The commodity markets went parabolic at the end of the 1970’s and peaked in 1980. The Nikkei went parabolic at the end of the 1980’s and peaked in 1990. The Nasdaq went parabolic at the end of the 1990’s and peaked in 2000. Notice that... silver futures prices bottomed our in early 1993 and then began to move higher. Based on Friday’s close it appears as if silver prices are once more on the verge of making a break out to the upside. Notice as well that silver prices bottomed in mid-1982 and then bounced into mid-1983. To us this suggests that... the commodity markets are in good shape after a 20-year consolidation. The Nikkei should do reasonably well for the next few years (similar in some respects to silver in 1993) and the Nasdaq is strictly a short-term bounce candidate that can be bought for a trade but not as a long-term hold.

We are negative on bonds and believe the Tbonds made their final high at 115. We look for a decline down to at least 102- and more probably closer to 98- by the fourth quarter of 2003.

We are dollar bearish and are looking for the DXY to move down to about 92. Our conviction ebbs and flows on this almost daily. We would prefer to see the dollar fall versus currencies like the Mexican peso, Brazilian real, and Cdn/Aussie/NZ dollars rather than strictly the euro.

Commodity prices still look good through all of 2003. Crude oil remains firm. We are still positive on coffee. Cotton futures have run into major resistance. We are watching rice (XAU above 82.5) and beans.

January 8, 2003

A Daily Review of Global Capital Market Trends
Kevin Klombies Editor/Publisher
Email: krk@krk-imra.com
Phone: 1-403-241-2722
Fax: 1-403-241-5764
www.krk-imra.com