Short-Term Recovery in Stock Markets: A Closer Look

• Following a brief correction in the S&P500 index, market optimism appears to be on the rise.
• However, a longer-term perspective reveals that savvy investors continue to distribute, suggesting the current US market movement may be a mere technical recovery.
• Similar trends are visible in the Nasdaq index and Europe’s Stoxx 600.

Explore the recent short-term recovery in stock markets, the ongoing distribution by smart investors, and the potential implications for various indices worldwide.

Rebounding Optimism in US Markets

Despite the recent correction in the S&P500 index, market sentiment seems to be strengthening. This renewed optimism, however, may be short-lived. A more extended outlook indicates that astute investors are persistently distributing, implying that the current US market movement could be merely a technical recovery. A similar pattern is observed in the Nasdaq index, where optimism is returning, but smart investors continue to distribute.

European Markets: A Return to Optimism?

In Europe, the Stoxx 600 index also shows signs of returning optimism. However, the action has significantly reduced since the beginning of March, which is not a bullish indicator. The individual countries present a varied picture. In Germany’s DAX index, optimism is returning, but accumulation is now only cautious. The British FTSE index maintains a positive sentiment with slight accumulation, while France’s CAC 40 shows strong distribution in the background, triggering a ‘strong action’ that usually brings a countermovement.

Asian Markets: The Hang Seng Index

The Hang Seng Index was last week’s star, enjoying a surge in optimism. However, ‘strong action’ or slight signs of ‘exaggeration’ suggest that the party may need a break soon.

US Gold Miner Index: A Promising Sector

One sector of the US market looks promising again: The gold miner index GDM Index. Despite a recent correction, sentiment never fell into negative territory. On the contrary, our indicator recognized the selling pressure as a very strong ‘exaggeration,’ which usually results in clear counter-movements.

Conclusion

While short-term recovery in stock markets brings a wave of optimism, a longer-term perspective reveals continued distribution by smart investors. This trend suggests that the current movements in various indices may be technical recoveries rather than sustained growth. Investors should remain cautious and monitor these trends closely.