It is to be expected that markets run out of puff during a holiday period. The whole basis of sell in May and go away is predicated on wealthy landowners, who owned the bulk of shares in days of yore, closing up their London houses and retiring to the country for the season. Easter may not be quite such a vacational imperative but the streets of the City are undoubtedly quieter and it is not just the recession.
Recent news has not helped sentiment. The British Chambers of Commerce forecasting unemployment well above three million was something I could have done without and finding a pundit prepared to predict a turn in the fortunes of the economy before the end of the year has become well nigh impossible.
Watching George Soros on television last week saying that the bear market has further to run did not make me feel too comfortable either.
So it comes as little surprise that the market is running into sellers whenever it pokes its nose above 4,000. True, there is plenty of evidence pointing to sufficient bargain-hunters emerging to provide support as we approach 3,500 but it is a very narrow trading range that has been established. It is bound to break out one way or another soon. The question is, will it be up or down? And how far might it travel?
Trying to position portfolios against the conflicting pressures that are assailing markets has become most managers' abiding aim. In the absence of second sight, finding the right mix is proving difficult. Much of the perceived wisdom developed over successful asset allocation strategies has proved to be flawed. These markets have seen governments humbled and investment stars dimmed. It all adds to an unwillingness to take any risk.
Meanwhile, on the other side of the world, evidence is growing of a rebound in activity. Some commodity prices have recovered significantly while workers laid off because of an absence of orders are being brought back.
Microchip output has risen significantly after a most depressed period. Acer, the world's third-biggest computer manufacturer, has reported a jump in orders. Are these true green shoots or merely the end of destocking?
We will find out soon enough but in the meantime, my money has to be on the breakout coming on the upside rather than the down. While I may enjoy some heavyweight support in this positive stance, there are plenty of serious players placing their bets the other way. Aside from the legendary Soros, the analytical powerhouse of Morgan Stanley published a strategy newsletter last week entitled, Bear Market Is Not Over: Selling Today.
They look for three signposts to flash green - earnings, US housing and bank balance sheets. None are. But the fact remains that this global economic setback is hastening the establishment of a new world order.
China truly needs continuing growth to keep its burgeoning middle class on side and to stifle the cries of the massive underclass that still exists.
A slow US recovery will not help but America is no longer the only game in town. In a reversal of the old 19th Century cry, it is time to go East, young man.
Recent news has not helped sentiment. The British Chambers of Commerce forecasting unemployment well above three million was something I could have done without and finding a pundit prepared to predict a turn in the fortunes of the economy before the end of the year has become well nigh impossible.
Watching George Soros on television last week saying that the bear market has further to run did not make me feel too comfortable either.
So it comes as little surprise that the market is running into sellers whenever it pokes its nose above 4,000. True, there is plenty of evidence pointing to sufficient bargain-hunters emerging to provide support as we approach 3,500 but it is a very narrow trading range that has been established. It is bound to break out one way or another soon. The question is, will it be up or down? And how far might it travel?
Trying to position portfolios against the conflicting pressures that are assailing markets has become most managers' abiding aim. In the absence of second sight, finding the right mix is proving difficult. Much of the perceived wisdom developed over successful asset allocation strategies has proved to be flawed. These markets have seen governments humbled and investment stars dimmed. It all adds to an unwillingness to take any risk.
Meanwhile, on the other side of the world, evidence is growing of a rebound in activity. Some commodity prices have recovered significantly while workers laid off because of an absence of orders are being brought back.
Microchip output has risen significantly after a most depressed period. Acer, the world's third-biggest computer manufacturer, has reported a jump in orders. Are these true green shoots or merely the end of destocking?
We will find out soon enough but in the meantime, my money has to be on the breakout coming on the upside rather than the down. While I may enjoy some heavyweight support in this positive stance, there are plenty of serious players placing their bets the other way. Aside from the legendary Soros, the analytical powerhouse of Morgan Stanley published a strategy newsletter last week entitled, Bear Market Is Not Over: Selling Today.
They look for three signposts to flash green - earnings, US housing and bank balance sheets. None are. But the fact remains that this global economic setback is hastening the establishment of a new world order.
China truly needs continuing growth to keep its burgeoning middle class on side and to stifle the cries of the massive underclass that still exists.
A slow US recovery will not help but America is no longer the only game in town. In a reversal of the old 19th Century cry, it is time to go East, young man.
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