A Comment -- General Comments From an Expert (A Commentary)

XSB-T (iUnits Short Bond Market) and XBB-T (iUnits Cdn Bond Market) is not a bad way to participate in the bond market. This is a low-risk way of playing but potential returns are going to be low as well. As an active manager he would prefer you to be in a fund or individual bonds.

Gold. All-time high was $1032 set about a year ago and he believes it will break through this. If it does it should continue up to the $1200-$1300.

Natural gas. Short term not very happy with it and is bearish on pricing. Storage space will run out in the next 1.5 months. Surprised it is over $3 and expects below $3 going forward. Great buying opportunity. Not drilling and not spending money on it companies are not getting cash flow in order to drill again so there will be very quick production decline. Not expecting the problem to be cleaned up until the winter of 2010/2011. The longer low gas prices, the larger the rebound.

Oil. Expect it to trade roughly in the current range but couldn't get over $100 at several points of time in the next little while. Running out of cheap oil. Have been a lot of exciting discovery announcements out of Gulf of Mexico, offshore Brazil, offshore Ghana, etc., but it is very expensive.

TSX and S&P 500. Using the 200-day moving average as his guide, he knows that the index has no place to go but up. If you have a rising 200-day moving average, it means we are in a bull market. Short-term traders should pay attention to the 21-day moving average, intermediates to the 50-day and low traders to the 200-day.

Gold. Has tried to get through the $1000 area a number of times and believes it is now doing it. There is a rising 200-day moving average. Point and figure chart for 2008 and 2009 inclusive confirms that it is likely to go to at least $1500-$1600.

Stop/Losses. Everybody should use stop losses. You can eliminate your losses. The major way to eliminate catastrophes. The amount depends on your risk profile. If you are a trader, you want to have it tighter. If you are a long-term investor, a little bit lower. Generally put it at the most recent low from which you went up into a most recent high. It should always be $.10, up $.15 etc. below a round number.

Now that we are up 5+% for September, a shallow correction would be back to 11,000. There is a lot of money on the sidelines. He is increasingly thinking that a correction won’t happen since everyone is expecting it. Market is overvalued for US consumers, but oils, for example, are still attractive. Not putting any more cash into this market right now. If we were to get the correction, he would then.

Market. A lot of people are expecting weakness because of seasonality but he has not seen any evidence of this in his indicators so wouldn't be concerned about seasonality. Most investors are under invested. There is a lot of cash on the sidelines. Every pullback appears to be met by buying underneath the market.

Gold stocks are leading the market and it has started another significantly higher over the last 3 weeks. At some point later in the fall he expects to have to raise more cash and get a lot more defensive. (See Top Picks.)

Oil. Seeing a lot of very positive global economic indicators that indicate things are turning around but there are still some points that are negative. Looking for $80-$85 crude this time next year. For traders there could be a lower point that you could get in on. For longer-term investors, the smaller and mid-cap are pretty interesting places to be right now.

Natural gas. Fundamentally it does not look very good right now but, with any cycle, if you stop drilling for it eventually it will work its way back. Investors should start to slowly nibble their way back in over the next few weeks.

Market. Stock market is saying investors are more hopeful and can commit more to the equity markets but because of the low interest rates, the bond market is saying that things are not good and are going to get worse.

Natural gas. Bullish on gas. Production has been falling by about 30% from existing wells and there is not much drilling because of the low price. Price could double or triple in 1 or 2 years and some stocks are starting to reflect this. Likes low cost gas such as in the Montney. Likes and owns Orleans Energy (OEX-T), Monterey Exploration (MXL-T), Fairborne Energy (FEL-T), Vero Energy (VRO-T) and Insignia Energy (ISN-T).

Small-cap tech stocks. There are a lot of good things to buy and it is very bottom-up driven. He owns Mosaid (MSD-T), CGI (?) and Wi-Lan (WIN-T).