Global Equity markets.

I have been bearish on the US markets since last January but the markets have completely eluded me. In my previous post on S&P 500 I wrote, “I still think that a correction in S&P500 is imminent. Stock returns are not path independent, which means that the returns of current year are strongly going to be influenced by past performance trajectory. After 5 year bull market a correction is highly likely and technical support their view. I am still bearish on market and will remain so unless S&P500 breaks above the channel line.”

Although nothing has changed significantly since then but while going through the charts of global equity index I found an eerie similarity between them. Most of the global index have hit the resistance of the long term channel line and are looking ripe for correction.

Again a correction may occur tomorrow or after 12 months but the upside from here is extremely limited while the downside can be massive. Hence caution is warranted.