To Buy or to sell?

A very interesting point for global equity. Some people must be wondering whether to follow the herd to buy and buy, or to sell and take profit.

A look at the recent trend, all tumbling stocks belong to defensive stocks - look at those stocks falling on Dow - Coke, J&J etc. In Singapore, REIT is tumbling down these 2 days after reaching new highs, and yield is falling to an average of 5%.

The fact that defensive stocks are falling, is good news for future stock trend, as investor are selling these stocks to jump into banking stocks and some cyclical stocks.

All central banks are printing money like nobody business, or lowering their interest rate, and this will continue to flood the stock market and keep it going.

US economy is improving, and my viewpoint is it will not be strong enough to entice Fed to stop the bond purchase, at least in the next 6 months, and this will also keep stocks going and US dollar getting stronger against other currencies. With it, gold and silver will keep falling.

Short Term Outlook: Sell Commodities and Precious Metals (especially Gold). Buy into US banking and cyclical stocks.

Long Term Outlook: Fed pullout will cause a tsunami, keep a lookout on REIT, and commodity stocks while it keeps falling. Some accumulation of gold will be good near 1000 mark.