Silver and Gold fell as the dollar rallied, lifting our Gold and Silver longs. Notably Gold outperformed Silver.

 

The agriculture sector produced mixed returns, with wheat being the best performer.

 

5.0 Alpha Capture and Fund Performance

This was an incremental positive performance of 0.5% in a challenging quarter, when by the end of October we were up 6% but then gave back the profits. Note our commodity fund was up 1.4%.

Arkent Macro Q3 2023 Performance Review – Patience and Execution Discipline Pays Off

Updates

The equity indices provided the best alpha in Q3. After a period of large-degree correction in the equity markets in Q1/Q2, we caught the high of the wave 2 correction and ensured that we were short with very tight stops from that high. Running the positions as the market fell in a coiling sawtooth decline, which suggests that October will see significant declines. Our best performers were the Eurostoxx 50 and SP 500.

Q1 2023 PERFORMANCE REVIEW CONTENTS

We recommend that subscribers to our Macro CIO's View take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk on entry with extremely tight tactical stops, that are then actively managed as the trade moves in our favour.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our key 2023 year-ahead geopolitical calls
  4. Our main Q3 2023 geopolitical calls
  5. Q3 2023 market predictions and performance
  6. Alpha capture long-short fund performance.

 

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls have once more proven accurate during Q3;

  1. The dynamics of the inflationary surge, whose correction ended with that of oil's correction.
  2. The course of the battle for Ukraine.
  3. The accelerating risk of bifurcation and war with China.
  4.  The continued exposure of the banking sector and risk of further collapses.

Global Trader covers seven macro sectors, with some 80-plus markets, and has been producing some exceptional alpha extraction since its inception in 2019.

In summary, Q3 2023 could best be characterised as a period of consolidation and correction that in the later part of the quarter gave way to movement and alpha generation. Our capital preservation methodology has been a critical part of our risk performance, based on our ratchet risk-to-stop methodology (explained below).

  • Our best performance has come from the broad sector across equity indices, bonds and energy commodities, and to a lesser extent for some cryptocurrencies.
  • Our precious metals trade in gold has had a rare negative return this quarter.
  • FX as the dollar rallied in a correction caused broad losses.
  • EM has continued to provide incremental returns for our Rand short against Sterling and the Dollar.

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

 

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift, as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years (plus) has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly to their portfolios. Similarly, we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

 

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 16 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines our geopolitical and market behavioural models.
  2. Our strategy of trading is to seek alignment with long-term trends and then to find short-term entry points that translate into long-term time frames. Producing tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 200%, which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6%, 100%, 133%, 166% or 200%. The 200% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, since Q2 2021, the conviction levels have been and continue to be very high due to the strong integrated signal strength associated with our price and geopolitical models.
  6. Ongoing trade management by following the progression of a trend. by lowering stops  where appropriate
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of History. All of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2023 GEOPOLITICAL PREDICTIONS

3.1 2023 – THE YEAR TO TAKE COVER

 

Our main predictions for 2023 were outlined in a series of posts published in early January called The Year To Take Cover (as below). They have all been quietly building momentum, much like the forces of plate tectonics before releasing their energy in an earthquake. In May we described the period of Q1/Q2 as that of the Phoney Calm, as the geopolitical pressure builds like plate tectonics before releasing even as volatility fell in the markets.

Part 1 - Hegemonic Challenge Continues to Increase Global Entropy
Part 2 - Why We Named 2023 The Year to Take Cover
Part 3 - WW3; The Challenge to America's Hegemony and the Bifurcation of the World
Part 4 - Inflation Will Keep Rising
Part 5 - The Collapse of the Doomsday Bubble
Part 6 - Global Political Changes

 

3.2 GEOPOLITICAL PREDICTIONS  FOR  Q3 

We argued that during Q3 we would see  the calm before the storm, be replaced by significant market movement as the confluence of geopolitical and market events accelerated into events of a very significant magnitude with an oil rally being the key market trigger The specific areas that we highlighted for the Q3 2023 were;

  1. The Ukraine counter-offensive will see Putin under increased pressure. Both through the potential threat of the re-capture of Bakhmut and the renewal of the counteroffensive on the southern front once more SAMs and cluster bombs arrive, along with the NATO-lite security guarantee to Ukraine, with the promise of NATO membership once Russia has been expelled. Putin’s response will be to increase his nuclear and subsea threats, and there is always the continued threat that China will cross the dual-use aid red line. This has been the case, if only a slow burn.
  2. Inflation will keep moving higher, and the US correction due to the fall of commodity prices in the wave 2 is now over. Indeed we expect wage and input inflation to continue to move higher. Notably, we expect that commodity input inflation in the coming wave 3 will start to once more feed back into top-line inflation. See Inflation Expectations Are Increasing As Predicted. We were encouraged in our prediction by Andrew Baily insisting Inflation is about to fall 'markedly', even as he signalled the Bank of England would have to keep raising interest rates. The Governor said that tumbling energy prices and cheaper food would help to drive down inflation for the rest of this year. AB is our favourite inflation reverse indicator, and it is no coincidence that as he calls for lower inflation this year we are predicting commodity prices are about to commence their next surge higher!!! This has been the case.
  3. That the next commodity surge into war has commenced (15/07/2023) with the commodity sector now at the start of one of its biggest rallies in 56 years, with an expected peak in 2025-27, as recently explained in Arkent Scenario July – Increased Volatility Ahead: Commodities, after the completion of their wave 2 over the past 14 months, are now moving off their lows, in what we expect to be the commencement of the wave 3. Notably Copper/Nickel/Wheat/Natural Gas have been leading the way, but others in the complex now seem to be following, such as WTI. We note that China is constricting two rare earth metals, consistent with the beginning of wave 3, which is all about resource constriction and escalating conflict. This has been the case with respect to the oil rally moving from $65 to $95
  4. The Chinese Demand Gap will Force Xi’s Hand. In March 2020, Xi shifted his economy from a manufacturing export-driven nation into one that slowed its exports, collapsed its capitalist social camouflage, and stockpiled commodities on a massive scale as described in Red Peril 20; China's Increased Polarisation, Aggression and Bifurcation. The result being a demand gap that has seen the Chinese economy slow down significantly, compounded by numerous CCP economic decisions that do not make sense in peacetime – unless they represent a wholesale economic plan to prepare for a wartime economy that can survive total bifurcation from the West. This includes the lowering of US Bond holdings. The rapid borrowing by local governments has fostered an illusion of prosperity. However, China’s development model has been to issue a tremendous amount of loans to non-performing projects, particularly the housing industry, but now the housing market is collapsing, with dire consequences. The consequence is similar to that of the Nazi four-year plan instigated in March 1936, which meant that in preparing for war, the German economy would be bust by 1940, so had to use its military capability or implode. Xi is thus in the same position as Hitler was, where he either uses it or loses it. As we have regularly stated, dictators always warn what they are going to do, and liberal democracies always discount it as rhetoric, until they are attacked! In Xi's case his intentions are very clear, as we outlined in Red Peril 13 – Read My Lips: I Am Preparing China To Go To War. One only has to look at the recent changes to Chinese law, the economic strategy, and of course the military expansion, complete with the development and deployment of ballistic carrier-killing missiles and hypersonic missiles that can be deployed in massive waves to overcome all defences, without warning. To cement the picture, the massive expansion of Chinese ICBM missile silos is the last piece of the puzzle, designed to deter any American nuclear uses and close the avenue of Chinese military inferiority. This scenario continues to unfold.
  5. The Banking Crisis will see a third chapter. Stocks to watch are Soc GEN, DB and Fifth Third Bancorp. Watch out For The Next Leg Of The European  Banking Crisis and European Banks Ready For Next Lurch Lower. This is ongoing and will keep causing the yield curve to steepen even more severely This has been the case if not on slow burn as bank stocks started to weaken just at the end of Q3.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

Over the quarter we followed our game plan set out in July – Increased Volatility Ahead and August – August – When Will the Phony Calm End?

  1. Energy prices will increase significantly, with oil targeting the $130.00 highs and ultimately $200-$250.
  2. Commodities – food and base metals will also increase significantly, as explained in The Next Commodity Surge Has Commenced (blog post) and The Next Commodity Surge Into War Has Commenced (Arkent Scenario).
  3. Inflation will increase significantly due to increased input prices, feeding into an accelerating wage cycle. Based on the previous K-wave cycle peak in 1975, US CPI could considerably exceed 16%.
  4. Interest rates will keep rising and the cost of borrowing/mortgages will become exorbitant, absorbing household spending power, and reducing consumer spending. Based on the previous K-wave cycle peak in 1975, US Fed funds could exceed 22%.
  5. Specifically Bonds will fall and not act as safe havens, but rather will fall, driven by higher inflation and the massive bond issuance associated with the unfolding arms race/ wartime spending programs. The medium term (next three months) out to the end of 2023 continues to see a risk of a wave 2 rally of some 10 points, before the fall commences that could ultimately lead to US debt default. The debt projections from the US Budget Office say it all! Indeed, it is interesting to note that our prediction back in 2007, as shown in the lower diagram, that US debt would skyrocket in this phase of US decline, was correct, as issuance now exceeds the WW2 peak. As oil rallied we recognised that there would not be a wave 2 and that The Bond Correction Looks to be Over as Oil Builds Momentum Higher and that yield curves would steepen dramatically.

