"Finger on sales button."
until Monday, the sky over Wall Street was still blue. Then dark clouds came up incredibly fast. The team led by Professor Dr. Rudi Zagst and Oliver Schlick therefore recalculated the capital market seismograph using current data;
"The stock market barometer still gives the go-ahead for stock investments in the USA. But that can now change very quickly. I have my finger on the sales button," explains Oliver Schlick, who developed an investment model with the seismograph's data (read more: Cool guys, private wealth, 04/2017).
As you know, the scientists distinguish between three phases in the US equity market: "green" (quiet market = buy), "yellow" (turbulent market with positive expectation = invest, but with hedge) and "red" (turbulent market with negative expectation = do not invest).
Currently, the probability of a calm, positive US equity market has fallen from an extremely high 97 percent to 86 percent. The probability for a turbulent, volatile market with a positive trend ("yellow") increased from two to five percent, the probability for a bear market ("red") increased abruptly from one to nine percent. "This is questionable, but has not yet triggered a sell signal," analyses Schlick.
The scientist will now carry out new measurements every four days. "If the likelihood of a bear market rising again in the coming week is similarly sharp, or if it starts to pick up more slowly but steadily from now on, the investment model based on the seismograph would leave the US equity market completely," explains Schlick.
The seismograph signals an uncertain trend on Wall Street for the coming weeks. After the decline in ifo business expectations on 25 January, this is a second warning signal to be taken seriously. We'll keep you posted.
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.