Rainer's Investment Insights

“World equities have peaked!” In the terrible aftermath of the Paris bombing, I read some commentators referring to the rally since last Monday as a "Patriots' Rally". I am not sure whether this term really is in use, and I can't quite imagine a Patriots' Rally to go round the world! Could someone really be considering a stock market rally as a viable battle strategy against DAESH / Islamic State? And why does the media still indulge the black flag guys by honouring the name they have given themselves? DAESH denotes who they are.  Be that as it may, since that dreadful Friday, global equity markets have been rallying as has the USD. But a continuation beyond today is hard to visualise when you look at the odds stacked against it. Some three weeks ago, I said the rally is almost dead and that in the coming weeks equity trading would be range-bound at best. My portfolio switched to safety on November 5th, one trading day after the global equity peak. I...

US equities have peaked, … but before I pronounce the rally dead – and hail the start to a significant bearish phase, we ought to check how global equity indices have performed in the last 6 months and see if the price structures point to where the markets are headed next.   Santa Rally still to come? I want to pour a little water on the torches of the “Santa-rally-comes-early” torch bearers. Here is a cockeyed comment I had in my inbox this morning: “Should we worry whether the Santa Rally is on for 2015 or not?” it asks. And then goes on to insist that “the short term considerations don’t matter for the long-term investor and his investment goals.” HELLO, this is “My-Diesel-is-Clean” talk and we know what happened to those talkers next. The above chart tells us that Santa’s returns vary greatly depending on the actual period t (t= year end. t+1 then is 1 day to year end, t+2 means 2 days to year end, etc.), and the number of years. The fact that the period...