 

4.1 TOP 20 PERFORMING MARKETS OVER PAST 39 MONTHS

The top performing markets sector was Equities and commodities, with solid performances in individual markets of BTPs and the crypto 10 index.

 

4.2 WORST 10 PERFORMING MARKETS OVER PAST 39 MONTHS

Our worst 10 performing markets have shown some consistent problem areas such as the Eurodollar, Nickel, Wheat, Dollar Krone and UK Gilts. We will be looking to modify our approach in these sectors to improve performance. Especially in Nickel, Gilts, Euro Dollar and Dollar Krone

 

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

 

4.3.1 Equity Markets – The Next Bear Decline Unfolds

This was our best market sector in Q3, with broad positive returns across the whole sector, as we managed to put our most recent short positions on with tight stops close to the July Peak of the wave 2 corrections. The Eurostoxx 50 and SP500 indexes were the best performers. The weakest index has been and continues to be the R2000, which is now poised to lead the US Equity complex in dramatic decline.

 

4.3.2 FX Markets: A Nasty Correction

We maintained a dollar bearish stance all quarter, and suffered from the correction over the second part of the quarter that completed the wave 2 at the start of October. The dollar index shows an irregular correction that is complete so that Q4 should be very negative for the Dollar.

 4.3.3 Crypto Markets Coiling For A Rally

We had excellent results in the Crypto 10 index with a tight entry point trade as shown below. Whilst the others have been in a long and hold mode.

 

 

 

4.3.4 Bond Markets – The Next Phase of The Fall Commences

We spent the first half of the quarter trading from the long side looking for a C wave pop higher. Using great entry points to go long, most of which then went 3x to 5x in the money before reversing lower. We broke even on that half of the month. Then with the poor price action accelerated as oil rallied, we changed our view that the next fall had commenced and ran short positions with BTPS being the standout alpha generator.

4.3.5 EM Markets – Zero Movement

The EM markets saw a very quiet quarter with zero notable alpha-generating opportunities.

3.3.6 Commodity Markets – Oil Leads The Way Higher

The Energy sub-sector rallied as we predicted with oil and uranium being stand-out returns. Starting the quarter on their lows and ending on their highs.

However, Silver and Gold fell as the dollar rallied, hitting our Gold longs more than Silver, which had a tighter stop, which enabled us to miss most of the drop and reacquire our longs at the lows.

The agriculture sector produced mixed returns with corn and soya finally basing at the end of Q3.

 

5.0 Alpha Capture and Fund Performance

An incremental positive performance of 1.40% in a challenging quarter without clear direction, benefitting from long oil company and defence positions whilst losing on our gold and silver companies.

Arkent Macro Q2 Perfomance Review – A Quarter of Consolidation

risks

 

Q2 was one that did not present any significant alpha generation opportunities, in what was a relatively low volatility environment. Such environments can be very costly for alpha generators, who are effectively buyers of volatility. However, our ratchet risk methodology once more proved its worth in capital conservation. Within this context our best alpha-generating position for the quarter was Cable, with the trend higher driven by both a weaker dollar and a stronger pound, whilst sterling climbs a wall of worry supported by higher rates. We have been long Cable since the so-called Truss panic from 1.0680 and expect a test of 1.3350. A level that is the critical long-term trigger of a multi-year diagonal triangle that will see this pair reach 1.60 plus.

 

Q1 2023 PERFORMANCE REVIEW CONTENTS

We recommend that subscribers to our Macro CIO's View take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk with extremely tight tactical stops.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our key 2023 geopolitical calls
  4. Our main Q2 2023 geopolitical calls
  5. Q2 2023 market predictions and performance
  6. Alpha capture long short fund performance.

 

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls have once more proven on track. With respect to:

  1. The dynamics of the inflationary surge and its significant range of market, geopolitical and political impacts
  2. The course of the battle for Ukraine
  3. The accelerating risk that bifurcation with China will provide significant lethal aid to Russia has been taken to the edge with dual use provisions
  4. The continued exposure of the banking sector and risk of further collapses.

Global Trader, which covers seven macro sectors with some 80 plus markets, has been producing some exceptional alpha extraction since its inception. In summary, Q2 2023 could best be characterised as a period of consolidation and correction across the markets. Where capital preservation has been a critical part of our risk performance, based on our ratchet risk to stop methodology (explained below).

  • Our best performance has come from FX and Crypto currencies.
  • Our Precious Metals trades have had a rare but small negative return this quarter.
  • Equities have been mixed with positive returns in the eastern indices and in the UK, and negative returns in the US during this corrective period
  • Whilst bonds, after a massive phase of alpha generation in Q4 2022, gave back a relatively small amount compared to the previous gains by trading from the long side.
  • EM has continued to provide excellent returns for our Rand short against Sterling and the Dollar.

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift, as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years (plus) has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly into their portfolios. Similarly we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 15 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines geopolitical and market behavioural models.
  2. Our strategy of trading in alignment with long-term trends and then finding short-term entry points that translate into long-term time frames, which produce tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 200%, which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6%, 100%, 133%, 166% or 200%. The 200% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, in Q2 2021, the conviction levels were very high due to the high and integrated signal strength associated with our Phase 3 Road Map.
  6. Ongoing trade management following the progression of a trend.
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of History. All of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2023 GEOPOLITICAL PREDICTIONS

3.1 2023 – THE YEAR TO TAKE COVER

In May we described this period as that of the Phoney Calm, as the geopolitical pressure builds like plate tectonics before releasing even as volatility fell in the markets. Our main predictions for 2023 were outlined in a series of posts published in early January called The Year To Take Cover (as below). They have all been quietly building momentum, much like the forces of plate tectonics before releasing their energy in an earthquake.

Part 1 - Hegemonic Challenge Continues to Increase Global Entropy
Part 2 - Why We Named 2023 The Year to Take Cover
Part 3 - WW3; The Challenge to America's Hegemony and the Bifurcation of the World
Part 4 - Inflation Will Keep Rising
Part 5 - The Collapse of the Doomsday Bubble
Part 6 - Global Political Changes

3.2 GEOPOLITICAL PREDICTIONS  FOR  Q1 

We believe that the current period is the calm before the storm, so stay alert, as this confluence of geopolitical and market events could be bigger than any other in the last 200 years. The specific forces that we highlighted for the quarter were;

The Ukraine counter offensive would see Putin and his army under pressure as his nuclear and subsea threats increase in tempo; this has indeed been so with significant advances in Bakhmut, even though the southern front has stalled. Most of all this pressure created the conditions for The Battle For Ukraine 50; Prigozhin’s Putsch which saw a brief period of market volatility.

Inflation would go higher, we argued, as it had reached the limit of its pause (in the US only) and would only increase again as wage and input inflation move higher and the unfolding dollar decline increases import costs. Whilst in Europe, where there was no such pause, we expect inflation to just keep rising. Notably we expect that commodity input inflation in the coming wave 3 could start to once more feed back into top line inflation. See Inflation Expectations Are Increasing As Predicted. This has been correct.

The Banking Crisis has not gone away, but is in pause mode and as such could be triggered at any time into a third damaging phase. Stocks to watch are Soc GEN, DB and Fifth Third BancorpWatch out For The Next Leg Of The European Banking Crisis. This is ongoing and causing the yield curve to steepen even more severely.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

 Q2 2023 with its suppressed volatility post the intervention over Credit-Swiss was test of capital conservation, whilst maintaining established trends in sectors like the dollar and precious metals.

 

4.1 TOP 20 PERFORMING MARKETS OVER PAST 39 MONTHS

The top performing markets of Bunds and T Notes only took a small knock, compared to their recent massive gains, and hence stayed well ahead at the top of the table. However silver gave up its 3rd top slot to Bitcoin, which has become a major performer, after steadily moving up the table with some very high quality patterns to base our long analysis on. However, the safe havens of gold and silver slipped a notch in their corrective price action. Whilst US Equities lost as the wave 2 correction ground higher driven by a narrow base of few AI and tech stocks. Meanwhile, the FT100 moved up the table as the index weakens in the US/EU equity complex. Which was only just behind the Russell 2000, our preferred short medium for the US market. Notably the dollar continued to fall and the dollar index and cable both performed well. Whilst our favourite EM trade, short the Rand, climbed three places with more solid returns.

