Financial Market Forecasts

Predicting Market Moves Before They Happen

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 Scenario 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 Macro 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.
  • Long/Short Strategist 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.
  • Individual Share Analysis & Forecasts - 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 an 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.

1. Our USP

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 Feb 2020 pandemic risk-off the 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 maximize 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 as based on;

  1. Our Geopolitical predictions are generated from our theories of human collective behaviour. The five-phase life cycle, The Polarisation Process, and the Commodity K cycles. This allows us to predict both national behaviours such as the path of the Brexit Process, the path of American Decline, and the Aggressive rise of China. All in considerable detail. These models have allowed us to predict every UK and US election results 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. eg on 5th Jan 2020 we accurately predicted that the Wuhan epidemic would become a global pandemic. Most of all this model allows us to look at the impact of cycles that have a longer wavelength than can be detected in the price history of modern financial markets, such as the decline of the Super Western Christian Empire.
  2. Our Pattern Recognition models as 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 and 100 individual shares. Our Wave counts are in effect a language to describe market behaviour by identifying patterns over multiples time frames, 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 5 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.

2. Who Are Our Clients?

Global Forecaster’s clients range from the largest pension funds and hedge funds in the world to family offices. 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.

3. 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. Murrinations provide access to our geopolitical views and updates. These are relevant to all of our clients and thus are included as part of higher-level subscriptions. £40 per month per subscriber.

2. Arkent Macro Scenario Updates - Our macro market strategy, which integrates all of the elements of our Geopolitical perspectives (Murrinations) 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 pension funds and family offices with a medium to long time frame, and for shorter-term risk-takers to define create a framework within which to apply market risk. £1500 per month per subscriber.

3. Individual Macro Market Analysis & Forecasts - this service is designed to provide specific recommendations in the market sectors outlined below, 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%). 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, £1000 per sector per month per subscriber:

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

4. The Premium Strategist Package includes Murrinations, Arkent Macro Scenario Updates, and one Individual Macro Market Analysis sector for £2200 per month.

5. The Global Macro Package includes Murrinations, Arkent Macro Scenario Updates, and Individual Macro Market Analysis & Forecasts for £5000 per month. In addition, advisory packages are available on request.
 
6. Long/Short Strategist 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 Arkent Macro Scenario Updates 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 Individual Share Analysis & Forecasts this seeks to provide precise low risk-high reward entry points. £1500 per month per subscriber.

7. Individual Share Analysis & Forecasts – 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. Updates and trade recommendations are sent out in real-time as and when the market moves require. We make specific real-time 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 2 minutes of publication to clients' 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
  • Heavy Industry
  • Hi-Tech
  • Homebuilders
  • Mining
  • Precious Metals
  • Russell 2000
  • Space
  • Travel

8. The Long/Short Package includes The Long/Short Strategist, Equity Indices Analysis & Forecasts and Individual Share Analysis & Forecasts £5000 per month per subscriber. In addition, advisory packages are available on request.

Please use the tabs above to view a sample Arkent Scenario, example market analysis and recommendations, quarterly appraisals, testimonials, FAQs and our full list of prices with links to subscribe. 

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 Macro Scenarios Q3 2021 Performance Appraisal – The Peak Of The Doomsday Bubble
ARKENT SCENARIO 2021 Q2 PERFORMANCE APPRAISAL
Arkent Scenario 2021 Q1 Performance Appraisal
Arkent Scenerio 2020 Q4 Performance Appraisal
Arkent Scenario 2020 Q3 Performance Appraisal
Arkent Q2 2020 Performance Appraisal

Arkent Macro Scenarios Q3 2021 Performance Appraisal – The Peak Of The Doomsday Bubble

SP500

The chart above shows the SP500 during the quarter with double-sized 400% double short excellent entry points that produced good returns, but that most importantly set up Q4 for a spectacular outcome. We have long maintained that once the strongest equity index commences its decline (like the SP500), then the Doomsday Bubble is very close to bursting.

Q3 2021 Performance Review Contents

  1. Global Forecaster introduction
  2. Our main Q3 geopolitical calls
  3. Q3 market predictions and performance
  4. Alpha Capture 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 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 hegemonic challenge of China to America and the West.

We now have eight 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
  2. good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling)
  3. appropriate position sizing
  4. risk management in accordance with the progression of a trend
  5. successful trade exit points.

These five points describe Global Forecaster’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.

 

2.0 Our Main Q3 Geopolitical Calls

  1. The Doomsday Bubble is the name we have given this current asset price bubble. WE EXPECT THIS TO BE THE BIGGEST FINANCIAL COLLAPSE IN WESTERN HISTORY – because when it bursts, the damage that the asset price implosion will cause will be huge and very difficult for the Western economies to recover from. We have been tracking the bursting of the smaller bubbles as the ‘riders of the apocalypse’ very successfully this quarter. We expect that the delusional gap between economic reality and the stock market will now soon closeThe Phase 2 correction (of our Arkent Road Map) 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 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). 
    This prediction is on track.
     
