Analysis of Major World Indices and Commodities 2006

by Ashok Thakwani. February 26, 2006

I have been following Financial Sense since 2000 and have learned more from it about how financial markets operate than through all my academic life. There is no doubt about your views on the big picture -- namely the long-term decline in the US financial markets and the rise of Asia as the next powerhouse. The charts of the respective markets are telling the same story.

In my home country, India, the benchmark BSE Sensitive Index has more than tripled in the last three years along with a strengthening local currency the Rupee. In the past, though our markets did go up, they were not supported by the rise in the rupee.

As a keen reader of your website, I note that the rampant increase in money supply is powering all world indices to major highs. However the American indices have been much slower in their rise as compared to their international peers. One of the best momentum in 2006 to date has been is the Nikkei 225 index and I feel the trend to continue for rest of 2006. Shanghai Composite at 1296.87 has more or less bottomed out, though the momentum would take some more time to build up, maybe by the end of this year.

In the metals sector I feel that Gold will continue to rise though the turnaround-story would be in Palladium, which should produce the best price performance in the current year.

INDEX	CLOSE	NEXT TARGET
Dow Jones Industrial Average	11,061.90	11,700 - 12,000
Nikkei 225	16,101.90	21,000
Nasdaq Composite	2,287.27	3,000
S&P 500	1,289.43	1,550
Gold	$558.40	$607
Palladium per 100 Troy oz	$285.00	$458

Contact Information

Ashok Thakwani
West Bengal, India
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