 

4.2 WORST 10 PERFORMING MARKETS OVER PAST 39 MONTHS

Our poor performing markets showed a twitch in the cadavers, with the Eurodollar and especially carbon emissions all showing signs of life! Q2

 

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

 

4.3.1 Equity Markets – Enduring The Ongoing Wave 2 Correction

We remained with our short bias towards global stock markets. In the US our losses were small at the start of the quarter, before we went neutral as the wave 2 correction kept moving higher, with the exception of the Russell 2000 where its flat correction allowed us to remain short. In Europe in the Dax and Eurostoxx 50 we had small losses. But in the FTSE 100 we saw small gains. Similarly in Asia we made small gains.

 

 

4.3.2 FX Markets Solid Returns as the Dollar Continued to fall

We maintained a dollar bearish stance all quarter, with good gains in Cable, the Dollar index and Dollar Swiss, but with some market results worse than we would like, with losses in Dollar Yen and Dollar Krone. The later pair being linked to our bullish view on oil that was deferred all quarter.

 

 

 

4.3.3 Crypto Markets Make A Major Low

We commenced the quarter long this sector and were rewarded with solid gains across the sector, in what we believe to be a new bull market that targets signifiant new highs. i.e 100k in Bitcoin. Notably our recent crypto 10 index trade was made with a very tight risk reward entry so could be blockbuster trade going forward.

 

 

4.3.4 Bond Markets – The Correction continued

The rally in March 2023, which was in five waves, put the bond markets into a wave 2 corrective pattern, signalling a hold on long-term rates increases despite the bearishness. Since the spike linked to the Credit Swiss failure bonds have traded in the B wave for the whole of Q2. During which we have consistently traded from the long side. Returns were negligible losses of less that 20 trading units compared to the massive gains over previous quarters. However, in Gilts, which were super weak, and BtpS, where our analysis is less frequent, we made moderate losses, but still very small compared to previous gains.

 

4.3.5 EM Markets

The most notable alpha generators in this sector were the Dollar and Sterling Rand, which are our favourite EM currency to be short of in 2023.

 

3.3.6 Commodity Markets

 

Silver and gold fell from the end of March causing small losses, over a moderate corrective period.

 

Oil had a lovely surge higher at the start of the quarter but then fell back and continued basing in a relatively tight range. It is now set up to commence the next bull phase, but not before it it cost us dearly in the oil-related complex.

 

 

5.0 ALPHA CAPTURE FUND PERFORMANCE

Our two short positions in our portfolio hurt this quarter with banks rallying/correcting and precious metal companies declining whilst bench mark indices rallied.

Arkent Macro Q1 2023 Performance Review - A Quarter of Consolidation

silver

Our best alpha-generating positions for the quarter were long silver and short the dollar index. As shown in the blue box, the quarter in silver comprised of a move lower into early March and then a retracement of that fall, back to the highs. In effect a V price action, which was replicated across most of the macro sectors. However, by using our ratchet risk model, we were able to make more alpha on the way up than we lost on the way down. Which was a good endorsement of our risk methodology. But most importantly, in silver and the dollar, this risk management methodology has kept us in these core strategic trades and added to our alpha-generated war chest.

 

Q1 2023 PERFORMANCE REVIEW CONTENTS

We recommend that our subscribers take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk with extremely tight strategic stops.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our key 2023 geopolitical calls
  4. Our main Q1 2023 geopolitical calls
  5. Q1 23 market predictions and performance
  6. Alpha capture funds and their performance

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls have once more proven powerfully prescient. With respect to:

  1. The dynamics of the inflationary surge and its significant range of market, geopolitical and political impacts
  2. The course of the battle for Ukraine and its turning point at the end of July
  3. The accelerating risk that China will provide significant lethal aid to Russia, and launch the next phase of WW3
  4. The exposure of the banking sector.

Global Trader, which covers seven macro sectors with some 80 plus markets, has been producing some exceptional alpha extraction since its inception and especially in 2022. Thus Q1 2023 could best be characterised by a period of consolidation and correction across the markets. In the FX and precious metals sector, returns were net positive. Whilst in bonds, after a massive phase of alpha generation in Q4 2022, we gave back a relatively small amount compared to the previous gains.

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years (plus) has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly into their portfolios. Similarly we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 14 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines geopolitical and market behavioural models.
  2. Our strategy of trading in alignment with long-term trends and then finding short-term entry points that translate into long-term time frames, which produce tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 200%, which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6%, 100%, 133%, 166% or 200%. The 200% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, in Q2 2021, the conviction levels were very high due to the high and integrated signal strength associated with our Phase 3 Road Map.
  6. Ongoing trade management following the progression of a trend.
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of History. All of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2022 GEOPOLITICAL PREDICTIONS

3.1 2023 – THE YEAR TO TAKE COVER

Part 1 - Hegemonic Challenge Continues to Increase Global Entropy
Part 2 - Why We Named 2023 The Year to Take Cover
Part 3 - WW3; The Challenge to America's Hegemony and the Bifurcation of the World
Part 4 - Inflation Will Keep Rising
Part 5 - The Collapse of the Doomsday Bubble
Part 6 - Global Political Changes

These predictions are proving alarmingly accurate.

 

3.2 GEOPOLITICAL PREDICTIONS  FOR  Q1 

1. The Challenge to America's Hegemony and the Consequent Bifurcation Of The World – On Track

The end of globalisation and the resultant bifurcation of the world have been unfolding since the onset of Covid at the start of 2020. That process has seen Russia evicted from the Western trading sphere, and will see China similarly evicted by year end 2023 as a consequence of its military actions. The best outcome by 2024 will be a clearly delineated democratic trading sphere and autocratic trading sphere. The worst outcome, which is now almost certain, is that the world  will be locked into a decade-long global conflict.

One of the biggest geopolitical dynamics impacting Q1 2023 currently was described in The Battle for Ukraine 28; NATO Led By the UK, Seeks to Finally Allow Ukraine to Win the War. Furthermore, we were correct in highlighting that NATO's total commitment to support Ukraine and the provision of armoured vehicles would place Russian forces in a no-win situation. Forcing them to slug it out in an attritional war that Putin is losing, assaulting defensive positions at a 5-to-1 casualty ratio, whilst waiting for the hammer blow to fall when the Ukraine spring offensive strikes. Implying that Russia is set to suffer a major military defeat in the first half of 2023. In response, we expected during Q1 that Putin would inevitably seek to cut off his oil and gas supply, risking a 2023 energy shock reminiscent of 1973. Whilst correct about the course of the battle on the ground, we were wrong on the timing re an energy squeeze in Q1, but expect this to unfold in Q2/3 2023.

 

Russia's pending collapse on the battlefield is a position that Xi and the PLAN understands well, along with the brutal realisation that if China does not intervene now, Putin will be humiliated. The attendant consequences would represent a major setback to Xi’s global ambitions for domination. Despite this clear road to an escalation of WW3, There is Collective Western Denial That WW3 Has Started. However, the reality is that Chinese Lethal Aid to Russia is Now Inevitable whilst The Red Peril Is Growing Stronger. As such, the terrifying prediction that the West is on the road to war with China is more than on track for 2023, as is shown in The Battle For Ukraine 35 – Lessons From the Roads to Previous World Wars. The danger now is that China, anytime going forward, starts sending huge amounts of lethal aid to Russia, sanctions follow that quickly match those imposed on Russia, and the world will have bifurcated. Over the course of Q1 as we predicted, China's position with respect to the provision of support and lethal aid has become very clear, and is now inevitable, with all its consequences of sanction and bifurcation.

We continue to believe that the chances of China executing a V2.0 Pearl Harbor pre-emptive strike should be considered very significant, from the point where they provide lethal aid to Russia. Especially if the collapse of the Doomsday Bubble accelerates in connection with more bank implosions. Of historic note, Hitler took advantage of France’s gold crisis to invade the Rhineland in March 1936. Xi's March speeches confirmed our worst fears that we are on a course for this outcome as outlined in Red Peril – Read My Lips: I Am Preparing China To Go To War.

 

2. Inflation Will Keep Rising On Track (Especially in the UK and EU)

Expect commodity prices, and inflation, to continue to rise, as war supply constriction takes hold. With high inflation and asset collapses, we expect the ongoing acceleration of stagflation.

The expected Brace For The Next Phase Of Putin’s Energy War did not materialise, for three reasons. The first was a mild winter in Europe. The second was driven by the US's measures to release strategic oil reserves and the constriction of Russia’s ability to sell its products. The third and last is the contraction of demand as the global economy shrinks under the twin constrictions of inflation and higher rates. 

