tag:blogger.com,1999:blog-104806792024-02-28T06:02:39.616-08:00Market CommentaryThis commentary is a culmination of my top-down understanding of the global market. For the bottoms-up perspective see my other blogs.Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.comBlogger179125tag:blogger.com,1999:blog-10480679.post-40780060901058955692015-09-28T23:24:00.000-07:002015-09-29T14:21:24.373-07:00The US & Chinese equity market outlook for late 2015 into 2016
In my last post on 18th August 2015 I forecast that the US and China were destined to enter recession. The reason for saying so is the subject of this article, however it needs to be acknowledged that the recession is destined to be 'short-lived', or simply a 'crisis of confidence'. There is no reason to expect mass employment, or foreclosures. The problem will simply be an absence of spending Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-86792309537033749402015-08-24T20:50:00.001-07:002015-08-24T20:50:07.257-07:00Outlook for China's equity markets
The Shanghai Composite index appears to be in a free-fall. I have just signed off on an article on our sister website 'Critical Media Group', where I describe the outlook for Chinese equity markets.
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Author Andrew Sheldon| Applied Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-84144280465067496172015-08-18T19:43:00.001-07:002015-08-18T19:45:41.198-07:00The prospects of global recession heightened in the Dec-2015 quarterThe Dow Jones is coming under pressure at a time when market pundits are being told to expect a market recovery. What's new? There have been numerous opportunities for equity markets to go into a tailspin, but on each occasion asset prices (equities, property and bonds) have tended to rise. The elusive recovery to date could be attributed to:
The strong equity markets
The housing market recoveryAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-75159337534034625452014-10-10T00:57:00.002-07:002014-10-10T00:58:18.857-07:00The Dow Jones has confirmed a short term correction - looking for more
On the 10th Sept 2014 I warned of a sell-off in stocks, only to withdraw that warning on the 18th Sept 2014, when the market went to new highs. As it turns out, it was a false signal, insofar as the market went back into reversal, and we now have a solid short-term downtrend, that seems likely to take us far lower. Markets down always have a 'pretty pattern' as we see in the first chart below. Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-451409408658410552014-09-25T01:53:00.001-07:002014-09-25T01:53:38.648-07:00Should we be worried about global inflation?
There is a gross straw argument being perpetrated by economists and market pundits, and that is the prospects of 'rising' or run-away inflation, or at least the ominous threat of such. It is important to note two things:
1. Inflation is a monetary phenomenon
2. Inflation is a red herring
3. Commentators don't even know what inflation is
Consider the following article from Ben Eisen at Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-59106720078607419002014-09-18T15:24:00.001-07:002014-09-18T15:24:24.965-07:00Global equity markets restore uptrend and positive outlook
My earlier concerns in anticipation of a Dow 'market correction' proved ill-founded. It turned out to be simply a 'consolidation phase' or channel trend, which has given away to the preservation of the existing trend. During this type I sat out of the market, and to good result. I exited IVR at 3.5c, buying back at 3.3c, in anticipation of some possible drilling results. The results are only Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-42231329904779272972014-09-10T16:10:00.000-07:002014-09-10T16:10:01.182-07:00The prospects for a short term sell off in place - but how severe?
