• 10 hours Three Energy Casualties In The Coronavirus Crisis
  • 1 day Markets Crumble As Coronavirus Panic Peaks
  • 1 day Cobalt May Be The Key To Clean Hydrogen Fuel
  • 3 days How Taxpayers Are Bankrolling The EV Revolution
  • 4 days The Coronavirus Is Crushing China’s Car Market
  • 5 days Fighting For Survival In The Streaming War
  • 6 days Want A Job? Forget About A Bachelor’s Degree
  • 6 days Another Major Car Maker Is Backing Hydrogen
  • 7 days Are Americans Finally Sold On Soccer?
  • 7 days Is The Tech Bubble About To Burst?
  • 8 days Coronavirus Could Cost Tourism Industry $80 Billion
  • 8 days What Web Traffic Trends Can Tell Us About The World
  • 8 days Miners Face Greater Headwinds
  • 9 days Boris Johnson Proposes Billion Dollar Bridge To Northern Ireland
  • 10 days Goldman Slashes Oil Price Forecast By $10
  • 11 days Tesla Raises $2 Billion In Share Selloff
  • 12 days What The T-Mobile Takeover Of Sprint Really Means For Markets
  • 12 days The U.S. Has Charged Huawei With Racketeering And Conspiracy
  • 12 days How Hydrogen Could Become The Fuel Of The Future
  • 13 days Millennials Can’t Retire, But They’ll Still Have To Help Their Parents
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