Market Pulse on February 5th

Olivier Rigot, EMC Gestion de Fortune

1 minute de lecture

S&P 500 2648.94 -113.19.

Don’t try to catch a falling knife! This famous motto in Wall Street perfectly illustrates yesterday’s action when active traders tried to find the exit door. A situation we experienced many times in our career. Our model correctly pointed out the internal weakness of the market in January and our risk profile stayed above 80 for a very long period of time, an unusal situation since we developped this approach. In general, when the model has reached an extreme it has to swing to the other side before turning. It already started yesterday with our daily fear/greed index reaching an extreme of fear. The dust has to settle down before getting a clearer picture.

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