The document provides technical commentary and analysis of financial markets. It discusses the US Federal Reserve's announcement of quantitative easing (QE3) and the positive market reaction. It predicts emerging markets, commodities, and miners will benefit from QE3 and the weakening US dollar. It recommends positions in gold, silver, platinum, copper, and associated mining companies. Charts are presented analyzing market indexes, currencies, commodity prices, and share prices.

2. Disclaimer
This presentation does not contain and should not be construed as
containing, investment advice or an investment recommendation, or, an
offer of or solicitation for, a transaction in any financial instrument.
Balamory Investments accepts no responsibility for any use that may be
made of these comments and for any consequence that results.
This communication must not be reproduced or further distributed.
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3. Technical Chart Comments
“Central Banks....the weak US Dollar and Sector Rotation”
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4. Technical Comments
• The Fed announced that it will purchase $40 billion a month in mortgage
backed securities which adds to its holdings of long-term securities and ushers
in another round of quantitative easing (QE3).
• Global equity markets have reacted positively to this announcement.
• Emerging markets, commodities and miners should be the direct beneficiaries
QE 3.
• Basic Materials could now well enter a 6-month up cycle, as the rising trendline
for the U.S Dollar Index going back to August 2011, has now been broken to
the downside.
• This recent sharp fall in the dollar will directly benefit commodities, and
especially precious metals.
• Our preferred precious metals basket is gold, silver and platinum.
• Industrial metals have lagged the stock market since June, but are now
starting to play catch up in September. LME copper has rallied 10% from its
lows in early August.
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5. Technical Comments
• Copper and equities are positively correlated, and the recent upward push in
the copper price is positive for equities.
• We continue to like cyclical themes, particularly commodities (metals &
miners) and would use any price weakness over coming weeks to add.
• Big cap diversified miners (AGL, BIL, ARI), platinum producers (IMP, AMS, LON),
coal miners(EXX), iron ore (KIO) and copper (PAM) are all starting to show
some technical improvement.
• The rotation out of defensive stocks into cyclical shares seems to be underway.
• Money flows are indicating that money is moving into the risk-on trade
(emerging markets, commodities, Euro, AUD and CAD).
• The risk-off trade now looks to be topping out, (consumer staples, utilities,
healthcare, U.S. 10-Year Treasury Bond Yield, U.S. Dollar, and the Yen.
• On the JSE, profits are being booked aggressively across high momentum
sectors (general retailers, food and drug retailers, healthcare, banks, tobacco,
and beverages).
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6. Technical Comments
• Based on our bearish call on the U.S. dollar, we are bullish gold, and gold
is now moving up from a 4-year cycle low, and we expect further upside
from gold.
• Since breaking out of a triangle price pattern in the middle of August, gold
is up over $103.
• On a short-term basis, the next upside targets for gold are $1770 and then
the March high at $1791. However, we do caution that gold is getting
increasingly overbought on both our daily and weekly chart timeframes.
We would recommend waiting for a pullback to open new longs.
• On our Gold/Silver ratio chart, silver looks set to outperform gold, and a
tactical bet would be to go long silver via an ETN/ETF or through exposure
to Billiton.
• In terms of other industrial metals, we would recommend going long
platinum, palladium and copper, and to continue building long positions
with exposure to these metals via the big cap diversified miners.
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7. JSE All Share Index <> Best & Worst – 2012
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8. JSE Top40 Index <> Best & Worst - 2012
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9. S&P 500 Index
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10. US Dollar Index
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11. EUR vs USD
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12. Dollar Falls & Commodities Rally
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13. Reuters/Jefferies CRB (Commodities) Index
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14. LME Copper $…….starting to move higher
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15. US Dollar Gold Price
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16. US Dollar Silver Price
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17. Silver / Gold Ratio Chart
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18. Standard Bank – Silver ETN
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19. GLD: Newgold
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20. JSE All Share Index
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21. BHP Billiton
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22. Investec Plc (INP)
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23. FirstRand
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24. Barloworld
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25. Wilson Bayly Holmes (WBO)
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26. PPC
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