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FINANCIAL MARKET ANALYSIS & Forecasts

Predicting Market Moves Before They Happen

Introduction
Sample Arkent Update
Markets & Sample Analysis
Quarterly Appraisals
Testimonials
FAQs
Pricing

Who is this for?

This service is for asset managers (Hedge Funds, Banks, institutional investors, and Family offices) with Medium and Long Term Time frames.

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 distinct types of market analysis:

Arkent Updates named after the Ark and severity of the next expected global economic downturn. 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.
Individual Market Analysis & Forecasts This service is designed to provide long term and medium-term investment outlooks and specific recommendations in a range of markets outlined below. Updates are sent out real time as and when the market moves require.

Do you offer different subscription options?

Yes. David offers two levels of subscription titled Arkent Strategist and FMI (Financial Market Investor), on a 3 or 12 month basis.

Arkent Strategist - gives you access to David's Murrinations blog and Arkent Updates.
FMI (Financial Market Investor)- gives you access to David's Murrinations blog, Arkent Updates and Individual Market Analysis.

How do I gain access to the analysis?

Once subscribed, as an Arkent Strategist or FMI (Financial Market Investor), 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's unique Financial Market Analysis gives you his insights, via his behavioural models, that help him predict financial and geopolitical events.

David's focus with this service is on Macro trends. De-risking against shocks and finding new trading opportunities and strategies to maximize investment returns

This Market Analysis Service is designed by a highly experienced market Risk-taker of over three decades. David’s history in managing macro capital and predicting market dislocations makes him an invaluable advisor to senior risk takers. His expertise and Financial Market Analysis are particularly relevant to the successful management and preservation of capital as the global financial system faces challenges of the order of 2008 in the years ahead. David credentials as a global forecaster are outlined here.

Click a chart to view a larger version.

Pattern Analysis In Markets

Global Forecaster uses pattern analysis templates based on Elliott wave counts to locate trading opportunities. These templates have been developed and applied to markets over the past three decades. Wave counts are in effect a language to describe market behaviour by producing a probability field of outcomes over a range of fractal degrees. In simple terms, this means identifying patterns over multiples time frames, to locate reversal points that then unfold into longer-term trends, providing multiple risk-return profiles.

David provides two distinct types of market analysis:

Arkent Updates - named after the Ark and severity of the next expected global economic downturn. 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.

Individual Market Analysis & Forecasts - this service is designed to provide long term and medium-term investment outlooks and specific recommendations in a range of markets outlined below. Updates are sent out real time as and when the market moves require.

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 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

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 - Global Fund Advisors

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

Arkent Scenario 2020 Q3 Performance Appraisal

Arkent Q2 2020 Performance Appraisal

Arkent Q1 2020 Performance Appraisal

Arkent Q4 2019 Performance Appraisal

Arkent Scenario 2020 Q3 Performance Appraisal

Sector and market of the Quarter. The above chart in gold shows both the capture of the rally and the capture of the correction. A similar profile was achieved in the dollar.

Contents of this Q3 Review

Introduction.
The main geopolitical calls.
The market predictions and performance.
Funds and their performance.

1.0 Global Forecaster Introduction

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

With one year of performance under my belt, the results in my geopolitical predictions, market predictions and fund performances have been very pleasing. My career as a principal risk taker in the hedge fund business has taught me that the key to high returns and long term success is based on:

Prescient market views generated with a systematic multi-time frame and price modelling system
Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
Appropriate position sizing.
Risk management in accordance with trends.
Successful trade exit points.

These five points describe my Global Forecaster methodology in a nutshell!

By reading the below quarterly performance appraisal you will have a better idea of how I apply my risk allocation methodology as well as how I combine geopolitical predictions using my various models from Breaking The Code of History. All of these real-time predictions have been published on the Global Forecaster site.I then go a stage further and apply these trades to different fund mandates. Track records are given below.

