by Chris Becker
This week’s market action will be characterised by over-reaction to the terrorist attacks in France (and Beirut and Baghdad). This will most likely play out in a race to safety by selling stocks and buying bonds, with possible side bets in oil and other commodities. Historically (and unfortunately all too regularly) whenever these events occur, the race to safety is over quickly and buyers come back, especially in weapons stocks and commodities. War is business after all.
Recapping Asia’s Friday where the Shanghai Composite fell 1.5% after hitting temporary turbulence, amid signs authorities are stepping up their attacks on margin lending.The daily chart shows overbought action here, with a swing down to former resistance, now support at 3300 points possible on oversold reaction to the Paris attacks:
