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Debate with ACI UK, The Broker Club & The Commodities Trading Club: Forecasts for the second half – plus marks for first half

This semi-annual debate mixes technical and fundamental analysts who outline their views on major markets for the coming six months and, better still, review the predictions delivered at the beginning of this calendar year. Once again the event was very well attended with members of the STA and many from the three other societies. Drinks after the presentation were very lively and felt a bit like the old Crush Bar at the Royal Opera House!

Sam Horowitz of CMC Markets, who has wide experience across assets, moderated with skill ensuring all four speakers kept to time so that there was adequate time for questions from the audience.

First up was Audrey Childe-Freeman, Chief G10 Currency Strategist for Bloomberg Intelligence. Looking suitably smart yet casual, as one would expect from a senior media professional, she focused on the fact that the key to her outlook this year is her view on the US dollar. This is understandable as her job encompasses macroeconomics and central banking (where she expects interest rate cuts from the Federal Reserve because of a softening US economy). With a brief mention of the ‘Trump 2.0’ possibility, she favours cable. Like so many others today, she now sees the new UK Labour majority as ‘a good thing’, a haven in a sea of so-called populists; quite a surprise for what is usually the world’s most hated currency.

Murray Gunn Head of Global Research at Elliott Wave International was back again and admitted that he’d merely updated January’s charts. A very clever and time-saving tactic, thus illuminating where exactly things had gone pear-shaped, and what was bang on target. ‘’If you want a guarantee, buy a fridge’’, he says of investing. Using the Vanguard World Index as a proxy for stock markets, he suggests that the ‘’bears have given up’’ (on the S&P500) – a warning sign and in stark contrast to the extremely negative sentiment currently in Chinese stock indices. He too expects yields to drift lower over the next six months.

Trevor Neil, STA multi-talented stalwart with professional years too many to number was next, and focused on foreign exchange. Using his firm’s proprietary RRG charts, he too was bearish on the Japanese yen and favoured sterling and the euro. Wryly he said: ‘’It’s always a dangerous thing when we all agree with each other’’. So, a technical analysts through and through also factors in psychology and contrarian thinking. Interesting on his daily candle charts he uses a 7 day period when calculating the Relative Strength Index and the overbought/oversold boundaries set at 60 and 40 respectively.

Last but not least was new kid on the block, Dr Paul Horsnell [Oxford University], Head of Commodities Research at Standard Chartered Bank. He starts off saying that consensus opinion in January this year was wrong (too bearish). For the next six months he sees commodities as a mixed bunch, especially gold, where like Murray he fears that sentiment is too massively positive. He is positive on platinum, iron and ‘bulks’ –commodities where transport costs (read energy) make up a large part of their final price. The bank is currently working on Scorpio, a machine learning new toy for weekly forecasts where ‘’technicals tend to be the major determinant’’ – while for longer term forecast macro is the main man.

A tour de force! Thank you.

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The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.

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