The industrial machine
WE’VE GIVEN two buys on this index: back in May when it was around 43 000 and again in July at around 45 000, and with the index now over 51 000 both these signals have done very well in a relatively short space of time, but now what?
The cry from fund managers is that the market is expensive (I agree on this) and that a pullback is certain (I also agree on this). But here’s the thing, when will we see this pullback and how significant will it be? Fund managers have been calling for a pullback for pretty much the entire year and we did see some weakness around June, but this was seemingly not enough for those unable to find anything to buy.
I am personally long this index and will remain long for now. I’ll keep an eye on 46 360 for the exit level (and this level will be moving higher as the index moves). So for now I continue to hold and a pullback may not even breach my sell level.
* The writer holds STXIND.