2017
Yet 2017 starts with quite a new tone. The impact of
November’s events dissipates through January and February and the amount of trade in the index is
likely to noticeably increase.
However there are long term financial worries plaguing the
market now and I don’t expect a major recovery in this period.
March to May continues the theme, but accompanied by issues
related to one or more of the falling; technological glitches, monetary rate
changes or trade in small questionable companies. It is possible that falls
could be quite large on some days around April.
The above still holds in June to August, any index movements
may be magnified. But this period, while not relinquishing the
above themes, may also see a wider change in sentiment regarding the whole
market, which should become more obvious by the year end.
However there are some restrictions that reduce the level of
trade especially when compared with the
early months of the year.
September to November still see the same mood ongoing. With
still more issues arising relating to the matters discussed under March to May
above.
September is a time of tricky problems which will probably
hold the index down. But October is batter and November may even see some
overreaction.
December sees a focus on the long term changes in sentiment.
There could well be a big shake out the index, to clear the decks for the
coming decades. The market is trying to
think bigger.
It is certainly still
a time when all sorts of events of the nature already described will cause volatile
shifts in value.
2018 seems to be characterised by the idea of adjustments.
January and February, though are more radical than that.
Although there are not many changes to the conditions of 2016 there are some.
Mostly the picture is mixed and values flat but there is a high likelihood of a
major surprise which causes big movements, including a turning point in the
trend in the short term.
This reverses and indeed may even be a bigger shift in March
to May. These months are all about volatility and excitement. However there is
sufficient restraint on the part of investors to ensure that things don’t get
totally out of hand. In some ways it is all a storm in a teacup.
June to September see a return to the long term trend which
has a definite tendency to drag the index down. Investors may be a bit
disillusioned now and might even not
respond to the good news.
However by the end of September the market sees more action
in the form of a final of three key turning points.
October to December, then, is back to the trend. Although
the signs continue to be mixed, this is quite a positive period and
particularly towards the end of the year there looks to be enough momentum to
take the market noticeably higher.
2019 continues the theme of adjustments, but now these can
be accompanied by bigger changes.
January to March sees a lack of clarity about the future.
There are completely offsetting negatives and positives which suggest a market
going nowhere fast. But there is also a lot of trade – just on balance it makes
no difference to the overall value.
April to July sees the picture dominated by fear. Although
the short term signals still offset, it is the long term fears that dominate.
This alone could lead to a short term sell off.
August to November is more representative of the general
themes of the year- with small adjustments being made operationally and in
value terms.
The early part of the period has the most positive
sentiments- and could to some extent improve the picture from July. But later
on in the period there is a lot of trade again and although investors are in a
positive mood they are also discriminatory in what they are buying.
The indications are the January and February 2020 will be
quite different in tone from 2019. It may be back to some of the earlier
questions, on rates etc. but more likely it’s all about the index detail of the
index and all the small companies again. A fall out of the weak is almost
guaranteed. Otherwise, the period is a time when whatever happens it will have
a significant impact on the index. No flat and uneventful months, these.
March to June continues the above themes, But now there is a big shock for
investors. Perhaps a one off or more likely the start of a shake up phase that
lasts into 2021.
July to September sees a return to the conditions of
January. With the major disruption from June continuing on top. It is likely to
be a very disruptive and volatile phase and not suitable for long term large
investment – though short term trading may be rewarding.
October to November should see the conditions finally coming
to some sort of resolution. It isn’t quite as volatile – there are some
stabilising factors, which make this period more constructive. However it
continues to sort the wheat from the chaff.
December is interesting because things are less frantic but
also less clear. It feels a bit like walking into a fog for investors as they’ve not seen conditions like this
before. As a result there is great expectation but challenges in making this
concrete in the form of actual index trading. There may also be a switch between
small and large investors. Probably the market will go no-where this month as
there is insufficient indication about the
future, but it is preparing for 2021’s new environment.
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