Bull & Bear
Like most other industries, the stock exchange has developed its own terminology. Many of the e.g. Terms used in business magazines or specialist magazines are quite imaginative and can sometimes trigger uncertainties among “beginners”. However, those who deal with these terms a bit will soon understand what they mean. The often used word “performance” stands for the price development of a market or a value. With “listless” my “Persian” that the trading turnover was low.
Legendary are the characterizations of the . Often one reads, for example, of bulls and bears. “Bullish” is in the jargon for rising prices over a longer period (“The bull is the stock market animal, which throws the courses with his horns in the air.”). The French term for it means “bull market”. The opposite of it, “bearish” or “bearish,” stands for falling prices (“The bear is the stock market animal that beats down prices with its paws.”). With “crash” one calls extreme course crashes. “Asserted”, “held” or “unchanged” means consistent, barely changed courses. “Friendly”, “firm” or “relaxed” tends to describe rising courses.
Shares – bear market rally or new upswing?
The S & P 500 shows remarkable persistence. He found on 11.February stop at a daily closing price of 1830, pretty much tenPercent below the start of the new year. With a series unfavorable Macro data and significantly worsening globally in FebruarySentiment, the index began a rise to last around 1950.The chart (see chart!) Shows that there are two uplines
currently play an important role. The bottom brown line is comingfrom the low of March 2009 and also closes the low of October 2011. On the second, violet, lie most of the other localLows on. The index last found support for the brown at 1830and currently meets resistance on the violet line. His The end of the day on the 26th of February is pretty much the 50s
Retracement of the downward impulse started at the end of December.
When prices do not continue on bad, widely anticipated newsthat is an indication that the big players are in onewant to go up this market. This is confirmed by the course of theVolume distribution on the New York Stock Exchange. Here takes place sinceFebruary 5 accumulation takes place. Typical for this is also theTotal volume decreasing in the course of the accumulation phase (yellow line).Short-term relaxation also signals the VIX (see chart!): The
implied volatility had peaked at just over 30 in the topNow the index is back below its EMA50. The VIX started in the middle December, a sustainable increase over the EMA50w (sliding
exponential mean over 50 weeks). Even before that was the EMA50d (sliding exponential over 50 days) over the EMA50w gone up. The combination indicates instability with the possibility
significant price falls. From this point of view, no one can yetlong-term all-clear.
Invest in quality companies
Rajesh Shant: “At the end of last year, we had an overweight position in the TMT sectors, which was because we identified a number of very well-priced quality companies, such as Ericsson, and Zurich Financial Services (ZFS) was another example of a favorable one Valuation New management, credible new strategies, a strong core business and favorable valuations were the reasons. ”
However, the best performers in the last two months, according to Mellon Global Investments, were companies speculated to be speculative (Ahold 156% from 10 March to 16 May, Delhaize +109% and Commerzbank + 70%).
Corporate bond markets support rally on the stock markets
The decline in corporate bond spreads has enabled refinancing on bond markets for a number of European companies.
The improvement in conditions on the corporate bond markets alone has triggered a positive mood on European stock markets, even those companies that had no plans for refinancing on the bond markets.
Corporate fundamentals count – not just spreads on the corporate bond markets
“What counts for us is the fundamentals and strategy of the management and not cheap financing options for companies that were in big financial difficulties.”
Fundamental Investment Vs. Momentum Investment
For the fund managers of Newton Investment Management, fundamental investment counts and not reacting to momentum indicators.
Important criteria for an investment are:
– improved fundamentals
– experienced and successful management
– favorable valuation as well as attractive risk / return ratio
Quant and chart models need bull or bear markets
It was too easy for the market to forget these fundamental principles, there are approaches that follow quantitative models and charts, but these only work in bullish or falling bull markets, and markets that drift sideways no substitute for good fundamental analysis.