Hi David, as a relatively new subscriber, it sometimes is somewhat difficult for me to get your meaning. For example, today you repeat your view that there is a non-trivial risk of a 10% correction. On the other hand, yesterday you went long the DAX. So, do I follow your words or your action if I want to understand your feelings about the market? Or is it a matter of different time frames? 

David Fuller's view

Welcome to FullerTreacyMoney and thank you for your email on a matter of clarification.

There is plenty of information in Comment of the Day and Audios, so it can take a while to become fully familiar with the service, although Eoin and I try to avoid ambiguities in our commentaries.  Additionally, we know that not every subscriber will be reading and listening to everything that we post on the site.  However, just like the Chart Library, Comment of the Day and the Audios are there for when you wish to dip into them. 

Yes, I do think that Wall Street is overdue for a 10%+ correction.  That will probably be more of an opportunity than a problem, but it may unsettle people who are not expecting it.  This weekly chart of the S&P 500 has been amazingly consistent, but is losing upside momentum, so it would not take much of a temporary increase in supply relative to demand to pull it lower.  Moreover, most other stock markets around the world have already experienced 10%+ corrections this year.  I believe I made this point in Wednesday’s Audio, and perhaps on other occasions in recent weeks. 

Personally, I would rather buy something I like following a correction, rather than near the highs, especially if it has seen a significant advance. One of the reasons why I repurchased DAX for a trade is that it was well off its high, and near the trend mean represented by the 200-day (40-week) MA.