  2. Sino-Western polarisation will accelerate swiftly as the effects of the pandemic worsen.  
    This prediction is on track and continues to be very significant in its geopolitical impact.
     
  3. Inflation expectations. There will be a very significant asset price fall (the collapse of the Doomsday Bubble) triggered by input inflation at the peak of wave one of the commodity rally. The asset price collapse will then create a demand drop that pauses inflation for 6–12 months before it returns with a vengeance. Thus, the Western economies will be in varying states of stagflation through this period, initially increasing/a pause/massive stagflation.
    This prediction is on track.
     
  4. The global pandemic would last for 18–24 months (from March 2020) until a vaccine is applied globally en masse, or herd immunity is reached. Herd immunity is being bolstered through T cell immunity, which is not as of yet being tested. We estimate that with T cell immunity, the herd immunity levels are at least double the published figures. We are not confident that we will see an effective global vaccine roll-out until late next year (2022). 
    This prediction has been correct and although we expect COVID-19 to persist like a flu, its main impact has now abated.
     
  5. The lockdown strategy of Western governments will, in time, be viewed as a misguided response that equated to economic suicide. This is because lockdown failed to balance the overall relatively low death rate of the majority versus the high magnitude of economic destruction. By focusing 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 a clear strategic leadership. 
    This prediction is playing out, and will do increasingly as the economic situation worsens.
     
  6. There will be a sovereign debt crisis starting in the US, Italy and/or Spain. Bond yields will first fall as equities fall and then, as the panic builds, yields will rise considerably by the year's end. America will be at risk of a sovereign bond crisis and ultimate restructuring. Bond yields will rise not due to economic recovery, but to the risk over issuance of sovereign debt. 
    This prediction is on track as inflation and rates rise.
     
  7. The EU will fracture from its current structure and devolve to national levels as the sovereign debt crisis unfolds later in 2021. 
    This prediction is still to play out, but Germany is failing and France flailing around to cover up its weakness.

     
  8. Brexit will happen on terms that benefit the UK as the EU’s position weakens. Britain will involve Article 16 over the Northern Ireland protocol. 
    This prediction proved correct.
     
  9. Britain will increase its global influence. 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.
    This prediction is on track. Indeed, the AUKUS agreement and trade deals with Indo-Pacific nations is proof in point.
     
  10. Sterling will be the safe haven currency. After an initial risk-off dip to 1.30/1.25 as the risk comes out of the markets and the Dollar gains some ground, Sterling will then appreciate, more than any other currency in the world during the next six months, rising to Cable 1.60 plus and against the Euro to 0.65. Exporters, be warned and prepared. 
    This prediction is on track.
     
  11. 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. 
    This prediction has started to unfold, and we expect the process to accelerate as the commodity markets and Russian GDP drops in 2021. So far, Putin has suppressed any unrest; however, the collapse in the Doomsday Bubble and fall in commodities will provide one last moment of vulnerability to Putin in the next 6–9 months.

 

3.0  Q3 Market Predictions And Performance

3.1 Global Forecaster Methodology – Designed For Risk-Takers

We always seek to quantify the accuracy of our recommendations as they translate into market trade recommendations that are readily actionable by risk managers. We are pleased to report that the system we have used over the past two years has produced a very accurate representation of our market calls, both 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.

To remind you of our methodology behind each trade recommendation; 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 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 timeframes 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.

Our strategy is to trade in alignment with long-term directions and trends and then find short-term entry points that translate into long-term timeframes 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 that are displayed on the website and the summary tables below.

We then go a stage further, taking our 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 are given below. 

 

3.2 Top-Performing Markets During The Past 21 Months

Image
top 15 Q321

This quarter has been one of the most remarkable performances in our eight-quarter history. Our recommendations have been in line with our Phase 3 Arkent Scenario Road Map and we have executed a multitude of outstanding short-term entry points across all sectors. These trades have then extended to medium-term timeframes and multiple returns.

Top of the quarter's performance list was Bunds followed by US T Notes, as we captured first the corrective rally in prices from bottom to top and then reversed our position at the top and captured the impulsive decline. Silver and Palladium were the next best performers over the quarter, with our EURO STOXX 50 and SP500 shorts following up. Notably, the SP500 carried an exceptional 400% double-sized trade allocation to emphasise the once-in-a-lifetime importance of the unfolding high. Full details can be found in Double Shotting The High Of The US Equity Markets. Meanwhile, all our currency views were on track with the Dollar Index leading the currency returns.

This quarter has once more demonstrated the profitability of our predictive systems across all the asset classes we cover. Most importantly, we believe we are set up for a hugely profitable Q4 that follows the predictions made in our Arkent Road Map. 

 

3.3 General Appraisal Of Q2 Performance

Q3 was a quarter dominated by our strategy of picking the reversal point of the Doomsday Bubble across all the risk assets. We started the quarter believing that the bubble was on its last legs and was running out of momentum, consistent with our Arkent Phase 3 Road Map. We were able to pick our sell locations, setting max size positions with tight stops. To our satisfaction, during both Q2 and Q3, we have demonstrated a very clear and consistent skill of picking blow-off highs in markets that were in acute bubble dynamics; Bitcoin, lumber, soya and iron ore being some of the best macro examples. This gave us confidence concerning picking the reversal and equity highs in Q3.

