I am on the road today tending to a few business matters - in an environment in which South Africa has just seen its third consecutive quarter of negative GDP growth - and the mood is not entirely upbeat.

Back to the yin and yang of equities: I have tried arguing over the past week or two that global stock markets were grossly overbought and out of kilter with economic reality, and therefore ripe for correction - a process I believe has now commenced (also for commodities, and the reverse for safe-haven assets such as government bonds, the US dollar and the Japanese yen). I have also mentioned that we may see at least some degree of reversion to the 200-day moving averages in a number of instances.

It is perhaps premature to say whether we will be dealing with a normal short-term correction or a more significant move threatening the primary trend. However, when considering longer-term data, it would seem that any correction may still be part of an overall bottoming-out process. The chart below shows monthly intervals for the S&P 500 Index since 1998 and conveys an important message when considering the three momentum-type oscillators at the bottom (RSI, MACD and ROC). These are reversing course for the first time since the primary sell signals of 2007 and now either indicate buy signals (or are getting close to them in the case of MACD).

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Source: StockCharts.com

I need to be off to my appointments, but thought I would just share this thought with you while we remain cautious and await Mr Market to offer us stocks - especially in high-growth markets such as China, India and resource-based economies - at more realistic levels.