Jean-Yves Dumont, Fund Manager for GaveKal Capital writes: For the last two and a half years since June 2012, the best strategy for global equity investors has...

Jean-Yves Dumont, Fund Manager for GaveKal Capital writes: For the last two and a half years since June 2012, the best strategy for global equity investors has been to buy on dips. The strategy worked because of a very high level of market resilience combined with a (sometimes excessively) optimistic environment. As a result, over the last couple of years markets have tended to recover very quickly from shallow corrections. However October's relatively deep and protracted correction caught investors by surprise. The S&P 500, for example, fell almost 10% in a matter of weeks-something that had not happened in more than two years. In consequence the buy-the-dip strategy did not deliver its expected result. This came as a shock; implied volatility reached an intraday high not seen since late 2011. My method of analysis relies heavily on technical signals, which led me to believe that October's correction would be a game changer...continued: (VIEW LINK)