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I’ve been looking at the technical picture only. At 3mths & 6mths, the market looks to have found support and is therefore a buy. There are of course any number of fundamentally based reasons why this is not a great idea: [i] Federal Reserve ending QE is the top of my list [ii] as a direct consequence of that, interest rates [you would think] are set to go higher [iii] valuations are not cheap at circa PE 18.

We have also had a bull market since the bottom of March 2009, which is 5yrs odd. While that in itself is no predictor, it does make you wonder whether you are coming to the end of the line in this cycle.

On the plus side, Europe has just embraced US style QE. Japan continues unabated and China is also loose. There should still be plenty of excess liquidity sloshing around, enough to keep the US going for a while at least.

Technically, for a swing trade duration, I’m a bull. I think we bounce from here. The fundamentals – if they are relevant will come into play gradually over time. New highs will likely not happen. The top will become resistance and the market will roll over again. This dip is buyable, but it may be the last dip. Time will tell.

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