Summary
Phil Anderson uses the ASX 200’s sector weighting (financials + materials ~53%) and its late-2023 Mexican Pete breakout as confirmation that the second half of the real estate cycle is underway. Gold’s fresh record highs after forming a new Mexican Pete pattern are presented as a warning signal of economic problems ahead. The email also delivers model portfolio and watchlist updates, including adding GLD and BSL, removing WBC, and revisiting The Lottery Corp as a lesson in emotional discipline.
Key Claims
- The ASX 200’s heavy weighting toward financials (34%) and materials (19%) makes it a useful second-half cycle proxy — confidence: high
- ASX 200 broke out to new highs via a Mexican Pete pattern at end of 2023, slightly ahead of the S&P 500 — confidence: high
- US homebuilder stocks broke out to record all-time highs ahead of the S&P 500 in April 2022, signalling the second half of the real estate cycle was underway — confidence: high
- Gold soared in the second half of the last cycle heading into 2008 and is doing so again now — confidence: high
- Gold making fresh record highs after a new Mexican Pete breakout is a signal that economic problems lie ahead — confidence: medium
- GLD broke above the $320 level, triggering a model portfolio addition — confidence: high
- Bluescope Steel (BSL) has been forming a large Mexican Pete pattern over four years with resistance at $26 — confidence: high
- WBC was removed from the watchlist due to no lower-risk entry opportunity following its breakout — confidence: high
- The Lottery Corp (TLC) stopped out in May but subsequently formed a second valid Mexican Pete setup, illustrating the danger of emotional bias after a prior loss — confidence: high
Mex Pete References
- ASX 200 (weekly, back to 2018): Mexican Pete formation resolved in a breakout at end of 2023, slightly ahead of the S&P 500’s move to new highs
- Gold (USD spot price): Peaked near 3,440 and higher lows; broke out to fresh record highs as of email date
- SPDR Gold Trust (GLD): Mexican Pete breakout above $320 confirmed; added to model portfolio
- Bluescope Steel (BSL, ASX): Large Mexican Pete forming over four years; first peaked at 26 resistance on two occasions in 2025 while making higher lows; watching for breakout above $26
- The Lottery Corp (TLC, ASX): Second Mexican Pete setup formed and held after initial position was stopped out in May 2025
Stock Picks / Signals
- GLD (SPDR Gold Trust): BUY — added to Mexican Pete Model Portfolio on breakout above 304
- BSL (Bluescope Steel, ASX): WATCHLIST — watching for breakout above $26 resistance
- WBC (Westpac Banking, ASX): REMOVED from Australian watchlist — no suitable lower-risk entry found post-breakout
- TLC (The Lottery Corp, ASX): MONITOR — illustrative example; second setup held after prior stop-out in May 2025
Predictions / Forecasts
- Economic problems ahead signalled by gold’s breakout to record highs — directional, no specific date given
- Implicit forecast that banking and commodities sectors (and proxies such as ASX 200) will continue to perform well as the real estate cycle progresses deeper into its second half
Notable Quotes
“Gold is very clearly indicating to you there are economic problems ahead.”
“The market doesn’t care about your feelings… one must discard any emotional baggage that you have with a stock.”