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.
Growth in China's fixed-asset investment slipped below 10% for the first time since 2000 in January-May as a boost from record credit growth seemed to be quickly fading, putting expectations of further stimulus back on the table.
With the S&P 500 again coming close to a record this week before falling back, investors will turn next week to a full slate of economic data and a Federal Reserve meeting in hope of fresh reasons whether to drive stocks to new highs.