I have taken profits today on all remaining stock indices longs, namely Nasdaq, Austria 20, Dax, UK FTSE 100, Hang Seng, Singapore, China and Russia.
The Dax and SP500 reached close enough today to their respective 2007 tops (which is also De Mark’s call for a swing top) for me to decide to take profits. UBS share my view of how things may unfold with a swing top, a pullback and a marginal higher high (on divergence):
Global narrow money suggests a Spring top for global growth, PFS predict a topping out of US economic surprises and through cyclicals a market top around March, and the five models in alignment may not have fulfilled their swing low yet – it could come deeper in late March, before the push up again into mid-year. The pressure swing from new to full moon switches this weekend into to the negative. And so, I have opted to cash in and step aside, leaving long commodities and short treasuries positions, with the large weighting in the former. My expectation remains that stocks should make a range topping process from here into mid-year whilst commodities take over as the outperforming class, as money exits treasuries. The stock indices longs have paid handsomely – now can commodities go on to deliver similarly in a final secular push?