2.0 The Main Q3 Geopolitical Calls

Biden will win the election by a considerable margin. Contextually, this call was made back in January when Trump's re-election seemed inevitable and when no one was predicting Biden's victory. I based this call on the need of the American electorate for wealth distribution to keep them afloat. This view still stands.
Sino-Western polarisation accelerating swiftly as the effects of the pandemic worsen. Ultimately, China will be found guilty in Western courts and damages against the state will result in expropriations on Western soil. China will drive an accelerated arms race using its idle industrial capacity to build ships, missiles, planes, armoured vehicles and an amphibious capability. Faced with the overwhelming polarisation against China, President Xi could well choose the path of accelerated aggression. Taiwan is the most probable flashpoint. This is the biggest geopolitical shift of them all and it is unfolding at the rate I expected. My estimate is that 99% of all senior political and business leaders are underestimating this shift and its impact. Recent Murrinations give details of Xi’s future path for China as an internally fuelled consumer society that becomes fully militarised like Germany into 1939, which is effectively the road to war in 2025.
The delusional gap between economic reality and the stock market will close. The Phase 2 correction will end imminently and, following a sharp reversal sentiment, will swing to the other extreme during a six month decline of up to 80% from the February highs in European stock markets and only a slightly smaller fall in America. As the reality gap closes, the social mood of populations will become markedly darker and there will be increasing social unrest due to economic stress on the lower and middle classes. These classes will find a just cause to express their collective frustration and anger. Additionally, as the pressure builds there will be regime changes in countries with unstable economies (especially hydrocarbon economies).
There will be very significant asset price deflation well before inflation becomes noticeable in shares, commodities and the property market. Gold and silver will be a major store of value and will appreciate 200%+. Expect this to unfold in the autumn as unemployment numbers increase.
The Pandemic will continue for 18-24 months until a vaccine is found or herd immunity is reached. Herd immunity is being bolstered through T cell immunity which is not as of yet tested. I estimate that with T cell immunity the herd immunity levels are at least double the published figures. I am not confident that we will see an effective vaccine until next year.
1. There will be secondary and tertiary waves. We are currently in wave two.
2. Governments will have to become more effective at constraining the pandemic, locating new virulent strains and keeping the economy operating. This is happening in the East at present, but not in the West.
3. Testing (including for new strains) and tracking must be greatly enhanced.
4. Nations will effectively be operating a strategy of accelerated phased exposure to herd immunity.
5. A global response to the pandemic could and should be led by Britain. This will exclude China and possibly America (by its own choice).
6. There will be a powerful drive for greater personnel responsibility for health and wellbeing driven by government programmes. As smoking has died a social death, so too will obesity. We are seeing this now
7. There needs to be more focus on the inevitable mutations of the virus into a multi-strained simultaneous pandemic.
8. In Western societies there could be long term health benefits as populations are encouraged to take self-responsibility for their health.
The lock down strategy of Western governments will in time be viewed as a misguided response that equated to economic suicide. This is because lock down failed to balance the overall relatively low death rate of the majority versus the high magnitude of economic destruction. By focussing on the preservation of the older, less productive population, governments have sacrificed the future for the younger population. The failure by Western governments to respond holistically illuminates both the predominant left-brained thinking process and the influence of the madness of collective behaviour. Governments should have resisted this with clear strategic leadership.
There will be a sovereign debt crisis in Italy and/or Spain. The German Supreme Court will do all they can to resist the ECBs support of the Italian bond market. Bond yields will rise considerably by the years end. America will also be at risk to a sovereign bond crisis and ultimate restructuring. Bond yields will rise not due to economic recovery, but due to the risk of holding debt.
America's role as the global hegemony will continue to wane. Trump will not be elected again. New non-American alliances will evolve. The dollar will fall by 20-30% against the major currencies.
The EU will fracture from its current structure and devolve to national levels. This will be triggered in the later stages of Brexit. Moreover, Brexit will happen on terms that benefit the UK as the EU’s position weakens. The vacuum created by the shrinkage of American global influence and the accelerated Chinese coercion of other nations could provide Britain with a massive opportunity to strengthen its global links with the Commonwealth and establish a new global trading network. Britain will hold the upper hand in the Brexit negotiations. While a no-deal outcome is probable (as the economic environment worsens in the next six months) the EU will find they have the weaker hand and thus will yield to British demands at the last moment. Sterling will appreciate more than any other currency in the world during the next 6 months rising to Cable 1.60 plus and against the Euro to 0.65. Exporters, be warned and prepared.
There will be social unrest in Russia. Resultantly, there is a high probability that Putin will be displaced. Such an eventuality would provide the strategic opportunity to entice Russia back into the Western fold.

3.0 The Q3 Market Predictions

3.1 GF Methodology

I have been a macro asset manager for over 35 years. I know there is a big difference between having an idea and translating it into profit. My Arkent and Market Analysis Services are designed to do just that.

Over the past 12 months I have evolved my risk system into the one described below. The trade performance tables represent this standardised system.

To remind you of how it works, each 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 100% which equates to 10 risk units at any one time. Trade recommendations can be either 33.3%, 66.6% or 100%. The 100% limit in a market can be put on all at once or in combinations of 33% and 66% sub trades. For example, T12a, T12b and T12c would be three 33% trades in one market and for one idea. High conviction trades require the time frames of short, medium, and long to all be aligned. Notably, in 2020 Q3 the conviction levels were very high due to the high and integrated signal strength associated with my Phase 3 roadmap.