 

3.3.1 Equity Markets

Image
eurostoxx Q3

The chart above shows the EURO STOXX 50 chart during Q3 with a max-sized 200% short that had an excellent entry point and which has since produced encouraging returns. But that, most importantly, we are now set up in Q4 for a spectacular outcome as we expect the Doomsday Bubble to burst in the worst financial crash since 1929.

Image
EQ Q321

This quarter demonstrated positive returns in all our short equity strategies, with the best results demonstrated in the SP500 and EURO STOXX 50. Our max short positions should bear bountiful fruit in Q4, judging by the price action across the equity index complex. Note also the preservation of capital from the FTSE and EURO STOXX 50 profits after the Feb–March 2020 decline, despite trading from the short side in the corrective rally. This is a clear demonstration of our ratchet trade management programme, using precise short-term entry points to gain access to larger longer-term moves.

 

3.3.2 FX Markets

Image
index

The chart above shows our trade capture of the Dollar Index unfolding in a C wave rally.  

Image
fx q321

This quarter demonstrated solid returns across all our currency pairs. We expect that we will see continued risk-off Dollar purchasing in the first portion of Q4.

 

3.3.3 Bond Markets

Image
Bonds and Bunds

US T Notes and Bunds have accurately followed our predictions and very specific trade recommendations with the very high returns associated with tight entry points and 10x moves on both the T Notes and Bund's rally and subsequent decline this quarter. Bond markets have been following our Phase 3 Road Map in our Arkent Road Map perfectly and we are now set up for the biggest bear move in bonds for over two decades. The reversal of positions from long to short took place in early August 2021.
 

Image
bOND q321

We started the quarter 200% bullish Bunds and bonds in what we viewed as the wave two bounce in prices. We then reversed and moved to a short 200% position at the highs with super-tight rewards ready for the main bear trend to resume. The results in Bunds were exceptional at 449 trade units.

 

3.3.4 EM Markets

Image
Rand

Dollar Rand has been rallying strongly, continuing a positive return profile as part of our long-term view that the country will soon be riven by, at worst, a civil war and, at best, the succession of the Western Cape.

Image
MSCI

The MSCI has shown a similar topping pattern to the Western Equity Indexes.

Image
em q3

EM equities and currencies started to move as the risk-off trend built momentum. We expect our max positions to be very profitable in Q4 2021.

 

3.3.5 Commodities

Image
SilverQ3

Silver traded in a complex correction that finished at the end of the quarter. Allowing us to capture substantial returns.

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Iron Ore

We captured iron ore’s top to bottom bursting its bubble, signalling in advance a global fall in demand.

Image
cOM q321

Silver, Platinum and Palladium provided our best returns as our short trades reached the termination and the point of profit-taking. Iron ore, although only 46-unit trade return, which equates to 4x the initial risk, was an outstanding advanced call on demand reduction in China, feeding back into our macro scenario. We made continued gains in soya and corn and the industrial metals also showed profitability.

The only area that produced losses was the energy sector, whose wave one extended further than we expected in Q3.

 

4.0 Alpha Capture Funds And Their Performance

We performed well in the one Alpha Capture platform we operate, with a 4/97 rank.

 

ARKENT SCENARIO 2021 Q2 PERFORMANCE APPRAISAL

Bitcoin AK

Bitcoin was Our trade of the quarter. Having run long positions for 60% of the bubbles rally from 6000, to 30,000 out of the whole move to 64,000, we then identified the final high and positioned of a maximum size short @62,000 with a tight stop to makeover 11X returns and capturing 226 trading Units.... so far!

Contents of this Q2 2021 Performance Review

  1. Global Forecaster Introduction.
  2. The main Q2 geopolitical calls.
  3. The market predictions and performance.
  4. 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 in February 2020 and collapse with the most grievous consequences. We have called this transition The Great Shift, as it is driven by the hegemonic challenge of China to America and the West.

With seven quarters of performance under our belt, the results of our geopolitical predictions, market predictions, and fund performances have been very encouraging indeed. We believe the key to high returns and long term success is based on:

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

These five points describe Global Forecaster’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 site and have been available to our clients.

