Morning Report Wednesday 3 December 2014
The picture is completing fast - I believe the time is approaching to Move into Cash
Recent volatility in oil, iron ore and gold have chewed up all the attention recently, but in my opinion I think international markets are close to a 15% correction. I have shown the text book illustration of stock market cycles in chart 1 and more importantly, where I see the S&P500 within this cycle – I believe a large sharp correction is very close at hand. I read on Bloomberg this morning that Hedge Funds (often active market players) are closing their doors at a rate not witnessed since the GFC as they fail to outperform a US Fed stimulated S&P500, that has risen 92% since October 2011 (Phase 3 of the investment cycle) aided by the massive US Fed stimulus. Why I found this so interesting is the masses often get large investment thematic wrong, primarily due to “Fear & Greed” and I believe they are wrong now.
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