US markets continue to show signs of weakness, with no clear trend. However, it’s still premature to talk about a second wave of correction – even less so about a crash:
1. US indices are holding above important support levels, and the 200-day moving average is still upwards-sloping
2. In a crash or a downside correction, everything goes down. Right now, weakness seems rather isolated to the US where valuations are richer and rates are going up
European stock markets, on the other hand, have been at their highest level in two months. This has been helped by the euro weakness, but is probably also due to portfolio rotation from sales of US stocks – proof that investors do not completely flee the stock market.
Euro Stoxx 50 Daily – the index broke above its 200-day moving average on bullish momentum, and could be heading for the highs at 3700.