 

2.0 The Main Q2 Geopolitical Calls Made at The Beginning of Q2)

  1. The Doomsday Bubble-Is the name we have given this current asset price bubble. Because when it bursts the damage that the asset price implosion will cause will be huge and very difficult for the Western economies to recover from. We have been tracking the bursting of the smaller bubbles as the riders of the apocalypse very successfully this quarter. We expect that the delusional gap between economic reality and the stock market will now soon closeThe Phase 2 correction (of our Arkent Road Map ) 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 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).  This prediction is on track
  2. Sino-Western polarisation will accelerate swiftly as the effects of the pandemic worsen.  This prediction is on track and continues to be very significant in its geopolitical impact.
  3. Inflation Expectations There will be very significant asset price deflation well before inflation sustainably impacts profitability through shares, commodities and the property market. This prediction is on track.
  4. The Global Pandemic will continue for 18-24 months (from March 2020) until a vaccine is applied globally en mass, or herd immunity is reached. Herd immunity is being bolstered through T cell immunity which is not as of yet being tested. We estimate that with T cell immunity the herd immunity levels are at least double the published figures. We are not confident that we will see an effective global vaccine role out until late next year (2022). This prediction is on track
    1. There will be secondary and tertiary waves.  This prediction is on track as attested by the third wave driven by the Delta Variant.
    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, although it will do increasingly. This prediction is on track.
    3. Testing (including for new strains) and tracking must be greatly enhancedThis prediction proved correct. 
    4. A globally coordinated response to the pandemic could and should be led by Britain. This prediction is on track.
    5. There needs to be more focus on the inevitable mutations of the virus into a multi-strained simultaneous pandemic. This prediction is on track.
    6. In Western societies,  could derive long-term health benefits, with new technologies to kills viruses and eradicates their associated diseases. But also as populations are in future encouraged to take self-responsibility for their health. This prediction is on track but early stage
  5. The lockdown strategy of Western governments will in time be viewed as a misguided response that equated to economic suicide. This is because lockdown 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. This prediction is still to play out
  6. There will be a Sovereign debt crisis starting in the US, Italy and/or Spain Bond yields will first fall as equities fall, and then as the panic builds yields will rise considerably by the year's end. America will be at risk of a sovereign bond crisis and ultimate restructuring. Bond yields will rise not due to economic recovery, but due to the risk over issuance of sovereign debt. This prediction is still to play out.
  7. The EU will fracture from its current structure, and devolve to national levels as the Sovereign debt crisis unfolds later in 2021. This prediction is still to play out.
  8. Brexit will happen on terms that benefit the UK as the EU’s position weakensThis prediction proved correct over the sausage war.
  9. Britain will increase its relative global influence as the Pandemic progresses. 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. This prediction is on track. After an initial risk-off dip to 1.30/1.25, before Sterling will then appreciates, 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. This prediction is on track
  10. 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.  This prediction has started to unfold, and we expect the process to accelerate as the commodity markets and Russian GDP drops over the rest of 2021.

 

3.0 The Q3 Market Predictions

3.1 GF Methodology-Designed for Risk Takers

We always seek to quantify the accuracy of our recommendations as they translate into market trade recommendations that are readily actionably by risk managers. We are pleased to report that the system we use over the past two years has produced a very accurate representation of our market calls, both in the direction, size, and magnitude of the move. Allowing risk-takers, to quickly assess the accuracy of our past predictions in any market or sector.

To remind you of our methodology behind each trade recommendation; 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 200% which equates to 20 risk units at any one time. Trade recommendations can be either 33.3%, 66.6% 100%, 133% 1665 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 2021 Q2 the conviction levels were very high due to the high and integrated signal strength associated with my Phase 3 roadmap.

Our 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.

We 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 During the Past 21 Months

Image
Q2 Top 15

The FTSE remains on top of teh top 15 by some margin, as our strategy of well-positioned maximum shorts over 5 quarters has broken even, keeping all the gains captured from the February to March decline. Whilst currently being 200% maximum short from the highs having entered the position in Q2 2021. The FTSE demonstrated the efficacy of our ratchet trading strategy, with the loses being small when it goes against our views but with  big profits when we are correct.

In second and third place on the top 15 table, were great gains for Gold, Platinum, and to a lesser extent silver. All three’s metal's declines were linked to the risk-off dollar rally which also produced solid gains across our long dollar trades, Dollar Canada being our best FX performer.

Bitcoin was the star performer of Q2 with the highest quarterly return, which moved it up to 5th place on the all star table.

Notably, all the European stock indices made only moderate positive to neutral gains. In contrast to the US and in particular the NASDA and SP500 which were the strongest of equity markets and as a result were our worst performers in the equities sector.

Meanwhile, we had some great successes locating the reversals in many commodity markets. The most notable being lumber, whose fall has now signalled the end of the US housing Bubble, followed by a dramatic Soya spike and reversal. However, Oil proved to be a very determined bull and cost us 137 trading units on maximum short positions located too early.

This quarter has once more demonstrated a clear pattern as to how our predictive systems work across all the asset classes we cover. This is conditional of course on directional movement which has a cyclicity of fallow periods and fertile periods. The key to our system is avoiding the fallow periods that eat up energy and capital with no return, focusing instead on the fertile periods in sectors with dynamic price moves. This is key to consistent and high portfolio returns.

 

3.3 General Appraisal of Q2 Performance

Q2 Was a quarter dominated by our strategy of picking the Reversal to the massive risk on Bubble, that we believed was running out of momentum. Our view was that the Doomsday Bubble was bursting, and we were able to pick our sell locations setting max size positions in such a way that in all but The NASDAQ, SP500, and in Oil were successful which then made positive returns across the different sectors. In cases like precious metals and Bitcoin and lumber and soya we had an exceptional quarter and are now set up with a maximum position in every asset to profit from a major risk-off move in Q3.

