Sunset Strip | Aussie market shot up on local and global short covering after RBA's dim economic outlook pointed to slower growth, more rate cuts, falling...

Sunset Strip | Aussie market shot up on local and global short covering after RBA's dim economic outlook pointed to slower growth, more rate cuts, falling currency and higher equity/housing markets. Given the trading volume and the broad based substantial move up at these stretched valuation multiples, it is safe to assume that RBA left no doubts in the investors shorting Australia that there will be more cuts to interest rates and currency will come down. The reality is that there is only so much RBA can do and the economic recovery should be driven by the government. Our long term bull market view since May 2013 was based on the fact that interest rates will fall with commodity prices and currency while equity markets will run on high asset prices and dividend yield thematic. Taking profit never delivered negative returns. As a very wise old man once told me life is all about cycles, you evolve with the cycle or the cycle runs over you. (VIEW LINK)