Here below the multi award winning Swiss team’s report.
Despite the “Lowest Bearishness in the US Since 1987″ the Swiss team have issued a fairly bullish report proposing a final leg up to close the year end books.
Its certainly a possibility as price isn’t showing any obvious weakness here.
Their medium term view hasn’t altered. They predict the most likely path is some near team sp500 weakness followed by a final leg up into year end and early q1 with a correction to follow of between 7 to 10% in Q1 2014. The bull market likely has further to run into 2014. They favor a renewal of US$ weakness and over weight allocations to commodities and related themes for out performance.
A quotes from the this report:
“With the strong Friday bounce the US market negated the
bearish Thursday daily candle, which is impressive”.
“With a significant break of the September high we would get a
next projected target in the Dow Jones Industrials at
16328″.
“Gold below 1433, the yellow metal remains in a problematic pattern set up and in this
context we reiterate our worries about the poor medium term
structure in gold, which still suggests the risk to see
another negative surprise in gold and gold mines into
Q1. Generally, a break of the June low at 1180 would
imply another bear move towards 1032 to 1020″.
“Buy China”.
As a general comment, the spread to my own view and the Swiss’s team’s view hasn’t been so wide for some time. I.e. Seasonally i realize we are approaching the run up to the Santa rally period. It would certainly be an unusual time to be short the markets but we have lots of warning signals here flashing. The team this week have failed to cover market breadth issues. They haven’t much mentioned momentum either and the market internal work on sectors is weak again. On the fixed income side of things we see rates are starting to rise even as inflation falls implying real interest rates are rising quickly! What I want to say is that there are many weeks where this bull has previously provided pretty clear signals for a continuation. But alas that is not the case today and the spread or disconnect between price and other indicators has seldom been so wide. In terms of risk on off and chasing price higher a little respect for these issues, at the least, is in order. In my view.
Lets watch the US$, UST 10yr, commodity prices, China and if we can achieve higher highs for the weaker Russel2000 and Nas100.
Without delay here the report.
All the best
Rich
(17 votes, average: 5.00 out of 5)
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