During This quarter we demonstrated a very clear and consistent skill of picking blow-off highs in markets that were in acute bubble dynamics. Bitcoin, Lumber, and Soya being the best examples. Giving us confidence with respect to the picking the reversal and equity highs, which look to be unfolding as we write.

 

3.3.1 Equity Markets

Image
eurostoxx Q2

The Above Chart Shows the Eurostoxx 50 trading during the quarter with excellent entry points that produced marginally positive returns in this leading edge of the bubble index

Image
Q2 Equities

This quarter we extended our coverage to Asian Indices and included the Vix  (SP500) and the Euro Vix (Eiro Stoxx 50) and the FTSE 350 Travel and Leisure index. Except for the US equity markets, our calls in Europe and Asia on average were net break-even. We noted the weakness in China as a leading indicator of a wave of bearishness moving east. Our worst losses in any quarter in any market since we stated took place in the NASDAQ this quarter, where several attempts at max-sized 200% shorts blew up in our face. However, our large short position should bear bountiful fruit in Q3, judging by the price action across the equity index complex.

 

3.3.2 FX Markets

Image
can AK

The above chart shows the Dollar Canada and the quarter's excellent trade location for the  major reversal, linked to the commodity cycle as well as a dollar risk-off move

Image
Q2 Currency

This quarter we extended our coverage to include the crypto 10 index. Our FX strategy was one of being medium-term long the Dollar for a correction, which worked well in the European Dollar pairs. Dollar Aussie and Canada became interesting as the commodity cycle turned lower. On the negative side Dollar Yen is still a challenging pattern. Notably, bitcoin produced outstanding returns for the quarter.

 

3.3.3 Bond markets

Image
Bunds AK

Bunds Provided some solid returns, after a good entry point near the lows was allowed to run in what we believe is a wave 2 bounce.

Image
Q2 Bonds

We started the quarter bearish Bonds in what we viewed as the 5th wave of a larger degree wave 1. We moved to a long position too early but stayed with the strategy and ultimately bought the largest long position at the very lows; in a contrarian trade as the market was spooked by the inflation meme which creates a very strong negative sentiment in bonds as befits the 5th wave. Our analysis that some commodities had reversed after completing their wave 1, gave us more signals that our max 200% long positions were correct. Indeed for the last month bond prices have rallied against large shorts which have been rolled up. Bunds produced better returns than T Notes.

 

3.3.4 EM Markets

 

Image
Turk Ak

Dollar Turkish has been rallying strongly continuing a positive return profile

Image
Q2 EM

With the exception of the Dollar Turkish, the quarter was unremarkable in this sector. However, we expect the lateral correction to give way to major risk-off moves in Q3 and are well-positioned to take advantage of such a move.

 

3.3.5 Commodities

Image
Gold AK

Gold traded in a Complex correction, with the rally into $1905 being difficult to understand, until the very end. When it provided a tight entry point with maximum position size.

Image
Lumber AK

Lumber was the second major bubble that we called correctly in Q2, signalling the end of the US housing Bubble.

Image
Soya AK

Soya was not a bubble but rather the vigorous end of a wave 1 of a 5 year bull market. We captured the high with max size a dn tight entry risk.

Image
Q2 Commodities

This Commodity sector produced some very good and broad returns except for Oil which like the NASDAQ proved tough to locate a short position in. Gold Platinum and Silver made solid returns in a messy sideways trading pattern. Whilst the other commodities like soya produced excellent returns as we located our shorts too early before the reversals finally took place. Oil and copper were our best shorts. Lumber was a new addition and one we are very pleased with both as stand alone market, but also to warn of the impending US house bubble collapse, as part of the riders of the apocalypse thesis before the equity bubble bursts. We are set up for a major commodity decline to unfold from here.

 

 

Arkent Scenario 2021 Q1 Performance Appraisal

Turkish Lira

The above chart in Turkish Lira shows the capture of 122 trading units during the rally so far. Note that EM currencies are on the leading edge of the Bubbles collapse.

 Contents of this Q1 2021 Review

  1. Introduction.
  2. The main geopolitical calls.
  3. The market predictions and performance.
  4. 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 in February 2020 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 six quarters of performance under our belt, the results of our geopolitical predictions, market predictions, and fund performances have been very pleasing. We believe the key to high returns and long term success is based on:

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

These five points describe Global Forecaster’s risk methodology.By reading the below quarterly performance appraisal you will have a better idea of how we apply my 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 site. We then go a stage further and apply these trades to different fund mandates. Track records are given below.

