• Comments for November 29, 2021

    Fear regarding the new Covid varian had really poor consequences on the equities markets around the world: airlines/travel/leasures stocks were all down, while 'stay-home' stocks bounced.

    It was a clear repeat of last year's Covid fear where no vaccine existed and the only way was to lock everybody down.









    It is however interesting to see that most of 'stay-home' stocks did not attract money on Friday.















    Also, Money is not moving into gold/US Treasuries here. This means that there is more fear of a continuation of the inflationary push compared to a fear of a renewed lock-down.





    Finally, we are now clearly in oversold territory, especially in regards to the small/large caps ratio and the NHNL measures.





    Conclusions:

    I would say to buy fear here, because we do not see yet much money moving out of the markets. However the sell-off occured during a slow half-day session. Hence we need to see what a real trading session will do.

    We can see below that the ratio of sectors that are in a short wait mode is now down to 50%. It could easily weaken further, but the 40% level has been where great buying opportunities showed up in the recent past.

    I am still only long right now.