Meanwhile, our K-wave cycle suggests that the inflation reality is totally the opposite to that perceived by the Central Banks. One in which inflation has completed a wave-2 pause and will, due to an exogenous shock from the energy sector, or constriction of Chinese supply lines, drive inflation rapidly higher against all expectations. 

In contrast most market participants now believe that the inflation phenomenon is only temporary and that we are seeing a decline of demand-led inflation that will become permanent and end the rate-rise sequence. This collective belief, is primarily driven by hope, and is so prevalent that Sunak has even staked his career on inflation falling by 50% in the year ahead.

However, both our long-term K-wave cycle count and inflation expectations suggest that this small fall in US CPI is but the end of a correction within an ongoing trend of higher/much higher inflation. Indeed, in the UK and EU core inflation has kept rising.

3. The Collapse of the Doomsday Bubble – Wealth Destruction on an Epic Scale

The great age of Western wealth destruction started at the end of 2021, with the peak of the Doomsday Bubble in US equities, but no one really noticed at the time! Western government money-printing programmes have been stopped in their tracks by rampant inflation, exposing the reality that real growth in the Western economies was all but non-existent. It was made only possible by the massive leverage, i.e. 0.1% real growth leveraged 40 times equals an apparent 4% per annum. This implosion of wealth will take place as a nightmare pincer movement unfolds in front of our eyes: high inflation and asset price collapses. The uber-wealthy will lose most, if not all, of what they made in the past two decades if they continue with their same investment strategies. Whilst the rest of society will be plunged into financial poverty. Consequent social unrest and political change will be widespread and inevitable. So, tough times ahead. Think post-1929, on steroids!

The behaviour of the US and EU stock markets continues to reflect a bear market even with the Q1 corrective price action, which is currently viewed as a wave 2. As we outlined in our Long/Short Strategies November 2022 we have been short the banking sector, and late Q1 we saw the reality of our expectations reach the public domain and share re-pricing. Our view was;

We were bearish on banks in this inflationary rate-rising scenario, as their linear leadership is unlikely to anticipate the highly volatile market shifts ahead as inflation accelerates, whilst large loans and credit books are akin to being peppered with landmines in their asset and liability books. Our current shorts are in Lloyds, Barclays, Bank Of America, Bancorp, Citi, Goldmans and JPM. Our view on the banking sector going forward is outlined in SVB Heralds A New Banking Crisis. Evidence based on the price pattern of the banks is that the banking crisis has much further to go, coupled with the reality that the ALM losses are still on the books.

Notably the extreme civil unrest in France, and the waves of strikes in the UK, are consistent with our predictions, and we expect to see this trend intensify.

 

4.0 The Hegemonic Dollar Collapse 

Based on the dollar index, the high of 115.00 in 2022 and the subsequent reversal suggests that the surge of dollar repatriation to support margin calls in equities and bonds is over and the dollar decline is now unfolding. This should accelerate in 2023. The krone should be an excellent safe haven (when oil moves to its wave-3 rally mode), and going forward, we expect sterling and Swiss to appreciate against the majority of the FX pairs and especially against the dollar, which seems to have completed its bull surge (see below). In our view, sterling remains one of the few long-term safe-haven currencies, which we expect to reach 1.60 and 2.00 in the years ahead. Meanwhile the collapse of the dollar is the perfect environment for the crypto sector to rally to record new highs. The dollar bear remained in place over Q1 2023.

5.0  The Year of Precious Metals

For those that subscribe to our Global Trader product, we have been advocating the main financial survival strategy to be focused on precious metals and their mining stocks. We believe, this year, this strategy will prove to be the only game in town. Whilst bonds and equities ultimately fall significantly, precious metals will hold their value, and having completed a major two year correction, are now ready for a powerful rally to new highs. Precious metals ended the quarter on their highs ready to break upwards.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

Over Q1 2023 we saw a considerable worsening of both the geopolitical and financial terrain. However, manifested in the markets as a V period on price action with most markets moving one way for January and February and then back again in March, in what looks to be a period of consolidation before the main trending move unfolds in Q2 2023. Notably the first two months were dominated by the inflationary meme, and the last month by the bank crisis meme that implied an economic slowdown. The reality is that both are in play simultaneously and we expect to see future oscillations between the two memes.

 

4.1 TOP 20 PERFORMING MARKETS OVER PAST 39 MONTHS

The top performing Bunds and T Notes only took a small knock, compared to their recent gains, and hence  stayed well ahead at the top of the table. However, the safe havens of gold, silver and Bitcoin moved up the table, whilst our core US and EU equity indexes took an unpleasant hit during the wave 2 equity correction. However, notably the broader Russell 2000 (and FTSE 250) made solid gains that allowed it to move up in the table. Meanwhile the crypto sector remains well represented in the table with Bitcoin at number four.

 

4.2 WORST 10 PERFORMING MARKETS OVER PAST 39 MONTHS

The Eurodollar remained at the top of the worst 10 table, despite a small gain in Q1. One that was much smaller than the dollar index, again demonstrating that alpha generation continues to be better in the later medium. London oil was a new market, in which our initial participation fell foul of our incorrect view that oil would rally. Aluminium and nickel have eluded us so far. Sterling Euro is a good pair to monitor the strategic difference between the UK and EU, but its price patterns are volatile compared to the distance travels when it finally moves, not making it a good alpha generation medium. Euro yen is less preferred to sterling yen and the FTSE mining trade is still in play.

 

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

4.3.1 Equity Markets – Enduring The Ongoing Wave 2 Correction

We remained short through the whole of the quarter, not anticipating the extent of the wave-2 bounce. The Eurostoxx 50 had a major correction, the magnitude of which we did not see coming and which did the most damage of any market in the quarter. Similarly, to a lesser degree, we suffered a nasty correction in the NASDAQ, Fang and SP500, but no losses in the DJI and small gains in the Russell 2000. Meanwhile the FTSE 100 was our best-performing short as we managed to set our current short with a very tight stop right at the highs and have been running it since then. In the meantime the Asian markets all made marginally small positive alpha gains.

4.3.2 FX Markets Solid Returns as the Dollar Corrected

We maintained a dollar bearish stance all quarter, taking profit in the wave 1 early in the quarter and then resetting our shorts on the early March highs with relatively tight stops that then yielded good alpha returns. The dollar index was the best alpha performer with cable in second place. However, our worst performer was the dollar krone, as we hunted a bullish oil currency trade that, as oil kept falling, did not materialise in Q1.

 

 

4.3.3 Crypto Markets Make A Major Low

We started the quarter short, looking for a marginal new low, and lowered the stops to lock in some profit on the last stage short positions. Then as the markets reversed we reversed our positions on a key level break and traded from the long side as the market moved higher, in what we believe to be a new bull market that targets new highs. i.e 100k in Bitcoin.

 

4.3.4 Bond Markets – SUndergo A Reversal

We started the quarter running our short positions, and annoyingly missed the reversal point low in the first day of the new year, so endured a deep correction higher before prices fell back to new marginal lows in early March. At which point the banking crisis hit and the bond market started to rally in what we believe to be the wave 2 that will correct the wave 1 falls seen since the all-time highs. Hence on the first significant three wave downwards correction (B wave) we covered all our shorts and went long.The below Bund chart shows the rally since March, which has considerable upside.

4.3.5 EM Markets

The two notable alpha generators came from the Brazil 60, which continues to show ongoing weakness, and Dollar rand, which is our favourite EM currency to be short of in 2023.

3.3.6 Commodity Markets

Silver and gold fell into the start of March, and then bounced sharply to make new highs on the quarter.

Oil continued falling to the base of the 4th wave and then reversed, commencing the next bull phase, but not before it it cost us dearly in the oil-related complex.

Copper rallied nicely and then spent most of the quarter giving back 60% of its gains

5.0 ALPHA CAPTURE FUND PERFORMANCE

All our long-short alpha equity funds performed exceptionally well in Q1 – the long-short was in the top 10%, of 221 contributors. It is an un-leveraged 200 million nominal long-short fund. We made our money in three sectors; long gold and silver stocks, short tech stocks (for Jan and Feb) and short banks stocks, which paid well in the banking crisis.

Arkent Macro Q4 2022 Performance Review – Record Returns Once Again

Bunds

German Bunds have for the second quarter in a row, been our top alpha generating market. We have effectively traded a giant price range. First by catching a major bear fall and covering at the lows in early October. Then reversing at the lows to go long, capturing the movements within the zig-zag correction. Then finally in early December repositioning at the high of the correction to go max short and capturing the next big fall into year-end and new lows. A performance that within our 35-year trading track record stands out as exceptional.