 

2.0 The Main Q1 Geopolitical Calls

  1. Sino-Western polarisation will accelerate swiftly as the effects of the pandemic worsen.  This prediction is on track and continues to be very significant in it geopolitical impact.
  2. 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).  This prediction is still to play out, with the bubbles collapse.
  3. 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%+. This prediction is still to play out and we have been short gold in the correction that should allow good buying levels.
  4. 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. We estimate that with T cell immunity the herd immunity levels are at least double the published figures. We am not confident that we will see an effective vaccine role out until next year (2021). This prediction is on track.
    1. There will be secondary and tertiary waves.  This prediction is on track.
    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. This prediction is on track.
    3. Testing (including for new strains) and tracking must be greatly enhanced. This prediction proved correct. 
    4. A global response to the pandemic could and should be led by Britain. This prediction is on track.
    5. There needs to be more focus on the inevitable mutations of the virus into a multi-strained simultaneous pandemic. This prediction is on track.
    6. In Western societies, there could be long-term health benefits as populations are encouraged to take self-responsibility for their health. This prediction is on track.
  5. The lockdown strategy of Western governments will in time be viewed as a misguided response that equated to economic suicide. This is because lockdown 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. This prediction is still to play out
  6. There will be a sovereign debt crisis starting in the US, 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 of a sovereign bond crisis and ultimate restructuring. Bond yields will rise not due to economic recovery, but due to the risk of holding debt. This prediction is still to play out.
  7. 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. This prediction proved correct. 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. This prediction is on track.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. This prediction is on track, although we are in a corrective phase to 1.30 before the next advance.
  8. 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.  This prediction is still to play out.

 

3.0 The Q3 Market Predictions

3.1 GF Methodology-Designed for Risk Takers

I was 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, Global Forecaster has evolved its 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.

We 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

Image
top 13

Key changes; Our top 13 table shows no movement at the top with the FTSE remaining in the No1 position. However Silver is up from 4th to second after a solid quarter, with gold stationery despite some solid returns. The other main movers have been dollar pairs. The Dollar index up from 8 to 6 and Dollar Swiss up shooting into 8th and Dollar Turkey shooting into 10th. Meanwhile, Spain and the Sp500 have dropped out of the table.

How the table works As an example of how the Global Forecaster risk system works, we have included the above  table of our 13 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,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 is how our predictive systems work in all the asset classes we cover. This is conditional of course on directional movement which has a cyclicity of fallow periods and fertile periods. The 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 Q1 Performance

Q1 was a quarter of mixed parts, but overall produced excellent returns. Our view is that the Bubbles of Bubbles is bursting, saw confirming evidence in the leading edge of the bubble indices and stocks like the NASDAQ and Tesla all reversing. However, the trailing edge of the bubble benefited from a value switch and continued to make a mixture of marginal gains  and new highs. Within this environment, the excellent positioning of our trade entry points at peaks made some gains in the weakest markets like the NASDAQ and minimised capital loss in the stronger equity markets. Meanwhile, our Dollar calls and trades were all very successful, as were our Sterling cross trades. The linkage between the Dollar and Gold and Silver also meant that we had a good quarter in precious metals (43 pts in gold and 56 in silver). Our Emerging markets recommendations in the currencies had strong returns with Turkish Lira the top-performing market of the quarter (122 pts) as did the shorts in emerging equity indexes. In commodities, our short positions endured losses initially and came good as the markets finally peaked and reversed, oil being our best performer.

3.3.1 Equity Markets

Image
nasdaq

The Above Chart Shows the NASDAQ trading during the quarter and some excellent entry points that produced positive returns in this leading edge of the bubble index

 

Image
equity markets

Except for the NASDAQ and FTSE our calls on equities were negative this quarter. Our strategy of selling the weakest stock markets in preference to the strongest proved once more to be a successful trading adage. Whilst the largest loss in Eurostosxx, was due to the 200% short position at the end of the month, based on a potential diagonal triangle pattern which proved incorrect.

 

3.3.2 FX Markets

Image
Dollar Swiss

The above chart shows the Dollar Swiss and the quarter's excellent trade locations within the bullish trend

Image
Currecny markets

Our strategy was one of being medium-term long the Dollar for a correction, which worked well in the European Dollar pairs.As did our long sterling Crosses. Dollar Aussie became interesting as the commodity cycle turned lower. On the negative side Dollar, Yen is still a challenging pattern, and bitcoin did not reverse quite where we expected it to do so, but still looks set to fall to 30,000.

3.3.3 Bond markets

Image
Bonds

We started the quarter bullish expecting one more new high on bonds, but after key levels were breached switched our view to bearish bonds  in March, recouping some of our losses.

 

3.3.4 EM Markets

Image
EMs

We made nice incremental gains across this sector in both EM currencies and equity indexes, with Dollar Turkey returning a bumper quarter. This sector has been leading the risk off/Bubble collapse.

 

3.3.5 Commodities

Image
Commodities

Gold and Silver made solid returns in a messy sideways trading pattern. Whilst the other commodities gave small returns as we located our shorts too early before the reversals finally took place. Oil and copper were our best shorts.

 

4.0 Alpha Capture Funds Performance

Global Forecaster operates 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. A loss of $11,935,896 equates to a 5.9% loss.

Image
square point equities

 

This fund suffered from the equity market rally in which our key short on oil and banks flew in our face in teh value switch 

4.2 Commodity (Square Point) A Commodity Fund

Image
Squpt commodities

 

There we failed to effectively represent or  trade recommendations in this portfolio.

