Stock Market Correction Is Accelerating: Not Too Late To Trim Positions

On 13 Oct 2012, after watching the close of 12 Oct, I detected signs of a topping of the stock markets via the AUDUSD indicator. The HYG turned bearish on 22 Oct.

http://musingsonwallstreet.blogspot.sg/2012/10/watch-out-for-pull-back.html

Early Nov, things look like stabilising. But after Obama won the elections, the avalanche began. The Hang Seng China Enterprise Index fell by 6.8% from the peak. I believe it will fall another 2 - 5% at most before stabilising. The S&P500 tumbled 8.5% from the peak. The MSCI World fell 6.8%, the Mining Index 8.2%, The Spanish ETF 9.5%.

I believe we are halfway through the correction, although one cannot be sure. It is still not too late to sell those equity funds that are in profits.

The key concern going forward is the earnings outlook, rather than the Fiscal Cliff. The Eurozone has entered a double dip recession. But for those pessimists, look at the US economy: The consumer spending has recovered. In China, the PMI seemed to have bottomed. Two out of three major economies picking up isn't too bad.

I have done most of my selling in Oct and I have hedged my portfolio somewhat. Now I am looking to buy when there are signs of stabilisation.