• 142 days Could Crypto Overtake Traditional Investment?
  • 147 days Americans Still Quitting Jobs At Record Pace
  • 149 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 152 days Is The Dollar Too Strong?
  • 152 days Big Tech Disappoints Investors on Earnings Calls
  • 153 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 155 days China Is Quietly Trying To Distance Itself From Russia
  • 155 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 159 days Crypto Investors Won Big In 2021
  • 159 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 160 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 162 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 163 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 166 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 167 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 167 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 169 days Are NFTs About To Take Over Gaming?
  • 170 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 173 days What’s Causing Inflation In The United States?
  • 174 days Intel Joins Russian Exodus as Chip Shortage Digs In
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Weekly Review

Valuation:

Following the sharp selloff in Europe at the beginning of 2016, the Sigma European valuation score increased from '3' (neutral) to '4' (attractive).

In US, the Sigma valuation score improved from '2' (unattractive) to '3' (neutral) during the same period. Unfortunately, with the sharp bounce back in US equities during the last 5 weeks, the Sigma valuation score moved back to '2' (unattractive).

STOXX 600 vs Sigma Valuation Scale

S&P500 vs Sigma Valuation Scale


Sentiment:

The spread between bulls and bears slightly decline but there is no major signal at this stage. Nevertheless, it is important to notice the level of uncertainty is very high at this stage because more than 40% of investors are 'neutral' -> this could imply sharp moves in any direction if those 'neutral' investors decide to move in the same direction.

Bull-Bear Spread and Neutral Sentiment


Technical analysis:

The number of companies trading above their 20 weeks moving average (gray curve) sharply increased since mid-February. This situation underlines that the rally is healthy: it is led by lot of companies and there is a high level of participation in this market.

Looking at the new 105 weeks lows (red curve on the first chart), we can notice a sharp decline on this chart. The red curve is close to its zero line.

It is also interesting to notice that new 105 weeks highs are slightly rising week after week. This means some stocks are already able to print new long term highs. Those stocks are the ones to detect because they are the new market leaders.

Market Breadth

The technical score remains at '2' (unattractive) in Europe and at '3' (neutral) in US.

Sigma EU Market:Technical Score

Sigma US market: Technical Score

Looking at both the Sigma Whole Europe Index and the Sigma Whole US index, we can notice those indexes are close to major resistances. We don't believe they will be able to break those resistances without a consolidation. The rally seems overextended at this stage.

Sigma Whole Europe Index

Sigma Whole US Index


Conclusion:

After Mario last week, Janet was also able to boost the market with some dovish comments. Nevertheless, this dovish statement had a major impact on the forex and this put some selling pressure on European equities.

The pullback we have been waiting for a couple of sessions didn't materialize but we don't change our view: the rally seems overextended and we need some kind of consolidation.

 

Back to homepage

Leave a comment

Leave a comment