My trading strategy is to trade in alignment with long term directions and trends and then find short term entry points that translate into long term time frames that produce tight risk rewards on entry as well as high multiple risk returns. The tight risk rewards on entry may mean that an entry point needs to be attempted several times. A spreadsheet is available on request to explain all the trades which are displayed on the site and the summary tables below.

I then go a stage further, taking my trade recommendations and applying them to specific fund structures such as Top Macro, General Macro, Long Short and Commodity funds operated on behalf of clients. The history and performance of those funds is given below.

3.2 Top Performing Markets Over the Past 12 Months

As an example of how the Global Forecaster risk system works I have included a table of my top performing markets. Take the FTSE as an example where 763.2 risk units were generated over 12 months. This equates to a 76x return on a 100% trade of 10 units. In reality, as some of the units would have been 33% and 66% this will underestimate the return. Even so, 76x is a massive number. Even a 13x multiple represents a very significant return at the bottom of the table.

Another clear pattern that this table demonstrates that my predictive systems work in all the asset classes that I cover. This is conditional of course on directional movement which has a cyclicity of fallow periods and fertile periods. Key to this system is avoiding the fallow periods that eat up energy and capital with no return, focusing instead on the fertile periods in sectors. This is key to consistent overall portfolio generation.

3.3 General Appraisal of Q3 Performance

Most of my predictions have or are unfolding as expected in the Phase 3 market fall. As per my Arkent scenarios, the dollar is accelerating to the downside with gold and silver rallying. Whilst the weak stock markets like the FTSE and Spain (charts below) are already well off their weak rebound highs and coiling to fall, the US markets have reversed. Commodity markets are falling which signals a second demand slump in regard to oil.

3.3.1 Equity Markets

The Above Chart Shows the FTSE 100 and the quarters short trade locations.

My strategy of selling the weakest stock markets in preference to the strongest ones proved to be a successful trading adage this quarter. It also did in 2020 Q2 when the weakest markets dropped the furthest distance. In the strongest markets which were in the US, the returns were low to slightly negative. However, in Europe where I highlighted the weakest indices, this key determination combined with excellent entry points at the peak of Phase 2 have generated excellent returns.Going into Q4 I am max short on all the stock indices and expect a powerful decline.

3.3.2 FX Markets

The above chart shows the Dollar Index and the quarters trade locations.

My strategy of being short on the dollar from the start of the quarter has paid hansom dividends as I stayed in the trend to the September lows. Here, I covered shorts and then entered some small trading long-dollar positions and then reset the short positions at the high of the corrections with the expectation that the trend will resume in Q4. Notably, through this more pronounced European dollar correction I remained short in dollar yuan as the trend was so powerful. The cross AUD/NZD was introduced this quarter with some good results.

3.3.3 Bond markets

The above chart shows the Bunds and it's triangular structure with low volatility and very little trading opportunity.

These markets were trapped in their triangle and as such provided very little opportunity. However, the breakout in late Q3 should provide a powerful rally in Q4.

3.3.4 EM Markets

This is a new dedicated section this quarter, building on the successful EM FX analysis over the past 12 months and adding some major equity indices.Three of these have started to yield results and once more the weakest in SA has proven the best medium for shorts. Meanwhile, the EM FX section showed a moderate net positive. I expect all EM sections with short equities and local currencies to produce significant returns this quarter.

3.3.5 Commodities

Oil is shown above with is diagonal triangle and break lower. Gold is shown at the start of this appraisal.

This sector has been the best performing of the quarter, especially in gold and silver as I captured the rally, exited at the peak, went short a trading position and then reloaded at the lows expecting a rally in Q4. Oil was next in return productivity and despite requiring a number of short positions to locate a 100% short position, the final trade before the fall was at the highs with a tight risk return that produced an excellent profit and has much more to go in Q4.

4.0 Funds Performance

Global Forecaster operate four fund portfolios for clients by applying GF trade recommendations.

4.1 Long Short (Square point)

A long short fund of $200m with a max of 50 equity positions of $4m.

This fund has had an excellent quarter based on short oil and banking stocks as well as capturing the long gold and silver stock rally top to bottom, yet exiting at the highs to avoid the drop. Short tech stocks was added in September.

4.2 Commodity (Square Point)-A commodity Fund

There were few technical problems that prevented the capturing of the gold and sliver rally and the Oil drop, but none the less it was a marginally profitable quarter that should have been exceptional.

4.3 Top Macro (Client X)

A concentrated best of my macro ideas with zero leverage.

This has had an excellent four months. Its key positions have been:

Long gold and silver capturing the big rally and exiting at the highs.
Short silver for the corrective drop.
Long silver from the September lows.
Short WTI and brent from the highs.
Short FTSE and Eurostoxx from the highs.

