Financial Market Forecasts

​The chart above shows the Devaluation of The Turkish Lira that allowed us to make very significant returns of some 70X our original risk capital

Introduction

We have had another excellent quarter with some outstanding trade recommendations.In Dollar Turkey, Natural Gas, Gold,Cable and Dollar Yen.We strongly recommend that our subscribers take the time to read this analysis of our performance to enhance understanding our how we consistently extract alpha from the markets.

Q4 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 Trade Recommendations and Risk Methodology

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 ten 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 following 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 Q4 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 imminently close. In  October when the index was at 15200 we recognised that the NASDAQ was in a fith wave extension with a target of 16740. So far the high has held and we expect a reversal in Q1 2022. This prediction is in play and on track

2.      Chinese -Western polarisation will accelerate  as the CCP become increasingly aggressive, inducing a secondary polarisation in America 
This prediction is on track and continues to be very significant in its geopolitical impact, but has yet to impact markets

3.      The Wolves are Gathering highlighted that after Biden's route from Afghanistan Russian, China and Iran will act as a coordinated pack to challenge America hegemony in Q1/2 2022 Risking Open Conflict  
This prediction is on track and continues to be very significant in its geopolitical impact, but has yet to impact markets
 

4.      Inflation expectations would Accelerate. and be heightened at the peak of wave one of the commodity rally. That shift in perspective would also trigger recognition of not only input inflation but also supply chain inflation and inflation-linked to money printing that would become increasingly dominant ever as input inflation fell in wave 2 of the commodity wave. As such, we argued that inflation increases were systematic and not temporary. However that the commodity Peak of Wave 1 would be followed by a deep wave 2 drops that would signal a demand decline that pauses input 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 and continues to be very significant

5.      The global pandemic would last for 18–24 months (from March 2020) and Omicron was the end. 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. When Omicron appeared in late November we predicted that its attenuated 4^th wave was the end of the pandemic, and represented its transition to become endemic. Effectively immunising everyone who was not vaccinated. This prediction is on track and continues to be very significant
 

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 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 clear strategic leadership. This prediction is playing out, and will do increasingly as the economic situation worsens.
 

7.      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 the issuance of sovereign debt. This prediction is on track as inflation and rates rise.
 

8.      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.
 

9.      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.

10.  Johnson will be removed from office  (Jan 2020) Unless he could manifest competent Leadership, as systems in expansion demand capable leadership This prediction is on track.

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 time frames of short, medium and long to all be aligned. Notably, in Q2 2021, the conviction levels were very high due to the high and integrated signal strength associated with our Phase 3 Road Map.

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 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 sometimes an entry point might require several attempts. A spreadsheet is available on request to explain all the trades that are displayed on the website and 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 20  Performing Markets During The Past 24 Months

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This quarter has provided another remarkable performance in our nine-quarter history. Most notable of which the capturing of the collapse of the Turkish Lira with a 70x return to risk on a 100% long of Dollar Turkish making this one of the most profitable trades in our history and pacing it at the top of our best 20 performers. This trade was an indication that the EM world would suffer the most in the current economic and pandemic environment.

We have also been operating four exceptional 400% super max double-sized trade allocations (400%) strategies in line with what we see as a massive alpha-generating opportunity. All of which created very strong gains over the quarter.

A Safe Haven in Precious Metals detailed in  Arkent – Activating Our Long Precious Metals Strategy and Arkent Update 2 – Long Precious Metals Strategy in which our trade location at the low of the cycle was perfectly positioned and which by the quarter-end were producing very good returns as are the specific mining shares strategies.

A Sterling Safe Haven Strategy detailed in Arkent Scenario-Activating Our Sterling Safe Haven Strategy.

A Short Yen Strategy detailed in Arkent Scenario – Arkent Scenario – The Sun Sets On Japan

A Short Dollar Strategy based on our Arkent Road Map PHASE 3. Arkent Update; The Green Backs Next Moves

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 Q1 2022 that follows the predictions made in our Arkent Road Map. 

3.3  Worst 10 Performing Markets During The Past 24 Months

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The worst 10 in our universe of 80 markets that we cover, shows that our biggest failures have come in predicting the end of the US equity Super bubble. Although our losses have been minimised by consistently excellent trade entry points, they have been worsened compared to the last 24 months with the use of 400% trade sizes. We recognise that picking the precise timing of the high of this bubble is like a giant elephant hunting with a 22 rifle. However, our numerous successes in picking the highs of other summary bubbles over the past 24 months mean that we will continue the hunt. Meanwhile, the other markets in the table is our lower frequency markets and the losses are akin to one or two trades which is tremendously encouraging for our overall performance.

3.3 Specific Macro sector Performance.

3.3.1 Equity Markets

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The chart above shows the HK Index which demonstrates a continued bear trend that should accelerate in Q1 2022..

