Sunday, October 2, 2011

Market Update 10.02.11

Financial markets have been crazy the past two months. It does not look like it will subside until the European debt crisis and more info about the US economy becomes available.

Either way what does the model say? The model is not predicting another global financial crisis such as in 2008. Ignore the fear that is out there. We find irrational fear is at one of its greatest points in our history since 1970. This means the bottom is close. Also our US measure is close to its financial crisis threshold. When the market moves down 10-20% and then hits the financial crisis threshold it also means the market has bottomed. It is not at the threshold yet but the most we see the market fall is between 5-10%. Not another 2008.

Where do you place your money?

We like select equity markets such as Japan, Mexico, South Africa, Turkey, and India. Treasuries are still bullish.

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