Is It A Market Correction Or Just Consolidation?
Cam Hui | May 19, 2014 12:25AM ET
My recent post about risk appetite (see Josh Brown went to the SALT Conference and outlined the Things You Don’t Want To See about this market:
Lots of people are talking about the Things You Don’t Want To See if you’re very long risk assets like stocks and corporate bonds right now. They are all happening at once:
- Collapsing home builder stocks and fading real estate data.
- A US dollar on the verge of ripping to the upside.
- Treasury bonds refusing to back down, nudging their way higher daily.
- A deteriorating number of new highs for individual stocks as the indices flirt with record levels.
- Influential managers who’ve been bullish for most of the rally starting to turn cautious (Einhorn, Cooperman, Tepper, etc)
- Stalling earnings growth.
- Defensive stock leadership
- Huge divergence between small caps and large caps.
Veteran technical analyst David Tepper in a recent interview:
I'm not saying go short. Just don't go too friggin long.
There are really two scenarios to consider for the summer months. Either stock prices correct or they remain in a choppy trading range.
In either case, the upside is limited and the risks are skewed to the downside. So just don`t go too friggin long.
Disclosure: Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. (“Qwest”). The opinions and any recommendations expressed in the blog are those of the author and do not reflect the opinions and recommendations of Qwest. Qwest reviews Mr. Hui’s blog to ensure it is connected with Mr. Hui’s obligation to deal fairly, honestly and in good faith with the blog’s readers.”
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this blog constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or I may hold or control long or short positions in the securities or instruments mentioned.
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