In a week that was clearly traumatic in equity markets where all indexes fell by 4 %, our Model Portfolio ended the week flat, despite our decision to cover our hedging positions too early.
Since recording a new all-time high on September 21, 2018, the SP 500 fell by -8% and tested its 200 days moving average for the first time since 2016.
Covering our shorts, Going Long China, Japan, India and Chinese Tech.
The sharp correction we anticipated in the past few weeks ( see our post A sharp global correction may be imminent published on Sep 28th ) took place this week, surprising the majority of investors by its violence.
Back in August 2018, we sold all our positions in Indian equities as we were worried about higher interest rates and the overvaluation of the Indian stock market.
The Indian Rupee had started depreciating since January 2018 losing almost 18 % of it value this year. India’s inflation has been rising towards the 4 % markets, forcing the Central Bank to raise interest rates and we see the currency move as having now ended.