“It is the 20th anniversary of the invention of the BRIC acronym. My colleague Albert Edwards had an excellent piece out this week answering a question I have had. There will be a time to become considerably more aggressive, but we need improvement to the underlying technicals first. So, as is always the case, be sure to manage your risk exposures accordingly.

Such suggests there is a risk of more selling pressure following any short-term bounce.

While the market is now very oversold, volume remains relatively weak along with money flows. Similar setups to what we’re seeing now have preceded weak returns and win rates on a short and medium-term basis.” “When new lows expand and the market is near a high, something is amiss with market participation, suggesting rising risks. As a result, volatility also spiked into excessive overbought levels, and the market (via SPY) held strong support at the 100-dma (orange line) on Friday. In the short term, selling pressure is starting to peak, and downside risk got reduced given the more extreme oversold conditions. It certainly seems there is little to worry about.Įxcept that dip at the beginning of December.īut is the Omicron selloff over? Omicron Selloff Tests 100-DMA While they remain “snug in their beds, the historical data dances in the heads.” Investors’ “wish lists” are hung by the chimney with care, hopeful the “Santa Claus rally” will soon be there.

Then, on the 23rd of November, we added: Given that most funds are carrying very low cash levels, they will likely have to sell holdings to make those distributions. However, we are entering the mutual fund distribution season where fund managers need to distribution capital gains, dividends, and interest. What would cause such a correction? I don’t know. To wit:ĭoes this mean the market will experience a significant contraction? A pullback to the short-term moving averages would not be surprising and would encompass about a 3-4% drawdown. In mid-November, we discussed the need to reduce risk against a potential correction.

Max payne 3 gamestop