On the 27th August 2014 (2 weeks ago) I gave a warning of a possible correction in equity markets, based on the leading S&P500 Index. The prospect of a correction remains in play. Today, I'm outlining the technical drivers for a correction based on the Dow Jones Industrial Average - which is based on 28 of the leading stocks in the United States. This index is actually a better guide to the Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-77331691032803663192014-08-31T17:05:00.001-07:002014-08-31T17:05:58.787-07:00Investors need to be ready to buy stocks
Given that I am anticipating a correction in the next few weeks, or as soon as overnight. It falls upon those who support my premise to be ready for the correction. That is to say that we want to be fully prepared to buy back into the market, or unwind short positions when the market has reached its bottom. Now, we need to recognise an important distinction between stocks:
1. Blue chip stocks Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-42921933840177160172014-08-27T22:05:00.000-07:002014-08-31T17:06:30.582-07:00An imminent correction in global equity markets is coming
In previous blogs I have alluded to the fact that the next 10-15 years will be punctuated by a succession of boom-bust events. The reason is that the fundamentals for the global economy are very good. The problem is that there is a process of adjustment under-way, and the Fed and other central banks are making sure that it comes sooner rather than later. They are doing so because, having caused Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-43651803770446834862014-08-18T23:05:00.000-07:002014-08-18T23:05:23.852-07:00The market upside is looking a little 'tentative' in the short run
Asset prices are relatively high. In such times, you have to question when or what can undermine them, and what will not. The reality is that the stimulus of the previous few years has meant that conditions are rip for economic growth. There is however considerable concern about the sustainability of that growth given that a lot of the past growth was fuelled by debt finance in the West. You Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-32343294523497749122014-08-02T22:36:00.000-07:002014-08-02T22:36:03.601-07:00Outlook for US & emerging equity markets - the next 6 months and beyond
There is some ominous news around of ebola virus spreading fears. It is improbable that such fears will manifest as any sustainable problem, however there is good reason for people to monitor the issue. There is some good news from China with growth in manufacturing. The job growth in the US was not as positive as expected, however we remain in a low interest rate environment, and the global Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-86068005205318006472014-07-18T18:02:00.000-07:002014-07-18T18:02:46.142-07:00Rebuttal of Krugman's inflation critique
Paul Krugman is an annoying person. He is annoying because his entire modus operandi is attacking neo-conservative idiots on the right, whilst ignoring his own shortcomings. His short comings arise from his:
1. Gross ignorance about economics as a compartmentalised irrelevant economist
2. Engagement in straw arguments, or false dichotomies between left and right when the real game is the Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-27502005230667522892014-07-02T05:14:00.001-07:002014-07-02T05:14:50.226-07:00Gold price forecast-outlook 2014
An analyst at the Overseas Chinese Banking Corp has released a subdued outlook statement for gold prices in 2014. The research note highlights the prospects for stronger global growth and sees tapering from 2015 as buoying the USD. These facts are not in despite, however it is worth noting that:
1. Asset prices are a nascent or hidden form of inflation or deflation. i.e. Inflationary if theAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-71959688889388736272013-12-11T14:48:00.001-08:002013-12-11T14:59:12.452-08:00The Dow rally set to die - where to place your money - I say gold equities
We have long argued that the reason why there is no inflation evident in the Western world is because its being concealed by 'asset inflation'. We are close to a fall in asset prices judging by the Dow Jones Index. Just looking for the Dow to break that 15800 pt level convincingly. I like that the Dow failed to achieve a new high recently. So we have 2 positives:
(i) Gold is the only cheap assetAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-82421943987958411272013-11-12T11:13:00.000-08:002013-11-12T11:13:33.454-08:00Bitcoin exchange hacked in Australia and NZ
About 2 weeks ago I posted an article about Bitcoin, where I drew attention to its inherent weaknesses. No sooner had I done that than 2 problems emerged for these services:
1. A bitcoin wallet was hacked in Australia
2. A bitcoin exchange was hacked in Czechoslovakia
The problem I even raised was not even the foundation for the problem. The problem is that the exchange operators Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-53087081691085773172013-11-05T14:51:00.001-08:002013-11-05T14:51:43.816-08:00Bitcoins - inflation proofing or scamming?
There is growing support for Bitcoin and other crypto-currencies. Stefan Molyneux offers a good explanation of these crypto-currencies. I however am a little more critical of them....in fact a lot more. Whilst one can acknowledge that:
1. There is scarcity in terms of value of Bitcoin - the problem is that the scarcity is only in terms of its 'limited' volume. Even then, I would argue that thereAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-84335396419418210162013-10-17T19:47:00.001-07:002013-10-17T19:47:41.426-07:00Price price rally due - Are you ready - get your gold stocks!
