...which I think is set to continue as liquidity seems to be flowing back to US$ dollar assets for now and as stock valuations look stretched.
The long overdue stock market correction is set to continue and according to the charts (see my Blog post yesterday) could see the STI Index test the 2100 or even the 1900......but a retest of the 1485 low seems very unlikely.
Overnight the US markets closed lower although at the start, it seemed that the selling had abated.....but some negative news from the corporate front erased the positive sentiment from the building permits data which came in marginally higher than expected. Market volatility in terms of the Vix index is moving higher probably reflecting more volatile days ahead as investors digest whether the recent rise in equities, especially in emerging markets have been excessive.....we are already seeing some signs of money flowing back into more defensive US$ assets which has brought down the 30-year bond yield slightly. Read more...