4.4 General Macro (Client Y)

Contains 80% of all the trades generated from equity indices, FX, bonds and commodities.

I only commenced operation of this platform in September, but have quickly moved up to between 6th and 3rd out of 52 on the platform based on returns and sharp ratios. More to follow!

Arkent Q2 2020 Performance Appraisal

The above Chart is of one of my trades of the Quarter in Gold;The others were Silver, Bunds and best of All US T Notes.The Dollar Shorts were close seconds!

Global Forecaster Introduction

GF was set up in the summer of 2019 to inform and advise professional asset managers through troubled waters ahead. As the signs that global markets were soon to peak and collapse where obvious, with the most grievous consequences. I have called this transition The Great Shift, as it is driven by the hegemonic Challenge of China to America and The West.

My performance in Q3 2019 and Q12020 has exceeded any of my expectations. By reading the below quarterly performance appraisal you will have a better idea of my risk allocation methodology as well as how I combine geopolitical predictions using my various models from Breaking The Code of History, with complex market price models, all then integrated into a risk model. All of these real-time predictions have been published on the Global Forecaster Site.

The Main Geopolitical calls

Our main geopolitical calls during this quarter are listed below. Most have unfolded as expected or are in the process of doing so.

The Wuhan Pandemic Having predicted its arrival in early January, I stayed ahead of the curve during the whole of Q1 and Q2, predicting the effects Entropy Tsunami and impact on economies, politics, and the pandemics behaviour. The big question remains where did it come from and was it released intentionally?
Trump's One-Term Presidency: In January when the consensus was that Trump would be elected. I predicted that with the impending stock market fall and deteriorating economic conditions, Trump would lose to a Democrat. This is on track and will impact the market significantly
The collapse of the oil sector: late last year when oil was at $65, I called for the fall of the oil price to sub $27. I also predicted the end of US oil shale and a range of massive upheavals to hydrocarbon economies and associated Geopolitical shifts. This is still ongoing
The Battle at The heart of the UK government will be won by Boris. The left-brained encumbrancy as personified by Mark Sedwill would be swept aside by the right-brained Cummings revolution to change government and the direction of Britain which would be very positive for Sterling.-This is now unfolding and I expect sterling to benefit greatly.
The delusional gap between economic reality and the stock market will close. Although this has not taken place I expect it to do so before the end of the year. The Phase 2 correction will end and, following a sharp reversal sentiment, will swing to the other extreme during a six-month decline of up to 80% from the February highs in European stock markets and only a slightly smaller fall in America. As the reality gap closes, the social mood of populations will become markedly darker and there will be increasing social unrest due to economic stress on the lower and middle classes. These classes will find a just cause to express their collective frustration and anger. Additionally, as the pressure builds there will be regime changes in countries with unstable economies (especially hydrocarbon economies).
There will be very significant asset price deflation well before inflation becomes noticeable in shares, commodities, and the property market. Gold and silver will be a major store of value and will appreciate 200%+.
The lock down strategy of Western governments will in time be viewed as a misguided response that equated to economic suicide, failing to balance the overall relatively low death rate of the majority versus the high magnitude of economic destruction. By focussing on the preservation of the older, less productive population governments have sacrificed the future for the younger population. The failure by Western governments to respond holistically illuminates both the predominant left-brained thinking process and the influence of the madness of collective behaviour. Governments should have resisted this with clear strategic leadership.
Chinese-Western polarisation will accelerate swiftly, driven by both sides, as the effects of the pandemic worsen. Ultimately, China will be found guilty in Western courts and damages against the state will result in expropriations on Western soil. China will drive an accelerated arms race using its idle industrial capacity to build ships, missiles, planes, armoured vehicles and an amphibious capability. Faced with the overwhelming polarisation against China, President Xi could well choose the path of accelerated aggression. Taiwan is the most probable flashpoint. This will bifurcate the world into two trading spheres and limit the economic recovery significantly.
Brexit will happen. It will happen on terms that benefit the UK as the EU’s position weakens. The vacuum created by the shrinkage of American global influence and the accelerated Chinese coercion of other nations could provide Britain with a massive opportunity to strengthen its global links with the Commonwealth and establish a new global trading network. Britain will hold the upper hand in the Brexit negotiations and whilst a no-deal outcome is probable as the economic environment worsens in the next six months, the EU will find they have the weaker hand and thus will yield to British demands at the last moment. Sterling will appreciate more than any other currency in the world in the next 6 months rising to Cable 1.60 plus and against the Euro to 0.65. So exporters be warned and prepared.
America's role as the global hegemony will continue to wane. Trump will not be elected again. New non-American centric alliances will evolve. The Dollar will fall by 20% to 30% against the major currencies.