For the last few months we have been waiting for a base support in gold. In fact a 2nd base after gold fell to $1180/oz in June 2013. This second base after some consolidation, marks a foundation for more upside for gold, at a time when there are strong fundamentals in terms of:
1. High asset inflation - Don't believe the 'cost-of-living' inflation numbers put out by governments because 'assetsAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-80315858360135430302013-09-12T19:28:00.000-07:002013-09-15T15:25:59.001-07:00Open Letter to the Australian Future Fund
Dear Mr David Gonski AC (Chair)
cc: Hon Peter Costello AC
13th September 2013
I would like to criticise your investment philosophy. I appreciate that the organisation has some legislative 'rationale' for investing in bonds and the like, but I want to suggest that your organisation has a wonderful opportunity to enrichen Australians. As a mining analyst, I watch as world class Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-83220401282763618162013-08-24T19:55:00.000-07:002013-08-24T19:55:02.708-07:00Understanding inflation in the current context
David Gallaher: "I'd like opinions on the future of inflation in US dollars".'
You won't see inflation (as its measured through the Consumer Price Index) since wage levels are low (because of global wage disparity causing jobs offshoring) and low interest rates. Interest rates are not just to generate new credit/loans, its to keep asset prices high. High asset prices mean less spending on Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-35103547460965537962013-06-27T20:00:00.000-07:002013-06-27T20:00:01.310-07:00Markets set for another correction - Dow going down but less so for ASX
The global market is taking a bit of a hit. Metal prices are collapsing, and this is across the board. Industrial metals are going to take a little time to recover because ultimately the miners of those commodities will need to curtail production, and start undermining their inventories. We can therefore expect 'industrial commodities' like copper, lead and zinc to take some time. I actually Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-83147291088435167802013-06-06T20:40:00.000-07:002013-06-06T20:40:53.092-07:00Investing in uncertain times - diversification not necessarily good
Conventional wisdom is that investing is hard. The reason its hard is that:
1. Timing and term - its not just a question of buying at a good time, but buying at the optimum time so one is validated in uncertain times by subsequent market action.
2. Ignorance - None of us know the entire market. There is always going to be something we don't know. The good news is that we don't need to know Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-49456598834657256492013-04-17T21:15:00.005-07:002013-04-17T21:15:58.783-07:00Market poised for a correction - Dow Jones and ASX equities
The Australian, US and other global equities have enjoyed a very positive and persistent rally over the last few years. The US Dow Jones reached a new high of 18,865 points, and its otherwise been a monumental rally from 6,626 points set in the first quarter of 2009. The market was of course buoyed by stimulus, but in actual fact there are some underlying positive fundamentals which apply to theAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-61832334818585687852013-03-27T16:15:00.000-07:002013-03-27T16:15:18.910-07:00The "Gillard effect" is a global phenomenon
Judging by the latest difficulties Rio Tinto is having with the Mongolian government, one might conclude that the propensity for governments to expropriate more wealth from shareholders is becoming a more popular policy initiative. The Rudd/Gillard government of Australia can take the credit for their 'initiative' in leading the mob mentality towards expropriation.
The clear undesirabilityAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-36663532391413748812013-03-05T15:02:00.002-08:002013-03-05T15:02:57.681-08:00Dow Jones - a great performer?
Reading the NZ Herald, you could be forgiven for thinking that the US economy has re-emerged 'transformed' from the global financial crisis. In the last few weeks, we heard that in the month of January, that the US deficit was positive for the first time in years. A seasonal aberration however it did denote a positive trend. The problem with such news is that:
1. Asia is still growingAndrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0tag:blogger.com,1999:blog-10480679.post-82341963607221862322013-03-05T13:02:00.000-08:002013-03-05T13:03:33.358-08:00Significance of Dow Jones record high
Overnight the Dow Jones broke the previous 2008 high of 14,140 points (end of day data), rising to a new intra-day record of 14,278.87 points. This is positive news for long investors, however it is not yet a convincing break, so I'd not be surprised to see the index collapse back under 14,000 points. It is noteworthy that the S&P 500 index is still 2.2% below its all-time high. The Andrew Sheldonhttp://www.blogger.com/profile/15469120006156639030noreply@blogger.com0