Weekly Markets Thoughts - July 22, 2007

By: Stefan Penkov

Gold finally broke trough! It is still bellow this year’s high but XAU and HUI surpassed their respective 2007 peaks. These are excellent indications for Gold. Even though the gold indexes were lagging the metal over the last 14 months, they lead usually the upcoming waves. The last confirmation will stay the 700$ mark but everything is pointing the start of a new and strong increase. Silver and most of the silver companies are doing great as well. This starting wave should be very profitable and if you are still wondering if you want to jump in, I encourage you to make your diligent research as soon as possible. Things go fast most of the time and if we miss the beginning of the move we could miss 20-40% of it. The commodities are in a major multiple years uptrend and the intermediate waves up are a blessing for those who recognize this fact. Crude oil is pointing higher as well but its increase has been lasting for a while now and is well confirmed.

The weakness of the US$ is obvious for everybody now. We are on the verge of a new chapter for the US dollar index which can go under 80 and stay there for the first time in history. It is computed using a trade-weighted geometric average of six currencies. The six currencies and their trade weights are:

Euro

Japan/yen

UK/pound

Canada/dollar

Sweden/krona

Switzerland/franc

57.6 %

13.6 %

11.9 %

9.1 %

4.2 %

3.6 %

These contract specifications are subject to change. Most of the currencies are strong, leaded by the British pound and the Canadian dollar. The Euro is doing well too but it lucks the strength of the leading currencies.

The stock markets are entering a phase of strong volatility after the recent increases and a sideways move is quite possible during the next couple of months. However, we can expect a good summer performance from the commodities’ markets and the S&P TSX Composite which is heavily resource weighted index.

Investing is a passionate activity. Those investors, who are able to identify and recognize the major trends in the different capital markets, are well rewarded. Traders need to be aware of the major trends as well for better targeting the short term fluctuations.

Good investing and best regards,

Stefan Penkov

About the Author:

With more than 15 years of professional experience coupled with a strong academic background, Stefan Penkov is becoming a reference in the investing field. He kindly accepted to share his markets opinion on a weekly basis. The InvestingHelpToday team is very pleased to have his valuable contribution to the site. You can contact him by clicking here.

Disclaimer: Stefan Penkov is not a registered investment advisor.The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are my current opinion only, further more conditions may cause my opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.

Weekly Markets Thoughts - July 22, 2007 | Investing Articles