Is this a false signal that some equity markets seem to have restarted higher?

The ups and downs that have characterized the markets since the last week of July. It goes in no particular order and the trends are sometimes different between the major world stock indices. It is difficult in such a context to operate in a multidays perspective (buy and hold for several days), as the possibility of doing the wrong thing is high. It should also be noted that the correlation between the various markets is around 76% and therefore there may be cases like these. But just when the correlation breaks down, we have witnessed lateral phases and continuous false signals. For this reason “we continue to preach caution and advise to operate underweight”.

Is this a false signal that some equity markets seem to have restarted higher? Let’s go and study the situation.

The trading closures on 23 October were as follows:

Dax Future

12.615

Eurostoxx Future

3.184

Ftse Mib Future

19.219

S&P 500

3.465,39

The sample path of our annual forecast fractal

In blue the graph of the world stock exchanges until the close of 23 October.

Our annual forecast for 2020 is in red

The markets have reached a point where the rally could start for about a month.

Is this a false signal that some equity markets seem to have restarted higher?

Here is the price map with which to define the possible moves up / down in the prices.

Dax Future

Weekly downward trend. New lasting rises only with the close of 30 October above 13,018. Very short rebound in progress and new declines only with the daily close of 26 October below 12,493.

Eurostoxx Future

Weekly downward trend. New lasting rises only with the close of 30 October above 3.276. Very short rebound in progress and new declines only with the daily close of 26 October below 3.153.

Ftse Mib Future

Weekly uptrend. New lasting declines only with the weekly close of 30 October below 18,785. Rise in progress and new retracements only with the daily close of 26 October below 18.980.

S&P 500

Weekly uptrend. New long-lasting declines only with the weekly close of 30 October below 3.415. Rise in progress and new retracements only with the daily close of 26 October below 3,440.

From graphic situations of this kind, history teaches that we come out with price explosions that align the various trends in the same direction.

We will proceed step by step and day by day we will study the situation.

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