Forex Training Blog

The old saw of buying stocks and holding them is being severely tested.  The world’s leading stock indexes all ended the first month of 2010 in red territory.  Investors withdrew more money from U.S. equity funds in the final days of January than in any single week since mid-2008.  Emerging-market equity funds suffered their worst withdrawals in six months.

The bear market rally appears to have peaked, and equities appear to be in the midst of a major downturn.  Rallies are choppy, and fade on light volume.  As selling dissipates, no new buyers are stepping up to the plate.

According to Mr. Husebye, a market veteran and technical analyst, equities are in for a 50-60% correction to the downside from here, taking out the lows of March, 2009.  He further asserts that gold will plummet below US$700., and that copper and other base metals will plunge.  He goes on to say that the Canadian dollar, which is heavily commodity-sensitive, will slip below 87 cents (U.S.) by mid-year.

Robert Prechter, a well-known U.S. forecaster, has already gone on record as declaring that the next phase of the bear market may already have begun.  He is an Elliott Wave proponent - a theory that Mr. Husebye also subscribes to.  Such theorists are warning that the worst is yet to come.

Mr. Husebye’s call is for moving into U.S. dollars and government bonds.

Peter Bain

This entry was posted on Wednesday, February 3rd, 2010 at 4:22 pm and is filed under Blogroll. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.