 

4.3 Top Macro (Client X)

A concentrated best of our macro ideas with zero leverage, which in the quarter actually represented our best performing trade recommendations, in a non leveraged portfolio.

Its key positions have been: Short WTI, gold silver NASDAQ FTSE, and Eurostoxx. 

The net loss over the quarter was 0.4% with the previous net return of 12%.on 8 months.

 

4.4 General Macro (Client Y)

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

The returns over this quarter were negative ($3,008,594).

 

Arkent Scenerio 2020 Q4 Performance Appraisal

Bitcoin

The above chart in Bitcoin shows both the capture of the rally and the missed opportunity of the impulsive rally above 20,000

 

Contents of this Q3 Review

  1. Introduction.
  2. The main geopolitical calls.
  3. The market predictions and performance.
  4. 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 in February 2020 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 our belt, the results of our geopolitical predictions, market predictions and fund performances have been very pleasing. We believe the key to high returns and long term success is based on:

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

These five points describe Global Forecaster’s risk methodology.

By reading the below quarterly performance appraisal you will have a better idea of how we apply my 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 site. We 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

  1. Biden would win the election by a considerable marginContextually, this call was made back in January when Trump's re-election seemed inevitable and when no one was predicting Biden's victory. We based this call on the need of the American electorate for wealth distribution to keep them afloat. This prediction proved correct.
  2. Sino-Western polarisation will accelerate 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. Our estimate is 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 in 1939, which is effectively the road to war in 2025. This prediction is on track.
  3. 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). This prediction has still to unfold.
  4. 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. This prediction has still to unfold.
  5. 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 were correct concerning the onset of a second wave.
    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. This prediction proved correct.
    3. Testing (including for new strains) and tracking must be greatly enhanced. This prediction proved correct.
    4. A global response to the pandemic could and should be led by Britain. This will exclude China and possibly America (by its own choice). This prediction is on track.
    5. There needs to be more focus on the inevitable mutations of the virus into a multi-strained simultaneous pandemic. This prediction proved correct.
    6. In Western societies there could be long term health benefits as populations are encouraged to take self-responsibility for their health. This prediction is on track.
  6. The lockdown strategy of Western governments will in time be viewed as a misguided response that equated to economic suicide. This is because lockdown 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. This prediction is on track.
  7. 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 of a sovereign bond crisis and ultimate restructuring. Bond yields will rise not due to economic recovery, but due to the risk of holding debt. This prediction has still to unfold.
  8. 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. This prediction is on track.
  9. 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. This prediction proved correct. 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. This prediction is on track.
  10. 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.  This prediction is on track.

 

 

3.0 The Q3 Market Predictions

3.1 GF Methodology

I was 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, Global Forecaster has evolved its 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.

We 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

Image
Q4

As an example of how the Global Forecaster risk system works we 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 71x 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 is my predictive systems work in all the asset classes 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

October looked to be on track for a major risk-off market move as the weaker European stock markets started to accelerate lower. As they did so we were able to lower the stops and lock in small returns. However, the rally that in retrospect looks like a continuation of the Phase 2 correction was sharper and unexpected and hence our equity performance for the quarter was poor and mixed in FX bonds and commodities. The best performing market was Bitcons which we captured from 6000 to 20,000.

 

3.3.1 Equity Markets

Image
eurostoxx Q4

The Above Chart Shows the Eurostoxx trading during the quarter

 

Image
Equity

Our strategy of selling the weakest stock markets in preference to the strongest proved once more to be a successful trading adage this quarter as the weakest markets dropped the furthest distance, allowing the stops to be lowered before the late October rally commenced. However, overall equity predictions were negative for this quarter.

 

3.3.2 FX Markets

Image
dollarindexQ4

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

Image
currency

Our  strategy was one of being long term short on the Dollar, but medium term being in a 4th wave correction. The effect was a mixed return across the Dollar pairs. Only Bitcoin produced an exceptional return for the Quarter as our long predictions bore fruit.

 

3.3.3 Bond markets

Image
bonds

These markets were trapped in corrective ranges that we classify as 4th wave before one more rush higher. As such, they provided mixed returns. Bunds gave positive returns, with US  bonds giving negative returns.

 

3.3.4 EM Markets

Image
EM

There were very few recommendations made in this sector over the quarter.

 

 

3.3.5 Commodities

Image
com

Considering that Gold and Silver were in a messy sideways trading pattern our recommendations were very solid and productive. In oil we sought to go short too early, but in Nat gas made some good returns. In basic metals we were too early for our short position.

 

 

4.0 Funds Performance

Global Forecaster operates 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.

Image
equities Q4 SqPt

This fund suffered from the equity market rally in which our key short on oil and banks flew in our face. Whilst we traded our Gold and Silver stock portfolio well the gains were only net marginal. This created the first loss making quarter in this fund.

