Next 20DMF Buy signal

[Pascal]

I received this private message:

Hi Pascal,
It has been a long time since the 20DMF OBOS went below -70. Do you think there's a good (or even great) chance it happens in this correction?

Thanks.

This correction is rather mild: no panic, no forced selling. For the OB/OS to fall below -70, we would need to have the great majority of the sectors in a MF and price downtrend. This means that the OB_OS value attributed to each sector should be negative for almost all the sectors.

I attach below the list of sectors that have a positive OB_OS value.

You can see that the green sectors are interest rate linked. They attract money.
The yellow sectors are defensive sectors (health, utilities).
The pink sectors are linked to cheap oil and a bounce of Nat Gaz.

This means that the market is rotating into either protective or attractive sectors.
Without margin calls and forced selling, it will be difficult to go down into OS.

The 20DMF itself is not that negative.

So, without panic, no selling!


Pascal

[adam ali]

On a somewhat related note, in a FT article this morning about the ECB, the author states: "But Belgium, sometimes seen as a bellwether of Eurozone prospects, has bucked the trend - data this month showed growth resumed in the first quarter, lifted by the strength of Germany."

Any idea(s) why Belgium would be considered a bellwether of EU prospects?

[Billy]

On a somewhat related note, in a FT article this morning about the ECB, the author states: "But Belgium, sometimes seen as a bellwether of Eurozone prospects, has bucked the trend - data this month showed growth resumed in the first quarter, lifted by the strength of Germany."

Any idea(s) why Belgium would be considered a bellwether of EU prospects?

+
Adam,
When compared to other EU countries, Belgium is a small multi-cultural country in the middle of the continent, right between North and South. It is ranking about average for most economic indicators and activity. In that sense, it is often a bellwether of what’s lying ahead for the collective EU countries. Marketing experts also like to test their new products strategies in Belgium prior to investing in a marketing plan for whole Europe. If it isn’t successfull in Belgium, it usually can’t be elsewhere.
Billy

[adam ali]

Thanks, Billy.