This “distortion” between “risk” and “return” has created a “bubble” effect in all global equity classes. I informed my subscribers to exit the SPX on Nov. 25, 2014 and to enter cash. Their equity risk exposure was reduced to zero. Momentum oscillators are now extremely overbought and are very clearly trending bearish. I wait for confirmation before entering any new long SDS and long VXX positions.
World stock markets rose on Tuesday, helped by solid corporate earnings in Europe, progress on Greek debt talks, and a new pledge by Japan that it was prepared to weaken its currency. The MSCI All-Country World index climbed 0.4%, the pan-European FTSEurofirst 300 index advanced 1.3 percent, while the MSCI Emerging Market indexalso edged higher.
U.S. fund managers have cut recommendations for equity and bond holdings and increased allocations in alternative investments to near a four-year high as they look for better returns, a Reuters poll found on Thursday.
Investors cut their holdings of stocks to the lowest in at least five years in March, despite a recovery in global equity markets, with euro zone and Japanese assets bearing the brunt as doubts grew about the effectiveness of central bank stimulus.