Overall Strategy and Summary

We started the quarter in April cutting our shorts and taking our profits on the trend break from phase 1 (the initial drop from February). We then correctly identified that we were in a phase 2 correction which was the corrective bounce driven by government action. However, I underestimated how much money would be unleashed. Once the equities markets had reached a 38% to 50% bounce we moved into our Phase 3 playbook, which turned out to be correct in the case of the Dollar and Bonds markets. But 8 weeks early in the case of equities until they made their June 9^th/10^th highs. Thus our main significant returns for the quarter were in short Dollar positions, gold and Silver and the Bond market, which although range-bound provided great trading opportunities. Equity markets and commodity proved tough with our bearish viewpoint, but constantly good trade locations and size allocations preserved large portions of the profits made in phase 1. Especially in what I describe as the weak equity indices, which confirmed our adage sell the weakest and buy the strongest. Meanwhile, commodity markets and especially oil, mirrored the equity trading pattern, but again the losses in the correction did not exceed 30% of the profits made in Q1 when we exited short positions from $62 on the day we saw negative oil. We ended Q3 in a full on Phase 3 mode, short equities commodities and the dollar ,long bonds and waiting for a dip in gold and silver to reload.

GF Methodology

I have been a macro asset manager for over 35 years and I know there is a big difference between having an idea and translating it into profit. My Arkent and Market Analysis Service are designed to do just that. Indeed, I am pleased to say I have achieved this objective during Q1 and Q2 by successfully building on the Brexit success of the last quarter. To remind you of how it works, each idea has a risk unit from the entry point to the stop level and a trade idea can have a maximum of 9x risk units in any one market at any one time. Trade recommendations from 6x to 9X have high conviction, and notably, in Q2 the conviction level was much higher than Q1 as we built confidence in our methodology. That means that in equity markets the give back in Q2 was in point terms, very low indeed from Q1 profitability which was achieved with smaller trade sizes.

My goal is to trade aligned with long term directions and trends and then find short term entry points that telescopes into long term time frames, producing tight risk rewards on entry and high multiple risk returns. The tight risk rewards on entry may mean that an entry point needs to be attempted several times.

A spreadsheet is available on request to explain all the trades which are displayed on the site and the summary tables below.

Best of Macro Portfolio

We have started managing a Marshal Wace Tops Macro Portfolio, and although we only started in the middle of June the first steps were encouraging with a 0.62% return. This portfolio is a representation of my strongest ideas from my universe of recommendations.

Equity Markets

Although 2/3rds of the quarter were spent with the wrong view, excellent trade locations and stop controls, coupled with more persistence and hard work than I would have liked, minimised the losses relative to Q2s gains. Notably in the weaker indices where we offer higher levels of trade management in the Eurostoxx 50 , and DJI the Quarter was profitable, whilst only marginal losses were seen in the FTSE (4.5% of Q1 profit) and SP500 (27%). For the past decade equities have had a bias in terms of time to go upwards, but the drops are very swift when they happen. Hence the return profile is very much like buying options.

Meanwhile our long Short Strategy had three key elements, Short The Oil sector and banks and long Gold and silver stock at critical phases, which rewarded us with a spectacular result on the Square point Platform with a 12.4% return on a notional 200m portfolio ranking 2^nd out of 203 competitors.

FX Markets

We have been bearish the Dollar since the start of the Q2 when the safe haven rush into dollars peaked and it has been one of the signs that Phase 3 is in play in some assets. Having entered dollar short positions at excellent locations in max size our preferred trades to be long against have been sterling the Index the CHF and the Yuan. Our risk-off trades in Dollar Canada and Dollar NZD have been wrong but in line with our give back in weak equity indices. Meanwhile, Bitcoin has produced solid returns. We expect an acceleration of the dollar bear trend in Q3. Our EM currencies are reviewed in the EM section below.

Bond Markets

Our bond recommendations have been consistently good this year as attested by the results. The US, German and UK bond markets have been range bound all of Q2, however we have traded all the cycles very well, especially in Bunds. On the basis that Bond Markets were smarter than equities, whilst equities in the US went into a blow-off high, bond yields were sending the signals that they were ready to decline. We ended the quarter with longs in Bunds, Gilts and our most successful are the T Notes as the latter had the most yield compression potential; On the opposite side of the coin we have been short on Italian BTPs looking for them to go into default and that position has made money and looks great for Q2. Overall, we are extremely pleased with our performance in this sector.

Emerging Markets

This is a new sector product, although we have developed a good track record in EM currency’s in this quarter. We missed the correction, and are now once more short of EM currency’s going into Q3. The equity section is only just getting going.

