Mancini Associates: Volatility Creating Opportunities For The Bold
Mancini Associates analysts say that equity markets are increasingly being driven by speculators because of lower trading volumes.
Were finding that there are far fewer longer-term investors in the markets because theyre more or less sitting on the sidelines waiting for the other shoe to drop, said Tony Peters, head of institutional trading.
The (other shoe) the Mr Peters refers to is the widespread expectation that stock prices are too high given the outlook for the global economy but there is acknowledgment at the firm that the any US Federal Reserve decision to conduct another round of quantitative easing will boost share prices further. "We dont think that investors should be completely out of the market because further QE will draw a line under stocks if only temporarily", said a "Mancini Associates" trader.
Equity prices in the US and European markets have shrugged off mediocre economic data to remain at elevated levels but with the debt crisis in Europe still simmering in the background and trade/currency tensions between the US and China mounting, there is a chance that markets could correct sharply.
"Mancini Associates" are thought to hold short positions on several key exchanges on behalf of clients as a hedge for long positions in other markets, most notably gold and silver.