Market analysis: Normalization in process
Market phase: Normalization in process
US: Exposure to US Equity markets 85% / Cash 15% (versus 100% Equity)
Europe: Exposure to European Equity markets 85% / Cash 15% (unchanged)
Our system lower the US equity exposure do 85% from 100%. A solid rebound took place in the Tech segment in yesterday trading session suggesting that strong buying interest remains on market corrections given the backdrop of ample central bank liquidity, but the momentum looks now weakened for a while after a straight 10% sell-off.
One of the main positive catalyst for the Tech/Stay at home stocks rebound may have been the Astrazeneca announcement that it halts vaccine trial after patient struck by illness. The news halted rotation in process towards cyclicals, confirming the safe haven status of the Tech sector when the outbreak situation worsens or in the wake of negative newsflow on new vaccine/treatments.
European indices were led by the Telecoms and Insurance sectors yesterday, in a surprising move as Telecom is so far one of the weakest sector in Europe and use to outperform in "risk off" phases. The ECB meeting today looks significant for the EUR/USD momentum, especially after chief economist Philip Lane statement that the “euro/dollar rate does matter”, but it remains to be seen if the ECB will build on this comments and shift its inflation projections. The European indices looks increasingly sensitive to the EUR/USD momentum.
Our Market Pressure Index now stands at 60/100 (-3), still into the "risk-off" zone (above 58).
The market participation/density is neutral/positive. There is 43% (+4) of major bullish configurations for the Stoxx600 and 53% (+2) for the S&P500, while major bearish trend configurations are 35% (-3) for the Stoxx600 and 29% (=) for the S&P500. Therefore the density analysis reflects a neutral to positive momentum in Europe and in the US (spread now at +8 in Europe and +24 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.
US: Exposure to US Equity markets 85% / Cash 15% (versus 100% Equity)
Europe: Exposure to European Equity markets 85% / Cash 15% (unchanged)
Our system lower the US equity exposure do 85% from 100%. A solid rebound took place in the Tech segment in yesterday trading session suggesting that strong buying interest remains on market corrections given the backdrop of ample central bank liquidity, but the momentum looks now weakened for a while after a straight 10% sell-off.
One of the main positive catalyst for the Tech/Stay at home stocks rebound may have been the Astrazeneca announcement that it halts vaccine trial after patient struck by illness. The news halted rotation in process towards cyclicals, confirming the safe haven status of the Tech sector when the outbreak situation worsens or in the wake of negative newsflow on new vaccine/treatments.
European indices were led by the Telecoms and Insurance sectors yesterday, in a surprising move as Telecom is so far one of the weakest sector in Europe and use to outperform in "risk off" phases. The ECB meeting today looks significant for the EUR/USD momentum, especially after chief economist Philip Lane statement that the “euro/dollar rate does matter”, but it remains to be seen if the ECB will build on this comments and shift its inflation projections. The European indices looks increasingly sensitive to the EUR/USD momentum.
Our Market Pressure Index now stands at 60/100 (-3), still into the "risk-off" zone (above 58).
The market participation/density is neutral/positive. There is 43% (+4) of major bullish configurations for the Stoxx600 and 53% (+2) for the S&P500, while major bearish trend configurations are 35% (-3) for the Stoxx600 and 29% (=) for the S&P500. Therefore the density analysis reflects a neutral to positive momentum in Europe and in the US (spread now at +8 in Europe and +24 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.