[技术分析] U.S. Stocks May Be Starting ‘Correction,’ CLSA Says （Bloomberg)

何鸿燊

By Patrick Rial

Nov. 2 (Bloomberg) -- U.S. equities may be headed lower as technical indicators point to weakness and as economic figures disappoint investors hoping for a recovery, according to Christopher Wood, chief strategist at CLSA Ltd.

The Standard & Poor’s 500 Index dropped 2.8 percent to 1,036.19 on Oct. 30, and is down 5.6 percent from its 2009 peak of 1097.91 on Oct. 19.

Wood noted in a report today that the gauge is below its 50-day exponential moving average, which according to Bloomberg data stands at 1,047.2. Dropping below the average, which differs from a simple moving average because it assigns more weight to recent data points, may be a signal of further declines.


“After Friday’s stock market action, the risk of the first real correction since the March bottom has risen significantly,” Wood, the top-ranked Asia strategist in Institutional Investor magazine’s annual poll, wrote. “Fundamentally, it is also interesting that the American stock market has finally started to respond to disappointing consumption data.”

Commerce Department figures released on Oct. 30 showed Americans cut spending in September, the first reduction in five months. The S&P 500 Index surged 62 percent from a 12-year low on March 9 through to Oct. 19, when it closed at the highest in more than a year, amid signs of an economic recovery.

Rally Today

The S&P 500 rose 0.7 percent to 1,042.88 today as Ford Motor Co.’s profit and gauges of manufacturing, home sales and construction spending topped projections.

“We have made progress,” President Barack Obama said on Oct. 31 in his weekly radio and Internet address. “At the same time, I want to emphasize that there’s still plenty of progress to be made.”

In a Wall Street Journal editorial published last week, Wood argued over-indebted U.S. consumers will be unable to drive economic growth. The strategist cautioned in his report today that it’s not yet clear a “correction” has started, adding that a level of 1,200 on the S&P 500 would have given a stronger indication of overvaluation.

Wood predicted in 2003 that the explosion of mortgage securitization in the U.S. would lead to a boom and bust for the housing market. In September 2007, he began recommending investors sell short banks in the U.S. and Europe. The KBW Banks Index tumbled 50 percent in 2008. Last week, Wood recommended shorting the S&P 500 for investors looking to hedge their long exposure to Asian equities.

‘Buying Opportunity’

“If Asia does its normal thing and corrects more than the U.S., it will mark a great buying opportunity,” Wood said in his report. The MSCI Asia excluding Japan Index has soared 94 percent from a more-than four-year low on Nov. 20.

Not all of Wood’s calls have been as prescient. The strategist said in February 2006 that Japan’s Nikkei 225 Stock Average could climb to 21,000 by year-end on an exit from deflation and pick-up in consumer spending. The Nikkei 225 rose as high as 17,563.37 that year.

One consequence of a correction in equities is likely to be a rally by the dollar, Wood wrote in his report. Gold may also attract investors, he said. The precious metal has surged 45 percent in the past year.

“The carry trade effect will lead to U.S. dollar strength if equities correct globally,” the strategist wrote. “The more bullion outperforms equities, oil and other ‘risky’ assets in a bout of renewed risk aversion marked by U.S. dollar strength, the more it will demonstrate the momentum behind the gold story.”

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.