Q4 2022 PERFORMANCE REVIEW CONTENTS

We recommend that our subscribers take the time to read this analysis of our performance to enhance their understanding of how we consistently extract alpha from the markets, whilst minimising our downside risk with extremely tight strategic stops.

  1. Executive summary; Global Forecaster and Global Trader
  2. Trade recommendation and risk methodology
  3. Our Key 2022 geopolitical calls
  4. Our main Q4 2022 geopolitical calls
  5. Q4 market predictions and performance
  6. Alpha capture funds and their performance

1.0 EXECUTIVE SUMMARY

Our Global Forecaster geopolitical and market calls, have once more proven powerfully prescient. With respect to;

  1. The dynamics of the inflationary surge and its significant range of market, geopolitical and political impacts
  2. The path of UK politics with the demise of Johnson and rise and fall of Truss
  3. The course of the battle for Ukraine and its turning point at the end of July
  4. The downward path of equities, bonds and crypto currencies and the rally of precious metals. Note that we predicted that there would not be a Santa Claus rally, but that the very opposite would occur.

Global Trader, which covers seven macro sectors with some 80 plus markets; has in Q1, Q2 and Q3 of 2022 produced exceptional and record alpha extraction. So we are pleased to report that Q4, continued to produce exceptional alpha extraction, as shown in the tables below. The highest returns came from the bond markets, initially by being short and then reversing our position to being long, then short and then long in the correction, and finally going short at the top of the correction. We then ran our maximum-size short positions into new lows at the end of the quarter. In equities we maintained our maximum short positions through the quarter's squeeze and into the lows at quarter end. Similarly, we maintained our shorts across the crypto sector and in EM equities and EM currencies. In precious metals we successfully captured the first rally off the multi-month corrective lows. In the commodity sector we traded from the long side as the wave 2 based, a decline which had been driven by demand contraction. Our desire to go long was to be portioned for the anticipated supply-side constriction as the war in Ukraine escalated.

 

2.0 TRADE RECOMMENDATIONS AND RISK METHODOLOGY

2.1 GLOBAL TRADER – DESIGNED FOR RISK-TAKERS

Global Forecaster was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters. During that year, there were obvious indicators that global markets were soon to peak (in February 2020) and collapse, with the most grievous consequences. We have called this transition The Great Shift as it is driven by the intersection of the peak of the K-wave cycle and the hegemonic challenge of China to America and the West.

We continually seek to quantify the accuracy of our trade recommendations as they translate into real-time market positions that are readily actionable by risk managers. We are pleased to report that the system we have used over the past three years has produced a very accurate representation of our market calls, in the direction, size and magnitude of the move. This has allowed risk-takers to quickly assess the accuracy of our past predictions in any market or sector, as well as benefit from our trade recommendations.

The structure of our trade recommendations allows our clients to apply them directly into their portfolios. Similarly we go a stage further for some clients, by taking our trade recommendations and applying them to specific alpha-capture platforms with outstanding results. This service is available upon request.

2.2 GLOBAL TRADER METHODOLOGY AND STRATEGY

We now have 13 quarters of performance under our belt, and the results of our geopolitical predictions, market predictions and alpha-capture fund performances have been exceptional. We believe the key to high returns and long-term success is based on:

  1. Prescient market views generated within a systematic multi-timeframe and price modelling system, which combines geopolitical and market behavioural models.
  2. Our strategy of trading in alignment with long-term trends and then finding short-term entry points that translate into long-term time frames, which produce tight risk rewards on entry as well as high multiple-risk returns.
  3. Our tight risk rewards on entry may mean that sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and in the summary tables below.
  4. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  5. Appropriate position sizing – to remind you of our methodology behind each trade recommendation; each real-time idea has a risk unit, defined from the entry point to the stop level, and a trade idea in one market can have a maximum of 200%, which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6%, 100%, 133%, 166% or 200%. The 200% limit in a market can be put on all at once or in combinations of sub-trades. High-conviction trades require the time frames of short, medium and long to all be aligned. Notably, in Q2 2021, the conviction levels were very high due to the high and integrated signal strength associated with our Phase 3 Road Map.
  6. Ongoing trade management following the progression of a trend.
  7. Successful trade exit points that ideally replicate the dynamics of point 2 above, by precisely picking the end of the trend.

These key points describe Global Trader's risk methodology. By reading the below quarterly performance appraisal, you will have a better idea of how we apply our risk-allocation methodology, as well as how we combine geopolitical predictions using various models from Breaking The Code Of HistoryAll of these real-time predictions have been published on the Global Forecaster website and are available to our clients.

 

3.0 OUR MAIN 2022 GEOPOLITICAL PREDICTIONS

3.1 2022 – THE NIGHTMARE ‘DON’T LOOK UP’ YEAR

We predicted from the outset that 2022 would be a tumultuous, year as the K-wave crisis took hold, impacting through wars, inflation, energy and food security challenges, with growing political unrest. All of which have come to pass and never have our geopolitical predictive models been more in tune with the unfolding reality and entropic shocks.

Our advice at the start of 2022 was to position short equity bond and crypto trades early, which we managed to do in all the crypto currencies, and main the equity indices (1% from the Thanksgiving highs) and bonds. We then advised to run the positions as prices cascaded lower and accelerated. We have been running those positions since then, lowering stops as applicable, whilst trading the other macro sectors from both the long and short sides.

For those who have not seen the recent film Don’t Look Up, we recommend you do so even now, as rarely has a film so captured a society's mental state of total delusion and denial. If it was a comedy that came out of the blue then it would be very amusing; however, it’s not a comedy, but a representative satire of America’s collective psychology and culture today, which is in total denial of the risks inherent in the country's decline. Instead, the leaders and population prefer to occupy themselves with insignificant issues hoping that denial will solve the inescapable existential problems. However, the evidence is that 2022 will be the year to look up, as the threats to America impact all at once. We forecast that 2022 would be a tumultuous year for everyone, but especially for asset managers and market participants. This has proven correct and we believe that worse is yet to come in 2023 which could be 2022 squared!

 

3.2 GEOPOLITICAL PREDICTIONS THAT HAVE COME TRUE in 2022

  1. The COVID Pandemic Is Over. Our prediction at the onset of the pandemic was that it would last for 18–24 months (from March 2020) until a vaccine was applied globally en masse, or herd immunity was reached. Calling the end of the COVID pandemic was the only good news that we could offer in 2022. As we predicted in our Murrinations Insight on 4th December, Omicron – Darkest Before The Dawn, we believed that this was the fourth attenuated wave of the pandemic, the one that inoculates populations without significant deaths and serious illness and thus ends the pandemic. So far, the evidence strongly supports our hypothesis. The Lockdown Brigades across all the Western nations will, in time, be judged as having over-responded to the Omicron threat and will suffer the political consequences. (Also read: The Failures of Lockdowns and Boris Johnson) This has proven correct.
     
  2. The Doomsday Stock Market Bubble Will Collapse. The evidence is that the biggest bubble in the history of the Western Christian Super Empire made its Thanksgiving highs in November 2021 and is now in the process of building momentum to the downside. It will collapse catastrophically this year, creating a reduction in asset prices of between 50% and 60% (more details are given below in the Market Risks section). This will coincide with a US dollar fall and a US debt crisis that will spread to the EU. As prices fall and the super Doomsday Bubble switches from feeding the American population with dopamine to feeding it cortisol, America will move into a threat-sensitive psychological state, that will, in all probability, come too late to deter outside aggression from Russia and China. Western politicians will consequently face a wave of unpopularity. This collapse is well and truly on track (40% down) and our greatest alpha extraction has been in the stock markets and bonds, strongly supporting our thesis. Initial predictions have proven correct with the worst equity market performance in 14 years. However, we believe that there is much worse to come.
     
  3. Inflation Will Remain High As Assets Fall, Creating Stagflation And Social Unrest. We expect that the increased supply chain constriction from China will only worsen and supply will at some point stop totally as hostilities build. This upward inflationary pressure will more than compensate for any demand collapse, driving inflation higher. We also expect the dam to break concerning the huge devaluation of the dollar through money printing, which will feed into inflation dynamics. Consequently, we could then see the post-collapse bottom of the Doomsday cycle accompanied by high inflation, making rampant stagflation a terrible reality. Inflation on this scale will no doubt translate to a cost-of-living crisis across the Western economies, causing widespread social unrest and political upheaval that strongly supports socialist and trade unionist policies. This prediction has been accurate and is still unfolding and driving markets and political change. 
     
  4. War In Ukraine Is A Certainty based on the K-wave cycle and the weakness of Biden's presidency. This rare and bold prediction was made many months in advance of the invasion and was spot-on, as has been our analysis of the military situation and the fundamental shift into a new age of war which has proven correct.
     
  5. The Judgement On The Lockdown Strategy Will Be Politically Damning. A prediction that we made at the start of the pandemic crisis, and stand by today, is that the lockdown strategy of Western governments will, in time, be viewed as a misguided response that equated to economic suicide. This is because lockdowns failed to balance the overall relatively low death rate of the majority of the older demographic versus the high magnitude of economic destruction. By focusing on the preservation of the older, less-productive population, governments have sacrificed the futures of the younger population. The failure by Western governments to respond holistically illuminates both the predominant linear thinking process and the influence of the madness of collective behaviour. Governments should have resisted this with clear strategic leadership, and those that did not will suffer the consequences (also read: The Failures of Lockdowns and Boris Johnson). The collapse of the Doomsday bubble will, in future, bring about clear recognition as to how recklessly the Lockdown Brigade handled economies, by pushing them into collapse. This has proven correct.
     
  6. Johnson Will Be Removed By His Party. – This has proven correct.
     
  7. The Year Of Precious Metals. If you choose one horse to ride in 2022, we recommend our precious metals strategy. For those that subscribe to our Global Trader product, we have been advocating the main financial survival strategy to be focused in precious metals and their mining stocks. We believe, this year, this strategy will prove to be the only game in town. The strongest rate of price rise in precious metals will be coincident with the dollar decline. In time, we expect that, as the prices rise, there will at some stage be insufficient gold to deliver into ETF and futures structures, placing a massive premium on physical metals and mining stocks. In a year when bonds and equities have fallen precious metals have held their value and completed a base from which they now ready to rally.
     
  8. The Year The Dollar Will Dive. This will be the year the dollar collapses and will be seen as the point when America finally lost its hegemonic and reserve status, much as the pound did in the year of the Suez crisis. We are targeting 30–40% lower on the dollar against the major currencies over the next three years. The dollar rallied for the first half of the year, but has put in a major high from which a precipitous fall is expected to unfold.

 

3.3 PREDICTIONS STILL TO UNFOLD IN 2023

  1. The Invasion Of Taiwan Is Highly Probable – The Invasion of Taiwan is a very high-risk event that could take place at any time going forward, as we believe that Xi will be much more aggressive than the timelines that are generally talked about in the West. Notably, the signals from Beijing are increasingly aggressive and bellicose, potentially creating at best a 4th Taiwan Straits crisis and at worst an invasion. This was partially correct with a practice blockage in Q2, but we fear this crisis is ongoing in 2023.
     
  2. The Iranian Bid For Nuclear Weapons – this is ongoing in 2023.
     
  3. Biden Will Not Survive 2022 In-Office – this is ongoing in 2023.

 

3.4 GEOPOLITICAL PREDICTIONS IN Q4 2022

  1. The War Against Russia: WW3 Will Continue to Escalate. Our warning that we would see the war in Ukraine escalate during Q4 2022 proved correct. History will, we believe, reveal that 60 years to the week after the peak of the Cuban crisis, the world only narrowly avoided a similar crisis over Ukraine, as Western leaders finally realised that Putin was not bluffing and would, if cornered, use a tactical nuclear weapon. The consequence of these raised tensions was a far more aggressive and effective use of the language of nuclear deterrence by NATO, and a now raised threshold of the first Russian nuclear release. See The Battle for Ukraine 19 – Putin’s Nuclear Threats Slow Ukrainian Progress. This does not mean the world is now safe, but rather that we are experiencing a pause in nuclear tensions. Meanwhile, Ukraine’s speed of advance on the ground has been constrained by Putin's nuclear threats. See The Battle for Ukraine 20 – Boiling the Frog Slowly and Safely. Meanwhile, our prediction that Ukraine would reclaim Kherson before the onset of the severe winter came to pass. Looking forward, we expect the winter months to allow the Ukrainians to steadily continue to erode the territory occupied by the poorly equipped Russian forces, whose plight will be significantly worsened by poor winter clothing and equipment. The recapture of Crimea is very much on the cards, and well within Ukraine's capability. Consequently, we expect the pressure on Putin to keep increasing and NATO-Russian tensions to keep rising. This was correct.
     
  2. Inflation to Continue Rising and Bond and Equities will keep falling and social unrest will increase. We continue to predict that we have entered the age of super stagflation, especially in America, Europe and Japan. To understand the potential impact of the super-high inflation ahead, we suggest one studies Turkey's current economic predicament. See The K Wave Cost Of Living Crisis; Part 1; The K wave Context and The K Wave Cost Of Living Crisis; Part 2; The Three Inflationary Drivers. Despite the wave-2 retracements over the past six months in energy and commodities, inflation levels have been rising, as secondary effects drive the process of endemic inflation. To further exacerbate the inflation situation, we are now entering another phase when commodities will rally to massively new highs, as wave 3 unfolds in the weeks and months ahead and wartime supply constriction starts to take hold with a vengeance. Future expectations for inflation have now become widely optimistic i.e. that we are seeing a decline that will become permanent and end the rate-rise sequence. Both our long-term K-wave cycle count and inflation expectations suggest that this is an end of a pause/correction within an ongoing trend of higher/much higher inflation. One that will see both bonds and equities fall significantly. This was correct in terms of lower bonds and equities, whilst core CPI has been marginally lower in Q4 in the USA due to demand contraction. However, social unrest is rising, as seen with the strikes in the UK.
     
  3. The Fed and the Other Central Banks Have Lost Control. The Fed Put is now clearly dead, and any talk that they will pivot is just the wishful thinking of trapped bulls. We expect the Fed and other central banks to keep raising rates, which will drive bonds to keep falling and stock markets to accelerate in their decline, and at some point crack in a crash/dislocate. History will view this point as the end of the US financial empire. A point where the financial leverage that has kept the American Empire alive for two decades finally fails. Based on the evidence of the last K-wave cycle peak in 1975, we predict that central banks will end up driving 10-year rates to match CPIs in the US, UK, and many other Western nations, before any chance that the peak is close at hand. This is ongoing.
     
  4. The Collapse of the Doomsday Bubble is Ongoing. Despite the consistent talk of the Fed pivoting and a Santa Claus rally, the market ended up on its lows by year end. This was especially true for the Fang and NASDAQ, which are leading the bear market. Indeed, it is now 13 months since we precisely called the high of the Doomsday Bubble in the NASDAQ and all other US indices. The signals from the price behaviours since then are that the move lower is being led by the Fang index and NASDAQ, with the other indexes following suit. Only in the Fang are we anywhere close to a midpoint of the fall, so we expect the acceleration is still ahead of us and indeed not far away in the weeks and months to come. The acceleration and collapse of this Doomsday Bubble will be of such magnitude that it will cause an inevitable political earthquake. This is correct and ongoing.
     
  5. The Migration to Western Command-Based Wartime Economies. The collapse of the Doomsday Bubble, a bond implosion caused by super-high inflation, and an escalating path to WW3, are all signs that Western capitalism as we know it is over, for now. As such, we expect a migration to a command-led wartime-type economy, but more on that in the months to come. Ongoing with very few seeing the trend unfolding.
     
  6. Xi's Red Peril – Pearl Harbour V2.0 will be Unleashed Across Asia Without Warning. The Red Peril caused by Xi’s Total Power is now a very real danger to the world, paving the way for the next stage of WW3. Instead of a localised invasion of Taiwan, we should be braced for a war against America and its allies across the Pacific Basin. The opening Pearl Harbour 2-type attack could take place without warning, using the PLAN’s missile forces, at any time going forward. We have outlined in The Red Peril – and the Inevitability of Xi’s War why the risk of war is so great. See more about The 4th Taiwan Straits Crisis and War and the potential course of WW3 in the Pacific in an extended series of Lessons From The Falklands War Applied to Taiwan. Notably, the signals from Beijing are increasingly bellicose, in what is now the 4th Taiwan Straits crisis. However, unlike the Russian invasion of Ukraine that was proceeded by bellicose threats, we don't expect Xi to telegraph his plans beforehand, so in this case, silence is not golden. At some point, when China makes its move, we expect a coincident invasion of South Korea, and before that for North Korea to become very belligerent indeed. Note our trade recommendation of being short the Taiwan index has been hugely profitable. This is correct and ongoing. We have seen Beijing become increasingly bellicose, as has North Korea.
     
  7. The EU Economy is a Very Exposed Construct. The high inflation levels have now exposed the EU economic zone as a disaster area, engulfed by significant negative real growth. Consequently, the whole of the EU including Germany and France are now on a political cliff edge as a result of Putin's Gas Stranglehold Over Germany and the EU. A precarious situation that has been made worse by Germany in particular's energy dependence on Russia, which has now almost completely been cut off as we go into winter. The social upheaval in Sweden will in all probability be the first wave of a revolution that could in the months ahead spread across Europe and see its current political structures swept aside. This is ongoing.
     