Commodities

Gold and Silver produced particularly good returns this quarter and we expect them to continue to do so this next quarter. Oil started well by ending its fall with a collapse which we used to cover all shorts at $7.5 and go long. However, we exited too early at just under $18 and have been short since. What has compounded the loss of 27 units compared to the Q1 gain of 88 units was the increase in trade size from 3x to 9x at the highs. The basic metals followed equities in holding their prices in sideways price pattern. We ended the quarter being short of this sector.

Our square point commodity portfolio of 200m notional reflected our early massive gains in oil racing £62M, but then falling back to $15.5m and 20/62 in this universe.

Arkent Q1 2020 Performance Appraisal

The above Chart is of our trade of the Quarter in the FTSE with a 3:204 risk to return.

Global Forecaster

I set up GF last summer as I saw the signs that global markets were soon to peak and would collapse with the most grievous consequences. I am pleased to report that our performance in Q3 2019 and Q1 this year has exceeded any of my expectations. I hope that my work has helped you maximise your profitability. By reading the below quarterly you will have a better idea of my methodology as well as how I combine geopolitical predictions using my various models from Breaking The Code of History with a complex set of price models all then integrated into a risk model. All of these real-time predictions have been published on the Global Forecaster Site.

Geopolitical calls

1. The Wuhan Virus: From the 22^nd January we started to highlight the risks of the Wuhan Virus to our Arkent readers. Our simple observation was that the outbreak had stopped 1.2 billion energetic Chinese in their tracks, signifying the seriousness of the outbreak. This, coupled with the 14 day incubation period without symptoms, led us to quickly recognised that the virus would be almost impossible to stop becoming a pandemic. We stayed ahead of the curve during the whole of Q1, in predicting the effects and impact on economies, politics, and markets.

2. The collapse of the Western financial system: Our Arkent model highlighted weakness in the Western system following the trade bifurcation with China. Our Arkent road map successfully followed the dominos as they fell, from commodities, bonds and FX to Equities. In our opinion the weakness would have caused the over-leveraged markets to fall anyway. But, with the Entropy Tsunami of the Wuhan Virus, the outcome became inevitable.

3. Trump's One Term Presidency: We predicted that as the stock market fell and economic conditions deteriorated Trump would lose to a Democrat. If the Democratic nomination had been later we feel Sanders would have succeeded, presiding over a shift to wealth distribution politics. But, luckily for America, Biden will be the next president.

4. The collapse of the oil sector: Predicting from $65. the fall of the oil price to sub $27, we predicted the end of US oil shale and a range of massive upheavals to hydrocarbon economies and associated Geopolitical shifts.

5. The collapse of Boeing: Lastly we predicted the demise of Boeing. This has been accelerated by the onset of the Wuhan Virus.

Translating Ideas into Risk and Profit

I have been a macro asset manager for over 35 years. I know there is a big difference between having an idea and translating it into profit. My Arkent and Market Analysis Service are designed to do just that. Indeed, I am pleased to say I have achieved this objective during Q1 by successfully building on the Brexit success of the last quarter. To remind you of how it works, each idea has a risk unit from the entry point to the stop level and a trade idea can have a maximum of 3x risk units in any one market at any one time. A spreadsheet is available to explain all the trades which are displayed on the site.

Commodities

Formed the first domino to our countdown to the reversal of the equity markets as they were an accurate reflection of the real collapse in global demand that was not seen via the economic numbers due to embedded biases and exaggeration. Oil gave both early warning of the magnitude of the economic declines and spectacular returns of 1:30. Meanwhile, early strength in gold supports our view that a major equity turn was imminent. However, when the drop came, margin unwinding hit the price of gold and silver which created a net neutral return from this element of the Strategy in Q1 as gold gains balanced silver losses. I expect this sector to perform well in Q2.

1. Carbon credits were our leading indicator, in which we used a signal for economic activity. We sold the highs at 2821 and have run a 2x position to the current 1760 lows for a 2 to 18.7 risk to return.

2. Oil was our bellwether for Global demand. Even through the spikes related to the Saudi refinery attack and the abduction of the ships by the Iranians we maintained that the highs were capped. We went short from $62.5 on a 3x position and we are still running it here at $22. This has made a spectacular 3 to 30 risk to return.

3. Gas has been another key energy bellwether relating to demand and we have been short since 2700 and ran a 1x position down to 1670 with a 1 to 3.4 risk reward.

4. Commodity Stock shorts have been very successful. Predicting declines in Tullow Oil (92%) Premier Oil(84%) Shell(37%) BP(27%) Exxon(39%).

