A farmer allocates assets

Gerry Celaya, describing himself as a small Aberdeenshire sheep farmer, addressed the STA at May’s monthly meeting yesterday. Needless to say Gerry, who used to be a board member of the Society, is no ordinary farmer with a BA and an MA in Economics and having worked for many years as a technical analyst for large financial institutions before founding Redtower Asset Management. Over time he has developed a system of ranking asset classes and their subsectors, an excellent way to think when allocating resources in a multi-asset landscape. I’ve always ranked currencies like football league tables, but Gerry takes this a lot further, with scores up to plus ten for those rallying and minus ten for the bombed out; graduations for those in between. He also explained that traditionally a balanced portfolio tends to hold 60% in equities, 20% in bonds, and 10% each for commodities and cash.

Stressing the need for clean, reliable and sourced data, he outlined his current thinking on a few key markets. Seeing the UK as poised between the US and its wish to raise interest rates, and Europe where the ECB has just embarked on Quantitative Easing, he looked at benchmark ten year gilt yields, and the way the yield curve has steepened over the last 20 days, and how the two’s/ten’s spread at 100 basis points is at a key juncture. He sees sterling strengthening against the Euro to £0.6500-£0.6600 because of these dynamics.

In terms of commodities he believes gold is still in a very long bear trend and is simply sitting on support at current levels. On the other hand he is a lot more positive on London Metal Exchange copper (and some other base metals) where the downtrend since 2011’s peak is probably over. Similarly for Brent crude oil where the rout that started July 2014 is complete and the market should recover towards the $80.00 per barrel area.

But don’t take my word for it. Look out for the video of the talk which will be posted shortly in the member’s area of the STA website by clicking on this link:

www.sta-uk.org

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Posted in General, STA news, Technical Analysis
2 comments on “A farmer allocates assets
  1. Anonymous says:

    Nice to hear something on inter market analysis at the monthly talk.

    • Anonymous says:

      Yes, a real broad brush and truly global sweep. In this global world we really have to take in all the various pieces of the puzzle.

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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.

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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