My wise and learned friend at a major bank equity desk in London still maintains a bullish/upbeat/bargain-picking stance overall
Here’s what he has to say on current scenarios
Being asked from all quarters, where do stock markets go from here?
Despite some severe moves to the downside since Bernanke spoke about tapering and the China-related weakness this week, there are still pointers that suggest you go long with a 3 month view. Indicators says equities are massively oversold and there have been definite signs of bargain hunting this week; hedge funds all seem placed for a bounce; long only funds tell us there are no redemptions going on and the pattern of trading is one of rotation as opposed to capitulation.
How would I play it? Well ,industrials and construction materials have the least Chinese exposure so are the sectors to own, but stay away from metals and miners.
What do you think?