  8. Italy is in Deep Trouble as Default Beckons. Italy is the most likely ignition point, along with Spain, for an EU debt crisis. The recent price correction looks to be complete so we are now in the next phase of the bond bear market, with political turmoil and a default event in the months ahead. Correct and ongoing, with the fall of BTPs showing how exposed Italy is to a debt crisis.
     
  9. The Sterling Safe-Haven Play. Going forward, we expect sterling to appreciate against the majority of the FX pairs and especially against the Dollar, which seems to have completed its bull surge. This was correct. In our view, sterling remains one of the few long-term safe-haven currencies, which we expect to reach 1.60 and 2.00 in the years ahead. This is ongoing. However, we expect the UK gilt markets to keep falling in line with other bond markets, and as such UK gilts will inevitably trigger another leveraged pension-fund crisis at slightly lower price levels. This is correct and ongoing.

 

4.0 MARKET PREDICTIONS AND ALPHA GENERATION

4.1 TOP 20 PERFORMING MARKETS OVER PAST 39 MONTHS

Q4 continued to produce exceptional overall alpha extraction, with the highest returns coming from the bond markets (Bunds, T-Notes and BTPs) which as a result are now in the top 4 of our 20 all-time best-performing markets. We were initially short in the major bond decline and then reversed our position to being long, then short and then long in the correction and finally going short at the top of the correction. We then ran our maximum size short positions into new lows at the end of the quarter.

In equities we maintained our maximum short positions through the quarter's squeeze and into the lows at quarter end. Similarly we maintained our shorts across the crypto sector and in EM equities and EM currencies. We captured the high in the dollar and extracted some great alpha from the first move in what we believe will be a major unfolding trend in 2023. Assuming the risk of correlation of equities-down and dollar-up is finally broken.

In precious metals we successful captured the first rally off the multi-month corrective lows, with silver being the best performer. In the commodity sector we initially traded from the long side as the wave 2 based, which was driven by demand contraction. Positioning ourselves for the anticipated supply side constriction, as the war in Ukraine escalated. Notably corn and soya produced some nice alpha returns.

4.2 WORST 10 PERFORMING MARKETS OVER PAST 39 MONTHS

The Euro Dollar is at the top of the bad-boy table, because it is a pair that we are wary of, being composed of two weak currencies in race to the bottom. Hence we have more success in the Dollar Index. Carbon emissions is one that we have just not been correct on, and Sterling Euro is a messy pattern that we think long term is going much lower, but it moves in an overlapping way. The base metals, with the exception of copper, have not been productive, whilst wheat is a recent addition with only few trades and the Vix is expected to lose money gradually and then suddenly make it as volatility increases.

4.3 SPECIFIC MACRO SECTOR PERFORMANCE

4.3.1 Equity Markets – Survived Another Correction

The NASDAQ in Q4 traded in the blue box, in a correction driven by more waves of optimism that burst and fell back to the lows. Notably growth stocks remained weak, whilst value stocks mounted a bigger correction/rotation and did not get back to their lows by Q4 end, and hence the losses.

One of our ongoing super-big calls in 2021/22 was on the NASDAQ, which were made at 15000, predicting the precise high at 16640. A high that was made just before the Thanksgiving holiday in 2021 and one that should stand for at least a decade, if not longer, ending what we call the Doomsday Bubble . This has proven spot-on and continues to be reflected in returns across the index spectrum from Asia to Europe to America. Q4 was dominated by an equity correction that saw the value stocks correct the most, like the DJI, SP500 and Eurostoxx 50 and hence the give back from Q322 (which was still small compared to the profits of the previous three quarters). Whilst the weakest growth indices remained marginally profitable. Our call that Santa Claus would not appear was correct and allowed us to remain short, and well set for the start of 2023.

 

4.3.2 FX Markets Solid Returns as the Dollar Turned

The Dollar Yen looks to have put in a major multi-year high and from here we expect to see major dollar weakness  unfold.

The Dollar NOK looks to have put in a major multi-year high. From which point we expect to see dollar weakness and NOK strength unfold. This is one of our preferred FX pairs, as if we are correct about oil rallying to new highs, it could be a supercharged move lower on a pair that embodies both the weakest and strongest currencies.

The Dollar Index looks to have put in a major multi-year high (best viewed on a weekly chart) and from here after a correction we expect to see both dollar weakness and sterling strength unfold.

After a period where the Dollar rallied for longer and higher than we expected, our perseverance paid off, as we captured the highs in the Dollar Index, Dollar Krone, Dollar Yen and the lows in Cable to make some great returns. After we see a wave 2 bounce linked to an equity fall in early Q122, we expect this trend to continue as the Dollar suffers a major collapse.

 

4.3.3 Crypto Markets Steady Returns Remaining Short

Bitcoin has been trading lower as expected in a final 5th wave of the C wave of a wave IV. Meaning that at some point it will start to rally to 100K once more!!

The decline in Cryptos continued as expected in Q4, and we expect more downside as equities accelerate their decline in Q122. Solid if not modest returns compared to other sectors! For now!

4.3.4 Bond Markets – Once More Knocked The Ball Out Of the Park

The above Bund market chart, shows the moves from which we extracted our highest ever alpha returns. Essentially from the down, the zig zag up and then the down to new lows. Entering trades at or near the tops and bottoms of the moves.

The above T Note chart shows the moves from which we extracted our significant alpha returns, which however were less than for the Bunds.

Q4 continued to produce exceptional overall bond (Bunds, T-Notes, Gilts  and BTPs) alpha extraction, with the highest returns coming from the Bund market which as a result are now in the top 4 of all our 80 marco markets. We were initially short for the major decline and then reversed our position to being long, then short and then long in the correction, and then finally went short at the top of the correction with three failed attempts before the big winner. We then ran our maximum size short positions into new lows at the end of the quarter. For those that would like to better understand how we achieved such a remarkable result in Bunds, making some 1749 trade points ,which is a 44X return on a 400% (40 unit trade recommendation), please see each trade recommendation in the table below. Note that it took three attempts to set the Bund short at the end of the correction in trades T50, T51 and T52, which then in T53 made 980 units. Each trade recommendation can be found at Financial Market  Analysis. Notably Bunds provide exceptionally tight entry points to stops and then big moves, which is our perfect market to trade.

4.3.5 EM Markets

With the equities in a bull correction in Q4, there were no surprises that EM produced slightly negative results. But we expect this to change in Q122.

 

3.3.6 Commodity Markets

Silver and Gold rallied as we expected, allowing us a nice alpha capture opportunity.

Oil was in the process of basing and hence we had only small returns as we looked to position for what should be a major rally ahead.

Copper rallied nicely as part of what we believe is supply constriction/war demand coming into play.

The sector is coming alive, as we anticipate it being a huge focus in 2023. Silver, Gold and Platinum all produced excellent results, as part of our long precious metals strategy. Oil was neutral as we looked for the bottom of the correction. With Copper and Soya putting in some solid returns.

4.0 ALPHA CAPTURE FUND PERFORMANCE

All our long-short alpha capture commodity and long-short equity funds performed exceptionally well in Q4 – the long-short was in the top 2%, of 216 contributors. It is an unleveraged 200 million nominal long-short fund. We made our money in Q422 long gold and oil stocks and short tech stocks.

Individual Macro Market Analysis & Forecasts

The CIOs Macro View

If you’re interested in David’s strategic market perspectives, then this is for you.

These strategy updates are titled The Macro View, formerly Arkent Macro Scenarios, named after the Ark and the severity of the next expected global economic downturn.

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In addition to David’s strategic market perspectives, titled The CIOs Macro View, this package will give you David’s invaluable real-time trade executions, including charts and market outlooks.

Choose at least one sector from Stocks, Crypto Currency, FX, Bonds, Emerging Markets or Commodities, and receive real-time updates and forecasts.

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You’ll receive real-time updates and forecasts as and when the markets changes, giving you predictions on when to make your move.

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A bespoke service that integrates every aspect of The Global Macro Package subscription with the risk-taking aspects of our client's portfolios through personnel discussion and interaction. This also includes objective support with respect to the harnessing of trading psychology to maximise profitability.  A useful tool to maximise returns when under pressure from losses, or indeed after having an excellent run of profitability.

