Summary for Week Ending 23rd December 2006

As the year is drawing to a close, the market may see out the year with a whimper and not a bang. Seeing as this time of the year is concerned with bonuses and holidays its understandable that there is little concern for how things will finish up. There will be an entire 12 months next year to ponder such weighty matters. In the short term, what is important is the feast that lies ahead for both the players and the BMW /Mercedes dealerships around the world.

Looking back over the past 12 months, my biggest mistake was to stand in front of a bull market that began in June and not get out of its way until I was firmly convinced of the errors of my ways some 3 months later. Markets have a certain blunt way of telling you that you're an idiot and so it was in 2006.

As for lessons learnt ( as there always is one when your wrong) I believe that my reliance on a given scenario should always contain a flexible exit strategy, a stop loss of some sorts perhaps. After such a good decline I was convinced that we would go sideways and instead the market put in a 17% advance from the June low. This in itself is not remarkable, but needs to be seen in context with opinion which was not particularly bullish and a number of my own signals saying go long. Despite it all, it did go up didn't it. So what's the lesson ? For me, its that even if I'm 100% bearish, if the signal is to go long : Go Long !

No chart this week, we all know what it looks like.

For the considerable number of regular readers I have attracted this year may 2007 be a safe and profitable year for all.


Cheers

Bill Voeten


Next Report will be 20th January 2007.