All of our Market Timing Indicators are now in buy territory (a “Full-House Buy Signal”) and most of our sentiment metrics look very oversold.
The current correction is now comparable in size to the average correction over the last 40 years. These corrections tend to be V-shaped with strong recoveries from the trough.
While markets may stay volatile in the short-run, we think that European equities are likely to be higher in 3M time, as we do not believe that the ongoing economic weakness in EM and China will significantly drag down the European economy.