• 2 days How To Invest In The Cybersecurity Boom
  • 4 days Investors Are Patient With Unprofitable Giants
  • 6 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 8 days 5 Stocks To Keep A Close Eye On This Year
  • 9 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 10 days Central America Is Ready For The Bitcoin Hustle
  • 12 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 13 days Top Performing Stocks As Inflation Fears Grow
  • 14 days US Airline Stocks Take A Beating On New EU Restrictions
  • 15 days This IPO Could Open Sustainable Fashion Floodgates
  • 16 days Crypto Crime Nets Another $2B Fraudster
  • 18 days This Week’s Hottest Meme Stocks
  • 19 days Why World Markets Should Be Watching Germany Closely
  • 21 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 24 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 25 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 26 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
  • 26 days International Banks Blacklist Afghanistan Following Taliban Takeover
  • 28 days China’s Tycoons Are Getting A Serious Reality Check
  • 29 days U.S. Cannabis Space Heats Up With Telling Tilray Acquisition
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  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