We believe in rational investment decisions, based on solid analysis drawn from long experience. If there was one point where the professional investor's behavior differs from the amateur's it would be in the ability of the professional to exlcude any "emotional" relationship to the assets, hence take the most rational investment decisions given the return and risk constraints of each client.Market Rally Unsustainable
21 , April 2009
Equity markets have moved up too far and too fast to be sustainable. Economic data from all regions, except for China, remain weak. The SPX has hit a very solid resistance on the 20th of April. We do not believe that the market will go back and test the November or March 9th lows in the downdraft, however, it may very well test the 800 support, hold, and rally from there to at least the 940 level. The picture in the Eurostoxx50 is similar – we should go back down to test the 2115 level which will enable the market to rally to 2600.
In terms of the USD we will probably not see the 1.25 level again anytime soon. Any fall to 1.2750 should be used to sell the USD against EUR. The Swiss Franc is well capped at the 1.50 level as the SNB has made clear its intention to not let the currency strengthen beyond that.
April 20th, 2009 - SPX Friday close 869.60
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