Make hay - and hedge - while the sun shines on our markets, as change may arrive in a heart beatRising US rates and bond yields, plus a strengthening US dollar will sound the death knell to Asia’s equities bull market.
Asia’s current bull market is broadly sustainable, at least for the next quarter or two.
For near term indications of a price reversal, analysts will turn to technical analysis.
Each analyst may have a favourite set of indicators; I prefer to focus on just two:
1. The rate of change in price appreciation - which tends to accelerate irrationally as a blow off top forms and
2. The Advance-Decline measure, which tends to lose breadth in the late stage of bull market.
Medium term risks are best viewed through the prism of valuations.
Utilising standard “first order” valuation measures - price-earnings, price-book, and EPS forecasts - appear somewhat stretched, they are not excessively so; suggesting few signs of stress are apparent
The real risk to Asia’s growth - and by extension, the equity market rally:-
1. the spectre of rising interest rates in the US and
2. the withdrawal of central bank liquidity globally
Source: SCMP
http://www.scmp.com/business/banking-fi ... change-may
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