The bear market is not over yet

Chris Watling

Longview Economics

Despite a strong rally from the lows in early February, global equities remain in a Bear Market. The rally from Feb 11th has the typical characteristics of many bear market relief rallies: equities have retraced approximately 65% of their prior losses. Our medium term (1 – 2 month) trading models have swung from BUY/strong BUY back to SELL (see image). Sentiment, having been bearish in late January, is now heading back towards complacency levels (along with the VIX). Anecdotally investors and market commentators, as is typical towards the end of relief rallies, are becoming more constructive again on risk assets. Leading indicators of growth point to a continued slowing in the global economy. Whilst there has been some excitement over better than expected macro data points in recent weeks, that excitement has not translated into a steeper US yield curve (probably the best arbiter of the economic outlook). A flatter yield curve implies less global growth – and, therefore, ongoing weakness in global earnings growth.


MORE ON



1 topic

CEO & Chief Market Strategist
Longview Economics

Longview Economics, founded in 2003 by Chris Watling, is an independent research house based in London, providing three distinct yet interrelated groups of research products: Short and medium term market timing; Long term global asset allocation...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.