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

Man AHL Diversified. British based. Have been running this for about 10 years with fantastic success. Make directional calls on different commodities and indexes. Their skill set lies in following trends.

Bonds. Mid-to long-term (10-30 year) bond rates have run substantially higher, which means bond prices have plummeted. Looks like it may be starting again. If there is a continuation of rising interest rates, investors in bonds and bond funds could suffer a significant amount of loss on their capital. iShares Canadian Long Bond ETF (XLB-T) would be a good one to use.

Trading Up. Buy the top performing stocks based on a growing divergence between the best performers and the rest of the market. Throughout history the strongest stocks have been the ones that continued to hit new highs and made the most money.

Pair Trading. Go Long the stronger companies and Short the weaker companies in the same sector. Money managers will be selling off their laggards and move their money into the strong companies. This can be a dangerous thing in a Bull market.

3-Trade Strategy. If a stock breaks down 5%-10% below what you paid, Sell to protect your capital. If you like the stock his strategy is to have a stoploss with a Buy below the stoploss. Example $20 stock and a $19 stoploss but have a Buy order at $15.

Buy Winners coming out of Bases or Consolidations. There is no money in a Basing pattern. The longer it goes and the deeper it is there are a lot of shareholders that are not happy. As it tries to recover their going to try and sell.

Sell Strategy. Sell when the stock undercuts the uptrend. This fabulous market is not going to last forever and we are getting late in the cycle. The bottom of a trend channel is the 50-day moving average. If it undercuts that is your Sell signal.

Canadian banks. Have had a huge run and expects they will trade in a range for a bit. Will probably experience some losses on their loan portfolios but long-term the banks are phenomenal.

Canada Real Return Bond Dec 2021. This is an asset with pure inflation protection. Unlike regular bonds, real return bonds pay an interest rate that is adjusted for inflation.

Lock in some gains. Look for big, stable, high-income businesses to re-invest in. Base Metals, oils are doing their own thing. By this time next year, we may have cleaned up over capacity in natural gas.

Natural gas. Commodity prices reflecting a more bullish market but he is not sure of that yet. Depends on what winter is like. Storage levels are very full in US and Canada and doubts if we can use it all up this winter. Worries that we come out of winter with 1.5 to 2 TCF of gas left in storage and we start going into the build up season again. Thinks it will take 18 months to recover.

Crude oil. Thinks the price is very fair right now. $60 to $80 a barrel is in the right range. Over the very short term, his bias is negative because there is a lot in storage but long-term the current price is reasonable.

Junior Market. Not in the shape that it once was. Credit crisis impacted them severely. Hot/speculative money has not come back to the Junior market. Also, its audience has shrunk.

Markets. A correction is happening but there is a sector rotation happening, which is why you don't see the correction too much. Banks are going to be weaker and golds continue to be strong creating a rotation, which is why the TSX doesn't go down. The index could come back 10500-10250. This does not mean the end of the Bull market.

Buying Puts on stocks you own is a great strategy for a market like this. A way to pay a small premium today for what could be a disaster down the road. The one caveat is that Puts are not cheap.