Time for caution in European Equities

Summary:

European equity index Daily Q Scores have continued to weaken since last commentary, on 28th May, when we highlighted the beginning of a momentum shift. The initial weakness has accelerated and our strongly negative daily scores show a negative trend coupled with negative momentum resulting in a move into the Threat Quadrant, signifying warning due to the negative divergent scores. While the Weekly trend is still positive the momentum is deteriorating and we are watching for continuation leading to a negative trend on the Weekly timeframe.

Expectation: Negative

Europe Indices

Our Stoxx 600 sentiment chart highlights the negative short term momentum of European stocks with 463 of the constituents showing declining daily scores. 

UK Indices

UK Indices are weakest of all the European indices, particularly the FTSE AIM which we expect to continue to deteriorate. UKX has fallen 1.92% so far this week. Until we see a change in momentum in UK Indices we continue to be negative across the board. 

FTSE 100 Daily Chart

Explainer: Q Scores are the scores calculated and displayed for each instrument. There are two scores calculated for every instrument, a Daily score and a Weekly score. The scores range from -10 to +10. 
A Q Signal is a rare but immediately actionable event. It captures the point of exhaustion of the recent trend and signals a possible reversal. They can be used to enter or exit a position on that particular instrument