Turbulence was rife during the past week as more data pointed to the world economy facing a longer and more intense downturn than feared. Global stock markets were beset by angst and plunged by more than 6% in the case of the MSCI Word and Emerging Markets indices, with the only safe havens being the US dollar, developed-market government bonds and gold bullion.

Stock markets are caught between the actions of central banks, governments and the IMF frantically fending off a total economic meltdown on the one hand, and a worsening economic and corporate picture on the other. This situation has a “no-man’s-land” feel to it. By all means try to play a possible year-end rally, but be cognizant that, failing further technical and fundamental evidence, you are trading against the primary trend. Caution is warranted.

That’s the way it looks from Cape Town.