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Letter 31 – August 26th 2019: Circular references…

We all have suffered in Excel from the famous error: “There are one or more circular references where a formula refers to its own cell either directly or indirectly. … Try removing or changing these references, or moving the formulas to different cells.”  Markets are currently forming a circular reference and explains why equities cannot find a clear outcome.

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Letter 30 – August 3rd 2019: Out of the seven Magnificent, only 3 survive ...

President Trump announced that he would impose a 10% tariff on the remaining $300bn of US imports from China on 1st September. The rosy magificent 7 scenario is now in jeopardy. The return of trade war, the renewed fall of oil and a more hawkish fed have in the last week reduced that probability to 22.6% instead of 45% and induced a marked to market S&P500 fair value of 2809 instead of 3000. Our little model is working accordingly with S&P500 moves with a steep fall from 3030 (our first target or the wave V was 3042) to 2775 (yesterday low on the future).

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