While China and Japan remain the strongest equity markets based on their long-term trends, the overall message from Robin Griffiths and Ron William is “own gold, sell equities“.
In Griffiths and William’s latest report for RW Advisory, they warn that the upside for US equities is small yet the downside is huge, exacerbated by the presidential cycle which predicts an average downturn of -10% during the 4 to 5 months leading up to the election (Chart 1). Moreover, Griffiths and William say:
1. The UK’s FTSE 100 is at risk of falling back into 6000 and 5783 having failed to break above 6300. Only a break above 6300 would resume the uptrend.
2. The DAX is capped under a resistance zone (12524 to 12620).
3. ‘Pandemic Gaps’ are also weighing on China’s Shanghai Index, India’s Nifty 50 and Japan’s Nikkei.
Meanwhile, the short-term outlook for Gold has turned positive and is challenging its multi-month trading range. Griffiths and William think a sustained weekly close above 1750 will resume the previous uptrend above 1800, towards the all-time-high at 1910 (Chart 2).
Read the full report.