Don't Force It...

I've got to tell myself that all the time these days. I am back from the EuroHegde conference in Paris. I thought I was being controversial there, when I said at the global macro panel -- chaired by Gavyn Davies -- that I expected the SPX to have a correction of about 10% from above the 1,300 level down to about 1,200, give or take. I half expected to be hurriedly shown out the door for uttering such preposterous (in an apparent "bull" market) nonsense. It turns out that my fellow panelists, Landsdowne's Richard Davidson (a fellow Morgan Stanley alum) in particular, didn't really disagree with me, which made me nervous!! I hate being part of the consensus view, no matter what that consensus is!

Anyway, be careful out there. It's pleasant and sunny today, but it might well rain or be stormy tomorrow. I don't like the market here, which explains why I am getting out of my longs at these levels. I called it right, but just because I called it so, doesn't mean that I agree with the people who are making my trading view come true -- it's called going with the crowd, for now. Too many people think that the U.S. is in a goldilocks economic scenario (low inflation, great growth), when in fact the business cycle in the U.S. is late-stages mature (almost 4 years now). Look to Japanese equities, some smaller southeast Asian markets and perhaps China (which looks good value to me here) for outperformance this year. The U.S. is going to suffer this year. I am convinced about it, but I am certainly not going to be the first one to short the market (and get taken out, feet first, in the process!!). Wait, wait, wait some more and don't force it. This is my mantra these days. Enjoy your weekend.