“DING DONG THE MUSIC IS GOING TO STOP, GRAB A CHAIR UNTIL YELLEN PUT IT BACK ON”

2013 has been a great year for the stock markets. Most major indexes have managed  to  climb into new all time highs even though that Fed has indicated that it will start reducing QE . However 2014 seems to start in a different tempo with emerging markets taking the first hit.  First victims have been South Africa, Indonesia, Turkey and Argentina with their currencies being massively devaluated as investors gets out and speculators take advantage of their vulnerability(see graph below).

I expect the next countries to feel the pressure to be Russia, Mexico, Brazil, Thailand, India, Hungary, Romania and Serbia.

The pressure in the emerging market will result in a risk off mentality amongst the investors and eventually this will also affect the EU, UK, Japan, China and US stock market which will all go lower for the next few weeks.  Probably the signal for a sharp sell of may come this Wednesday after Fed announced another 10billion reduction in QE.

Dow jones is expected to go lower targeting 15,000 and then 13,500 levels as it can be seen in the chart below

 

Greek stock exchange is also going to a correction phase with target 1000 and then 900 level