Patrick Artus affirms that European Markets should maybe be priced 25% higher from current levels based on a 3% risk premium differential.
US markets are mostly inflated by share buybacks because this is how the stockholders are remunerated, whereas in France for instance, dividends are on the order of 3.5%.
This is actually a concern. 41% of daily volumes take place toward the last 5 minutes of the trading day. This dries up liquidity and create weird patterns during the day. Price discovery is less efficient in many cases in my opinion. Algos follow last minute execution. Costs are supposedly reduced thanks to some tweaks but this probably leads to some imbalance in...
This has been a new norm for momentum targets and some patterns. Flags keep overextending all the time though, so pay attention to weird handle patterns such as in overextended Cup and Handles, and potential Inverted Head and Shoulders. When this game of greed and short squeeze ceases, QE or not it will be down extremely atrociously in my humble opinion.
You can clearly see the difference in terms of relative strength. The market is easy manipulable ... the algos in pattern recognition are squeezing shorts by creating and following previous patterns that are in "vogue" (Inverted IH&S), sort of bullish flag that are in fact a hidden handle in a Cup and Handle pattern and so forth.
Pay attention to the...
