Tuesday, 10 August 2010

STOCKS: The rally is almost done

The disconcertingly clear-sighted and belligerent Robin Griffiths, Cazenove Capital's star technical strategist, believes the rally from July has peaked - and with it, the great market rebound which started a year and a half ago.  

Here he makes his bearish call - and takes down a bullish fellow panellist with the relish of a country gentleman murdering a shot of Remy Martin after a particularly good hunt...

My own work, looking at a balance of indicators covering stocks, bonds, commodities and currencies also points towards an impending top, but I'm not quite as ready as Robin is to stamp this rally 'deceased'.  

While a new down-leg may begin today with an announcement of more intervention from the US Federal Reserve, there is a possibility market sentiment will push stocks higher for another week or two.  This will, however, only represent a better opportunity to get positioned for what I anticipate will be a major decline into the autumn.  

Objectively then, my indicators continue to suggest a bullish posture and I shan't be betting on a reversal until they turn bearish.  As soon as they do, I'll post the evidence here.