Trading Opportunity

Is it time to bust? A time for market readjustment. I mean, its been a while since the last major crash... Anyway, the Reserve Bank of Australia (RBA) have accused the financial markets in their short sightedness in their factoring in risk and that a significant readjustment may be coming. We have had a long bull run - a long run of stable global growth and inflation. And this situation may have given investors a false sense of security given that global bond yields are well short of their long-term averages. The RBA recently released a quarterly financial stability review and in it they stated: "While the current environment of very low volatility may continue, experience suggests that when economic outcomes are consistently favourable over a run of years, investors tend to underestimate, and thus underprice, risk. It would therefore be surprising if there were not at least some element of this type of myopia in financial markets currently."

Have you missed the boat? Who knows - look at your charts... However, in 2002 the uranium industry was dead. Now it is active as ever, with deals being made to export the commodity with China and plans to export it to India soon coming. Think about this: Paladin increased in price 5 times compared to last year - hows that for returns!?

I personally don't trade the European markets but it seems like they're on the up and up. The ASX recently breaking the 5000 barrier and the Australian dollar falling due to the falling interest rate differential between the Aussie and US rates. Anyway, similar pressures abound the European markets, with interest rates also affecting the market there. Here is the summary of European market indexes overnight: The German DAX 30 edged up 0.4 per cent at 5,914, the French CAC 40 rose 0.6 per cent at 5,180 and the UK FTSE 100 rose 0.4 per cent at 5,959.

The word on the street from Barclays Capital is that the pot oil price is set to rise to US$70 per barrel. Thats the message oil specialists at Barclays Capital are reading in the current resilience of the far forward oil futures (within the framework of the recent sell-down pressure). The simple message is this: "if you could only trade once this year – and that time had to be now – then crude is a clear buy". However, there may be still some more downside to come.