Equity Wednesday : No Guts No Glory, Remember Oct 87

I am beginning to think its a market plague even as the world has a few real diseases outbreaks to worry about.

BUBONIC PLAGUE
A Chinese town has been sealed off and 151 people placed in quarantine since last week after a man died of bubonic plague, state media said Tuesday.

HUMAN PLAGUE
(Reuters) – Three more people in Colorado have been diagnosed with the plague after coming in contact with an infected dog whose owner contracted a life-threatening form of the disease, state health officials said on Friday

MERS
The MERS virus, which first emerged in Saudi Arabia and has since spread throughout the Arabian Peninsula, the U.S., Europe and Southeast Asia, may be airborne, according to a paper published Tuesday

EBOLA
Since February, an Ebola outbreak has spread from the remote southeast of Guinea across the fluid boundaries of West Africa into Sierra Leone and Liberia

It is official that economic data does not work.

Since end April, all major Citi Economic Surprise indices have returned more negative, for Europe, Australia, UK, Canada, Scandi countries and US.
[the Citi Economic Surprise Indices measure economic data surprises relative to market expectations. A negative reading means that data has been weaker than expected as opposed to a positive reading]

This is to say that economic data has been mostly disappointing.

Coupled with heightened geopolitical uncertainties, we would expect some form of market rationalisation and pull back but the S&P 500 broke out of its double top last night to break a new record high with 58 companies making record highs.

Following suit, Singapore’s STI broke its 52 week high this morning and I am not sure where it is going after this after this big gap up, on pathetic volumes of course.

Thus, it will not be easy to cash out.

But No Guts, No Glory and markets seem to take comfort in the safety of each other, One for All and All for One.

Even if investors run out of reasons for buying, the buying will not stop as companies run their buy back programs and funds still have to deploy their cash and the best reason to buy now is because everyone is still long.

I have been running cautious for a while and am slightly bemused by my friends and associates who are bemoaning their opportunity loss in missing out on the last rally, for both stocks and bonds.

This is a test of resolve, my friends.

No guts, no glory.

I bring up the old chart of 1987 for posterity – the STI and the S&P 500.

Capitulation occurs when everything becomes intrinsically linked, and globalisation has made that a systemic problem, all tied by one major key – monetary policy.

But it takes guts to be underinvested in the current climate. (I have my approaching holidays to thank for it)

Good luck !