 

 


Arkent Scenario; Heads Up Phase 3 is Accelerating

Above is the Vix Chart that is running on rails. Expect a major upwards move in Volatility next week. As the wave 3 accelerates

Although last week might have seemed relatively quiet I believe that it has set the scene for some very big weeks ahead as our Phase 3 scenario begins to move into reality. The five crises of American decline are all in play and any one of them can appear from nowhere. Most of all I believe that with the perception of the Fed PUT making investments an apparent dead cert, everyone is max long and only a few smart investors are boldly short. The longs are in my view the walking dead.Note the risks of a stock market crash decline are extremely high, as delusion andreality meet.

1. Bond Markets

Look set to break to the upside in price in Bunds and US T Notes. This will be a dash to negative yields from the current 0.7% to -0.3% as the reality of the US  economic collapse hits home. Note the bond market is much smarter than the equity market. Breaks only ½ appoint higher should see accelerations to the upside. However once yields have gone negative the next phase will be a sovereign debt crisis due to the hugh debt levels incurred by the response to the pandemic compounding the already high debt burdens. As reported in the Guardian today.

Britain’s public debt is larger than the size of the country’s economy for the first time since 1963, after the government borrowed a record £55bn in May.

The total level of debt has risen by £173bn over the last year to reach £1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis.

The UK joined Italy, the US and Japan in the club of nations with levels of borrowing higher than their national income as the latest Office for National Statisticsfigures showed the UK government borrowed £55.2bn in May, roughly nine times more than the same month last year and the highest monthly borrowing since comparable records began in 1993.

2.Gold and Silver

Look ready to break higher with Bonds. After a period of lateral corrections, I expect these two metals to truly surprise in the strength of their rally in the week ahead.

3.The Dollar.

Has been in a lateral correction, but I expect that the trend of the decline of the dollar will continue next week. Especially as the move to negative rates removes and Dollar carry advantage.

4.Emerging Markets

The MSCI along with other EM stock markets has been very correlated to the SP500 and similarly is ready to decline from current levels in the Phase 3 decline. What is fascinating is that the Dollar/Em currency pairs turned earlier than the stock markets complex by a week and have been coiling for a major upside break (EM currency weakness) to new highs.

5.Commodities

Have been behaving like equities with coincident timing and they two finished their wave 2s on Friday so should drop in the days to come.

6.Individual Equities.

We are keen on three sectors.

  1. Long gold and silver stocks as they are set to sore so max positions here.
  2. Short the banking sector will suffer very heavily with the negative rate move.
  3. Short oil stocks will have a powerful drop as oil falls once more to below break evens.

Of note is that Tesla looks to have made a high and reversed (we are short) and all the strong US stocks that drove the corrective rally are now reversing.

7.Equities.

Our scenario that OUR Phase 2 high was on 9/10 June looks stronger at this week's end.

Last week was in essence the wave 2 correction week, with a powerful rally that conformed to expectations of an irregular pattern  that got every bull in town hot and excited. The mantra I heard all week was, see I told you you could not fight the FED and ECBWhat fascinated me however was that no one seemed to realise that the price was lower than the major high of June 9/10th so why were they so bullish? Because wave 2s are all about giving the impression that the previous trend is intact, ie in this case the bull is in play. However Fridays drop is the start of wave 3 and whilst initially, the bulls will think they are right the impending falls below critical levels on the downside will begin to change this psychology. Expect a negative next week with price accelerating to the downside as it progresses. Note the risks of a crash decline are extremely high, as delusion andreality.

8.Special Feature last week's subtle patterns exposed.

As a special feature, I have included the subtly of the pattern differentiation between markets that helped me better predict the short term reversal points and rate the relative strengths of each market.

Macro Markets

This service is designed to provide long term and medium term investment outlooks in a range of markets including:

Equities

  • Fang Index
  • Nasdaq
  • S&P 500
  • Vix Volatility
  • Dow Jones Industrial
  • Russell 2000 Index
  • DAX
  • Euro Stoxx 50
  • Eurovix Volatility
  • FTSE 100
  • FTSE 250
  • FTSE 350 Travel
  • Italy 40
  • Spain 35
  • China A50
  • Hong Kong HS 50
  • Japan 225
  • Tawain Index
  • Other DM Indices

Crypto

  • Ether
  • Litecoin
  • Bitcoin ($)
  • Crypto 10 Index

FX

  • Dollar Index
  • Euro Krone
  • Euro Dollar
  • Euro Yen
  • Dollar Swiss
  • Dollar Yen
  • Dollar Yuan
  • Dollar Canada
  • Dollar Krone
  • Sterling (Cable)
  • Sterling Euro
  • Sterling Yen
  • Dollar NZD
  • AUD/USD
  • AUD/NZD
  • EM Currencies

Bonds

  • US 2 Year Note
  • Bonos
  • Bobl
  • US 10 Year Note
  • Bunds
  • UK Gilts
  • Italian BtB
  • EU
  • High Yield Credit

Emerging Markets

  • MSCI Index
  • South Africa 40
  • Brazil 60
  • India 50
  • Other EM Indices
  • Dollar/Mex
  • Dollar/Brazil
  • Dollar/Rand
  • Dollar Ruble
  • Dollar Turkish

Commodities

  • Gold
  • Silver
  • Platinum
  • Palladium
  • Carbon Emissions
  • Oil
  • Natural Gas
  • London Gas Oil
  • CRB
  • Copper
  • Iron Ore
  • Aluminium
  • Lead
  • Nickel
  • Uranium
  • Lumber
  • Corn
  • Soya Beans
  • Wheat

Those marked in bold are more frequently updated.

Sample Executions

Below one indices is shown from each of the six sectors covered. Click on an indices or use the arrows provided to view each slide.

Equities
Crypto
Bonds
Emerging Markets
Commodities

FTSE About to Accelerate to The Downside

Medium Term
Very Bearish

The FTSE has been trading in what to the unstrained eye looks like a sideways pattern. However it counts as a coil of 1,2s which is soon to accelerate to the downside. Thus sell a further 3x here at 6166 with a 6230 stop and move the stops on the 6x short sold at 6444, down to 6350 locking in a a 12x return.

FTSE

Bitcoin-Reversal Structure In Play-Do Not Be suckered In!

Medium Term
Very Bearish

 

BitcoinT7a4HBitcoin has been tracing out what we believe is a diagonal triangle that will reverse to the downside anytime soon, in a sharp break lower to 30,000.

T7a sell 100% here at 62730 with a 65800 stop

BitcoinT7aD

T Notes; Increasing Position To Max Short

Medium Term
Very Bearish

We are increasing our Short position to a max 200% short here, as evidence builds to support the next move being down in price.

T17b sell 100% here @ 134.44 with a 134.84 stop

T Notes 17b

Brazil 60 Ending Its Phase 2 Correction

Medium Term
Very Bearish

The Brazil 60 has now completed its phase 2 correction and will reverse and start a decline to below the March lows.

T2a Sell 6x here @ 98.9K with a 103.0K stop 

Brazil 60

Take Profit On Gold

Medium Term
Neutral

Gold looks to have completed a 5 wave rally from £1670 and should fall back to $1740 before the next phase of the rally.

take all profits here at $1782

Gold

Risk Allocation Rules

  1. Trade sizes are allocated on previous success and quality of the individual signals combined with signals from the bigger picture.
  2. The trade weighting model has evolved over the past quarters to hopefully give clients an improved measure of the perceived quality of opportunity associated with a trade recommendation. The essential principle is that each trade recommendation can have up to 10 risk unit on at any one time.100%=a 10 unit risk when translated into our performance stats.
    1. In Q4;2019 and Q1;2020 Trades were weighted with up to three risk units. Either 1x or 2x or 3x positions. In effect, a 1x position was a 33.3% weighting and  3x was a 100% weighting.
    2. In Q2;2020 Trades were weighted with up to nine risk units. Either 3x or 6x or 9x positions. In effect, a 3x position was a 33.3% weighting and  9x was a 100% weighting.
    3. In Q3;2020 Trades are migrating from the Q2;2020 structure (above) to one of the percentages. Thus In effect, a 3x position moves to a 33.3% weighting and a 9x moves to 100% weighting.
  3. Each unit is the same monetary amount from entry to stop, adjusted to size. The tighter the stop the bigger the trade size.
  4. Stops are moved as the trade progress and labelled stop 1, stop 2 and stop 3, etc.
  5. As our levels are set precisely we allow for errors in data and illiquidity. Thus stops have a discretionary add to survive through high or low tick outs.
    1. 0.5% a percent ticks in equity indexes and 2% on individual equities
    2. 40 ticks on ten year Bond trades.
    3. 0.5% on FX.
    4. 1.0% on Gold 2.5% cents on silver.
    5. 2.5% cents on all other commodities
  6. Each quarter-end there will be a performance summary  for my geopolitical calls and market calls and profitability concerning each market https://www.davidmurrin.co.uk/arkent-scenario-updates/arkent-q1-2020-performance-appraisal

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