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Market looks oversold as it is clear that we are expecting tapering and rate hikes to come. Virus concerns have eased too. 

Something strange is going on in the markets. I know Halloween has just passed but no, it has nothing to do with any paranormal activities. It is typical that the Cboe Volatility Index $Cboe Volatility Index(VIX)$ trades inversely with the stock market, however, on Friday, I noticed the US stock market (Dow, S&P500, Nasdaq) closed in the green while the VIX surged higher. In fact, the VIX closed at $16.48 or 6.74% higher. That is unusual.The VIX is known as the market’s fear gauge. Basically the market prices of S&P 500 put and call options are used to calculate the market’s expected volatility in a 30-day time frame. With the VIX surging up, this could reflect that investors want to protect their portfolio and therefore they drive up the pric

Finally the announcement by the Fed has arrived - they will begin to reduce the pace of their monthly bond purchases, a process known as tapering, as soon as late November. Markets are cheering with the major indexes closed at record highs, or should we be? A single key word in the Fed statement caused me some concern. The word is ‘expected’. In their statement: “Inflation is elevated, largely reflecting factors that are expected to be transitory”. “Expected to be transitory”, it can also mean elevated inflation may turn out to be unexpectedly lengthier than what we hoped for, right? And this will have impact on consumer spending and the list goes on. Here is why my view that elevated inflation will persist for some time and we are not out of the woods yet. The world’s second largest econo