• Klaus Meitinger

"April weather on Wall Street."

Dear Readers,

Seismograph Feb2018

Since last month, the values of the capital market seismograph have hardly changed. As you know, the team around Professor Dr. Rudi Zagst and Oliver Schlick distinguishes between three phases in the US equity market: "green" (quiet market = buy), "yellow" (turbulent market with positive expectations = invest, but with hedging) and "red" (turbulent market with negative expectations = do not invest).

In the past four weeks, the seismograph's values went up and down in a short sequence - "early" April weather;

On balance, the probability of a calm, positive US equity market ("green") has risen again quite slightly from 68 to 70 percent. The probability of a turbulent, volatile market with a positive trend ("yellow") fell minimally from 8 to 7 percent. The likelihood of a bear market ("red") also fell slightly from 24 to 23 per cent;

"The storm front can still be seen, but it is not approaching", Oliver Schlick interprets the fact that the change in the probability for a bear market has not increased any further, but the absolute level has remained more or less the same. A month ago, Schlick had already pointed out the stabilisation of the situation and increased the share quotas again after the reduction on 13 February. "Nothing has changed," Schlick comments today: "The probabilities for calm and volatile positive markets are still high enough to be cautious. But it is also true that the comfortable times with probabilities for a bull market of well over 90 percent are definitely over. If the likelihood of a bear market were to rise further, the model would again recommend reducing the equity exposure."


The seismograph continues to signal a slight easing on Wall Street. The team around Oliver Schlick and Rudi Zagst calculate the current parameters every four days. Should the situation deteriorate, private wealth readers will be informed promptly under the heading "News from the Editorial Office



Klaus Meitinger

Note: Despite careful selection of sources, no liability can be accepted for the accuracy of the content. The information provided in private wealth is for information purposes only and does not constitute an invitation to buy or sell securities.

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