markets and asset allocation

Posted: August 6, 2015 in Uncategorized


I can confirm that Bollinger band are quite tight and VIX is almost at an historical minimum.

These conditions are probe to a sharp “snapback” in ANY direction.

But for August any snapback should be just a “look an admire” fluctuation. Why? volumes are really low and it is just a “dirty dozen” of shares that move the market. So any move will not have the strength to  stay there (whereever it is) for long.

I am quite wary of September as early indications suggests that the FED could really make a move in September. This could spark a sell off in Government bond that could affect any market. Current analysis indicate a max sell off of 15% by late Q3 –  early Q4.

Asset Allocation

Underweight bond – too many uncertainty. Specially in a panic the Bond ETF could spark a massacre as they are easy to sell and there is no volume.

Shares Developed Market – if you are an investor you can stay there. US is expensive on a PE basis and with strong US Dollar. Historically in early rising interest rate US underperformed the other DM Markets. Europe and Japan are my favourite, but currency needs hedging. Australian share are not as bad as deemed. They can be better than US Shares. Specially the offshore earner and dividend. But the major banks have run their race. Change horse!

Shares Emerging Market…waiting a bit but China A share 3,000- 3,500 is a good long term buying opportunity between now and October.

Gold waiting for a basing around 1,050

Oil currently basing


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