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Equity Indices have been our worst Macro sector, as we hunted for the peak of the doomsday bubble. Notably, our saving grace has been in our trade locations when using super max sized 400% positions. Our biggest and most notable losses have been in the three strongest of the US indices the NASDAQ (moderate) and the SP500 and DJI which were expensive. Meanwhile, our losses in the weaker European and Asian markets were net-net neutral. We remain short into Q1 2022 expecting the axe to fall in January as phase 3 of our Arkent scenario engages as the doomsday bubble starts to implode.

Notably, All our long-short alpha capture funds performed exceptionally well in Q4 2 were in the top 10% and one in the top 15% of a sample size of some 250 to 390 competitors. This is very significant as a reversal in equity indexes are often preceded by individual shares falling precipitously as we witnessed. More details in our Long short performance appraisal.

3.3.2 FX and Crypto Markets

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The chart above shows our trade capture of the cable which after a messy and complex correction back to the long term diagonal break out point, should now rally strongly  in Q1 2022. 

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The chart above shows our trade capture of the bitcoin, which in our analysis has been trading a wave 4 correction. As such the rally into November 8^th counted as a B wave with the correction which we attempted to short. However, the sentiment was exceptionally bullish as captured by investors polls (consistent with a B wave been termed as the suckers rally) and our disciplined attempts to sell the B wave at 62% and 78% of the A wave failed. However, we were later able to identify the hew high as a B wave irregular high and sell into it with a reasonably tight stop on a super short 400% position. Price action since has conformed to a C wave fall to a sub 30K target zone

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 This quarter demonstrated solid returns across all our currency pairs in cable and dollar-yen. However, the end of the dollar index corrective rally produced an unexpected extension in price the meaning that we exited our long dollar positions early and rolled into a short position early which was expensive in the Dollar index and significantly less so in the Euro Dollar. Hoverer it was  profitable in dollar Swiss and the Yuan. Notably, our short commodity currency trades worked well in dollar Canada and dollar Aussi. Our Bitcoin and other cryptocurrency trade produced excellent returns this quarter. Our main currency strategies are detailed below

A Sterling Safe Haven Strategy detailed in Arkent Scenario-Activating Our Sterling Safe Haven Strategy.

A Short Yen Strategy detailed in Arkent Scenario – Arkent Scenario – The Sun Sets On Japan

A Short Dollar Strategy based on our Arkent Road Map PHASE 3. Arkent Update; The Green Backs Next Moves

3.3.3 Bond Markets

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This sector had a messy corrective quarter with little clear opportunity. The Bund's losses of 182.5 trade units were a result of a give-back from the previous quarters position which had accumulated  very large (record)  returns of 438 trade units

3.3.4 EM Markets

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Dollar Rand is expected to follow the path of Dollar Turkey and 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, civil war and, at best, the succession of the Western Cape.

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The MSCI  reversed from its rally in Q 1 2021 and has since been coiling for its anticipated decline. Notably, the wave 5 extension target of 1464 was met precisely and is the same pattern that produced the 16740 targets on the NASDAQ

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EM equities and currencies moved in our favour as the risk-off trend has built momentum. Dollar Turkish was a massive winning trade and we expect our max sized positions to be very profitable in Q1 2022.

3.3.5 Commodities

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Gold traded in a complex correction that finished in August 2021 and has been trading in the start of a major bull rally since then  We located our supermax long (400%) trades perfectly at the wave 2 low Allowing us to capture substantial returns and to expect Q1 to explode to the upside.

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Our sell at the peak of The Natural Gas panic and continued short during the wave 2 correction demonstrates again how powerful our trading tools are.

Our commodity sector demonstrated diverse and very strong performance over Q4 with excellent returns in our A Safe Haven in Precious Metals Strategy detailed in  Arkent – Activating Our Long Precious Metals Strategy and Arkent Update 2 – Long Precious Metals Strategy in which our trade location at the low of the cycle was perfectly positioned and which by the quarter-end were producing very good returns as are the specific mining shares strategies

An outstanding trade of a short of Natural Gas Panic when it was surrounded by significant panic, and a similarly excellent trade in the agricultural soft sector of Corn completing a beautiful short trade in a wave two corrective decline.

4.0 Alpha Capture Funds And Their Performance

All our long-short alpha capture funds performed exceptionally well in Q4 2 were in the top 10% and one in the top 15% of a sample size of some 250 to 390 of competitors. More details in our Long short performance appraisal.

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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 close. The 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 enhanced. This 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 weakens. This 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

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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 5^th 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

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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

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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

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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

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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

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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.

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We started the quarter bearish Bonds in what we viewed as the 5^th 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 5^th 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

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Dollar Turkish has been rallying strongly continuing a positive return profile

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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

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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.

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

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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.

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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.