 

4.2 Commodity (Square Point) A Commodity Fund

Image
commodity sqpoint

There were few technical problems that prevented the capturing of the Gold and Sliver rally, whilst we lost money on the Oil rally and base metal move, producing a  quarter.

 

4.3 Top Macro (Client X)

A concentrated best of my macro ideas with zero leverage.

Its key positions have been: Short WTI and Brent and Short FTSE and Eurostoxx. 

The net loss over the quarter was 3% with the previous four month return at 15%.

 

4.4 General Macro (Client Y)

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

The returns over this quarter were poor.

 

Arkent Scenario 2020 Q3 Performance Appraisal

Gold

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

  1. Introduction.
  2. The main geopolitical calls.
  3. The market predictions and performance.
  4. 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:

  1. Prescient market views generated with a systematic multi-time frame and price modelling system
  2. Good trade entry points with tight and structurally meaningful stops (entered with contrarian price modelling).
  3. Appropriate position sizing.
  4. Risk management in accordance with trends.
  5. 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

      1. 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.
      2. 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.
      3. 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). 
      4. 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.
      5. 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. 
      6. 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.
      7. 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. 
      8. 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.
      9. 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. 
      10. 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.

      Image
      top  markets

       

      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

      Image
      FTSE

      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.

      Image
      P1

      3.3.2 FX Markets

      Image
      The dollar

      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.

       

      Image
      P2

       

      3.3.3 Bond markets

      Image
      bunds

      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.

      Image
      P3

       

      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.

       

      Image
      P4

       

      3.3.5 Commodities

      Image
      Oil

      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.

      Image
      P5

       

      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.

      Image
      tab3

      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.

      Image
      long short

      4.2 Commodity (Square Point)-A commodity Fund

      Image
      tab 4

      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.

      Image
      com

       

      4.3 Top Macro (Client X)

      A concentrated best of my macro ideas with zero leverage.

        Image
        x

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

        1. Long gold and silver capturing the big rally and exiting at the highs.
        2. Short silver for the corrective drop.
        3. Long silver from the September lows.
        4. Short WTI and brent from the highs.
        5. 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

        Gold

        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.

        1. 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?
        2. 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
        3. 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
        4. 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.
        5. 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).
        6. 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%+.
        7. 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.
        8. 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.
        9. 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.
        10. 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 9th/10th 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.

        Image
        Equity Q2 results

         

        Image
        q3 square point

        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 2nd 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.

        Image
        FX

         

         

        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.

        Image
        bond

        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.

        Image
        EM

        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.

        Image
        commodity

        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.

        Image
        square point q2
        Image
        sqc

         

         

         

        Individual Macro Market Analysis & Forecasts

        FINANCIAL MARKETS ANALYST

        You’ll receive David’s invaluable real time trade recommendations, including charts and market outlooks.

        Choose one sector from Stocks, FX, Bonds, Emerging Markets or Commodities, and receive real time updates and forecasts.

        1 month - £1000

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        Arkent Scenario; Heads Up Phase 3 is Accelerating

        Image
        Vix stock chart

        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.

        Image
        stock charts
        Image
        market analysis

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

        Heavy Industry

        • Fuji Heavy Industries
        • Melrose

        Homebuilders

        • DR Horton
        • Barratt
        • Lennar Corp
        • Pultegroup Inc

        Mining

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

        Precious Metals

        • Novagold Resources
        • Kirkland Lake Gold Ltd
        • Silver Lake Resources
        • Wheaton Precious Metals
        • Pan American Silver
        • Eldorado Gold
        • SSR Mining
        • Barrick Gold
        • Coeur
        • GoldFields
        • Hecla Gold
        • Sibyane Stillwater

        Hi-Tech

        • Taiwan Semi Conductor
        • Apple
        • Facebook
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        • Tesla
        • Amazon

        Russell 2000 Shares

        • Appian
        • Gamestock
        • Gamestock
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        Aviation

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        Credit

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        Entertainment

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        Equities

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

        • Dollar Index
        • Euro Dollar
        • Euro Yen
        • Dollar Swiss
        • Dollar Yen
        • Dollar Yuan
        • Dollar Canada
        • Sterling (Cable)
        • Sterling Euro
        • Sterling Yen
        • Dollar NZD
        • AUD/USD
        • AUD/NZD
        • EM Currencies
        • Bitcoin ($)
        • Crypto 10 Index

        Bonds

        • US Bonds
        • 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

        Those marked in bold are more frequently updated.

        Sample Forecasts

        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
        FX
        FX
        Emerging Markets
        Commodities

        FTSE About to Accelerate to The Downside

        Medium Term
        Very Bearish
        FTSE

        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.

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

        Medium Term
        Very Bearish
        BitcoinT7aD

         

        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

        Cable Basing for its attempt at the 1.2700 Trend Resistance

        Medium Term
        Very Bullish
        Cable

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

        We remain long with a 122.75 stop

        Brazil 60 Ending Its Phase 2 Correction

        Medium Term
        Very Bearish
        Brazil 60

        The Brazil 60 has now competed 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 

        Take Profit On Gold

        Medium Term
        Neutral
        Gold

        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

        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

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