Far East Capital Newsletter
We can bury the 2022 bear market
12 Nov 2022

In This Issue

We can bury the 2022 bear market

There was a powerful rebound in sentiment over the week, confirming the usefulness of the Sentiment Oscillator, the chart of which appears in the Weekly. Adding this to the signals from New York last week means that we can put the interest rate induced bear market of 2022 away, just in time for Christmas.

The market has probably achieved 50% of this current rebound with more to come, but then it will hit the resistance that comes with profit taking and reconsideration of whether or not the enthusiasm has been warranted. Thus you can expect the normal push and pull of markets that will provide the usual trading opportunities, while news flow and new opportunities will give the best performances. The main point is that there is plenty of wind in our sails for the time being.

The market wants to be optimistic and there is plenty of money that will follow the optimism. The better than expected inflation figures from the US will moderate expectations of further aggressive interest rate rises. That will lead to softening of the US dollar, and in turn, improving commodity prices. Remember though, the markets will still be sensitive to any changes in perceptions on inflation and interest rates.

ACDC Metals is an up and coming IPO that has a strong rare earth flavour but it is not relying on the discovery of a new rare earth deposit. Rather, it has a number of mineral sands projects in Western Victoria that have already been identified. These can supply a range of products for the market. Rather than seeing the mineral monazite as being problematic, it intends to use it as feedstock for a proprietary process to recover rare earths.

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