If you frequent a lot of investor forums there seems to be a growing feeling that the stock markets are currently massively overbought. Everyone seems to be of the opinion that we have simply gone too far too soon. So is there likely to be a sell-off this September?

Well the markets are usually fairly weak in September at the best of times but I think there’s every chance that we will see some realism return to the markets. The trouble with this recent rally is that it’s been driven by low volumes during the much quieter summer months. So when volumes return in September you would think that the markets will return to a slightly more realistic level.

Yes the economy is certainly showing signs of a recovery but there does seem to have been an overreaction. We are still a long way off where we were a couple of years ago.

My gut feeling is that there will be a sell-off in the next few months. A few people are predicting massive falls but I don’t necessarily think that will be the case. I think we are more likely to see a relatively small retracement. However looking ahead to the longer term I’m sure the uptrend will eventually continue as the economy continues to recover.

 

 

Filed under: Stocks

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