5. Iron Ore has only moved marginally but we captured the high to low of the range with 1 to 2.4 risk reward.

6. Copper has only moved marginally but we captured the high to low of the range with 1 to 2.7 risk reward.

7. Corn and Soya is where we predicted 10% plus decline with no trades.

8. Gold, our safe haven play from $1480 has to date been since the January open of gold @ $1600 has been volatile but we have captured a 1 to 2.6 risk-reward.

9. Silver has been a nightmare and we have not played it well, missing the drop to a new low, with a 1 to 11 loss.

10. Gold and Silver Stock, our safe haven, play neutral.

Bonds

The US, German and UK bond markets were the second dominoes that we watched closely concerning our Arkent scenario model. On the basis that Bond Markets were smarter than equities. Indeed, they proved to be as whilst equities in the US went into a blow-off high, bond yields were sending the signals that they were ready to decline. We ran longs in Bunds, Gilts and our most successful are the T Notes as the latter had the most yield compression potential; something we have been keen to point out all quarter. On the opposite side of the coin we have been short on Italian BTPs looking for them to go into default and that position has made money and looks great for Q2. Overall, we are extremely pleased with our performance in this sector.

1. US T Notes We were positioned max 3X long from 23^rd January and are still running a position that has made a spectacular 3 to 27.1 risk to return.

2. Bunds We were positioned max 3X long from 22^nd January and exited at our target at the high with a 3 to 17.6 risk to return.

3. Gilts We were positioned with a 1X long from 23^rd January and exited at our target at the high with a 1 to 4.1 risk to return.

4. Italian BTPs We view these bonds as at great risk of a major sovereign default, so we have been short from just below the highs and seen then drop deeply and recover to some degree. We are holding the position with a 3 to 7.7 risk to return.

Our Arkent Model gave the key sub-strategies that we followed. Notably, we lost a small amount the short Dollar play. However, the EM play was very successful and especially of note was our commodity currency trade in Dollar Canada that made a 1 to 33.5 return. Lastly, our startling safe-haven play did not work as expected but we believe it is about to kick in during Q2.

1. A weak dollar against the major currencies, such as the Yen, Swiss Franc and Sterling (we always viewed the Euro as very weak). Initially, our view was correct, but we failed to anticipate the dollar repatriation trade and flows back into the US to shore up faltering balance sheets. Our stop controls on the profitable short dollar trades saved the day as the dollar rallied. At the highs in dollar and yen as well as lows in sterling, we put the short dollar trades back on and are running them. Considering the volatility of the dollar range trade our net losses were very low.

a. Dollar index 1 to -5.9 risk to return

b. Euro Dollar 1 to -3.3 risk to return

c. Dollar Swiss 1 to 1.2 risk to return

d. Dollar Yen 1 to -1.9 risk to return

e. Dollar Yuan 1 to 0.8 risk to return

f. Cable 1 to 0.0 risk to return

g. Bitcoin 1 to 0.5 risk to return

2. A strong Dollar against the EM currencies. This was a very successful element of our FX with a net 1 to 55.4 risk to return

a. Sterling Turkey 1 to 2.5 risk to return

b. Mex Peso 1 to 21.5 risk to return

c. Real 1 to 7.5 risk to return

d. Rand 1 to 11.6 risk to return

e. Ruble 1 to 13.4 risk to return

3. The commodity currencies would collapse with oil. The only expression we found was Dollar Canada. This proved to our Best FX trade of the quarter with 1 to 33.5 risk to return.

a. Dollar Canada 1 to 33.5 risk to return.

4. Sterling would be a safe haven.

a. Sterling Euro 1 to -7.6 risk to return.

b. Sterling Yen 1 to -11.8 risk to return.

Equities -The Main Event

Our Arkent strategy going into the quarter was to sell the weakest stock markets first and resist trying to pick a high in the strongest market (which was the US stock indices). Thus, we started with the Chinese A 50 and then focussed on The FTSE which had shown itself to be weak due to Brexit concerns. We then focussed on the Euro Stoxx 50, The Italy 40 and Spanish 35. After a couple of failed attempts, we located these precisely at the highs. We then began shorting the weakest US Stock market, the DJI, and finally the S and P 500.

We managed to sell max positions just at the highs which have yielded remarkable returns this quarter. The below shows the net risk to return ratio in trading units. The FTSE at 3:204 and The Eurostoxx 3:105 were exceptional.

1. China A50 2:16 risk to return.

2. FTSE 100 3:204 risk to return.

3. Euros Stoxx 50 3:105 risk to return.

4. Italy 40 3:40 risk to return.

5. Spain 35 3:37 risk to return.

6. DJI 2:44 risk to return.

7. S&P 500 (aka The Vampire Domino) 3:64 risk to return.

8. US Tech 1:12 risk to return.

Meanwhile, we successfully picked shorts in Disney(37.5%), JPM (36.3%), Tesla (67.7%), Citi (29%), Barclays(16.7%) and Lloyds (23%). We predicted that Boeing would end up in Chapter 11 and it has since dropped (56%).

