US: Exposure to US Equity markets 100% / Cash 0% (unchanged)
Europe: Exposure to European Equity markets 100% / Cash 0% (unchanged)
There was no follow up on the wednesday's Tech sell off, as the Nasdaq100 ended slightly up in yesterday trading session, even if Apple was the only big Tech ending in the positive territory. The Technology segment's momentum is also currently fueled by a string of IPO's impressive kick off just like Airbnb, that surged by 144% yesterday. In Europe, the Stoxx600 ended lower led by Airlines and Autos due to increasing fears of a "no deal " between the UK and Europe that will impact negatively these sectors, in many ways, while some disruptions are also likely in other areas. However the fall in these cyclical sectors was almost offset by the rise in the Oil & Gas sector, boosted by oil prices rally that is gaining momentum, as Brent rise above $50 for the first time since March, as coronavirus vaccination rollouts is expected to boost demand for crude in 2021 and as Asia's economic recovery is making Chinese and Indian refiners acquire more oil. The relative momentum of WTI prices is strenghtening both relatively and in absolute terms, a positive for Oil stocks including shale oil and oilfield services company. Therefore the bull market continue, driven by its two pillars which remain the "value" segment catching up to its pre-covid level, and high growth mid-size companies in new energies or Technology. A "no deal" may lead to short term correction, that should in our view be an opportunity to jump in. If any correction occurs, we buy the dip.
Our Market Pressure Index now stands at 36/100 (=), into the "bullish" zone.
The market participation/density is positive. There is 56% (-1) of major bullish configurations for the Stoxx600 and 70% (-1) for the S&P500, while major bearish trend configurations are 13% (+1) for the Stoxx600 and 4% (=) for the S&P500. Therefore the density analysis reflects a positive momentum in Europe and in the US (spread now at +43 in Europe and +66 in the US). During risk-on/bullish market phases, the spread is expected to be > 30.