The Dow Jones reached 14,009 points last night, close to its historic highs of 2007 (14,198 points). It has more than doubled since the 2009 "hole." total market capitalization ratio US GDP to US gross national product stands at 101.3%, a level considered moderately overvalued, not far from that which prevailed just before the subprime crisis. With this valuation, the annual profitability that can be expected from the market amounts to only a modest 3.4%. August 2011, I told you that I was very optimistic about the market and I had no idea that in the short term it would rise so quickly. I remain bullish in the long term, but I think that now a correction or at least a lull is necessary.
This strong progression of the Dow Jones must nevertheless be weighed against the weakness of the dollar since 2007, which has lost 25% of its value during this period.
The Swiss Market Index remains more than 16% below its historic highs of 2007.
It is therefore advisable to remain cautious in the coming period, possibly looking for a few more opportunities at still affordable prices, and holding onto some cash to take advantage of a correction. Are you ready to profit from a decline, or would you prefer to speculate on the trend?
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Good morning,
I agree, there are significant divergences in the US indices. A correction in February seems likely to me. In any case, on Friday, I bought a Mars $SPX put and for the past week intraday I have been shorting the ESH13 at all the highs.