Overall, our predictions and trade locations have been as good as we could hope for in any circumstances.

Arkent Q4 2019 Performance Appraisal

The Trade of the year-Pound and FTSE

Whilst being able to predict the political progress and outcome of this election, detailed in the Murrinations The End of the Brexit Civil war Part 2 , I was also able to predict sterling price action and behaviour, along with the FTSE.

Cable- Having picked the 1.1950 low got long at 1.2225 and took profit at 1.3000 and re-entered position at 1.2825 taking Profit at 1.3180 and 1.3400 similarly for sterling Yen. We are now flat.
FTSE Sold the FTSE at 7710 and 7340 and still short at 7240.

Stock Indices-Bearish short plays

This as has the toughest sector, as we have been bearish from good price locations.

The strongest market has been the S and P where we have been seeking the high of the decade unsuccessfully to date!
Notable exceptions being a success in the FTSE-Sold the Aug @7710 highs and the next high @7295 and have been running the shorts
Some profitable individual Long term Stock recommendations the best of which was -Tullow/oil’s drop from 200 to 50.

The Fx Sector has provided excellent trading Opportunities

Dollar index Bearish -called and sold the 9925 high adding at and running short @ 9630
Euro Bullish Called the reversal low at 108.80 and still long at 111.80 and running the position
Cable Bullish trades have been excellent as above and are now flat
Sterling Yen Bullish- trades have been excellent and we have been long from 139.30 to 147.00 and are now flat
Dollar Yen Bullish; called the low above 104.00 added @106.40 and running 3X long and now at 109.70to our first target @ 111.00
Dollar Yuan Bearish-I have nicknamed this The Empire Pair and we have been short dollars from an excellent entry point and will continue to run the position
EM markets still to play out

Bonds

Have been looking for price lows that would act as a base to rally to new highs/yield lows. Well-positioned trades at the lows were stopped out with Neutral profits on longs , but 6 points on short BTPs

Bunds Bullish seeking the low of the four-month correction and have bought and sold at the same price
T Notes Bullish seeking the low of the four-month correction have bought and sold at the same price
BTP Bearish sold 147.20 and bought back at 141.50

Precious metals

Currently Long positioned for a rally.

Gold Highlighted the key level of Gold resistance at $1550 and have built a 3X long position @1486, trade still open
Silver we have just entered a long position at what could be a significant low @ 1660 now at 1700 trade still open

Commodities

Have been the right side of the accelerating decline in the commodity complex. Nat gas was a spectacular trade.

Carbon Emissions Bearish sold 2812 high and 2600 and run shorts now at 2400
Iron ore-Bearish
Copper Bearish
Oil Bearish- short @$58 and waiting
Nat Gas Bearish sold the recent correction at 2900 which is now 255 lower at 2200 and running trade

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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.

Long gold and silver stocks as they are set to sore so max positions here.
Short the banking sector will suffer very heavily with the negative rate move.
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 ECB! What 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.

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

Equities

US Tech 100
S&P 500
Dow Jones Industrial
Individual Stocks
DAX
Euro Stoxx 50
FTSE 100
Italy 40
Spain 35
China A50
Other DM Indices

FX

Dollar Index
Euro Dollar
Euro Yen
Dollar Swiss
Dollar Yen
Dollar Yuan
Dollar Canada
Sterling (Cable)
Sterling Euro
Sterling Yen
Dollar NZD
AUD/NZD
EM Currencies
Bitcoin ($)

Bonds

US Bonds
Bunds
UK Gilts
Italian BtB
EU

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
Gold and Silver Stocks
Platinum
Carbon Emissions
Oil
Natural Gas
CRB
Copper
Iron Ore
Aluminium
Lead
Nickel
Commodity Stocks
Corn
Soya Beans

Those marked in bold are more frequently updated.

Sample Analysis

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

Equities

Bonds

Emerging Markets

Commodities

Previous Pause Next

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.

Cable Basing for its attempt at the 1.2700 Trend Resistance

Medium Term

Very Bullish

Cable continues to base in the 123.30 zone before testing the 1.2700 trend resistance.

We remain long with a 122.75 stop

T Notes At Buying Levels for Next Surge

Long Term

Very Bullish

The recent decline in T Note prices, was structured as a three wave decline, suggesting that we have since March have been in a wave 4 triangle which suggests that prices will surge in a final 5th wave that will end up in negative territory, i.e -0.3%.

As such we suggest going long 6x here at 138.47 with a 138.00 stop