About maintaining the upward trend I am calm. And there is nothing to talk about yet by a long time. However, we observed a flat correction from March 7 this year, according to my opinion should not be regarded as sufficient, complete correction. Therefore, it's hard for me to understand further increases over the last more than two weeks without a smaller correction. Personally, I think that the correction reaching below 1,730 points, the most should be.
Getting acquainted with a lot of economic data in recent times, can be safely concluded that the data were sometimes good and sometimes bad. There are not reflected in the chart. In my previous posts regarding the SP500 can be found a number of charts and the opinions of investment banks, which clearly pointed to correction.
The only explanation for this situation is the huge inflow of cash into the U.S. equity market without looking at the economic data. so-called. long-term capital. Such an investor looks at the market in the long term and does not care about medium-term correction of up to 10-15 percent. For such an investor has a long-term profit.
"We know institutional asset managers were net sellers during this time and we know that the indiscriminate and non-economic corporate buyback-machine was in full swing but still... who was really the bid day in day out with no sense optimal timing... Thanks to tonight's Japanese flows data, we know... Japanese investors bought the most foreign stocks in that week since 2009..."
"In fact, this is the most stocks that Japanese investors have bought since the week of March 6th 2009... the lows in the S&P 500... but note they were buying in this size at the top... as Lehman collapsed and all the way down..."
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| chart 1. Japanese buing foreign stocks, 2014-06-08 |
I think it's the only reason that explains recent increases. And unfortunately, until they come deserved correction will not recommend long positions in the stock markets.
regards,
oscarjp
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