Gavekal Capital: Down Days on the Rise in MSCI Europe

Thursday, August 7, 2014

Down Days on the Rise in MSCI Europe

While the number of days where MSCI Europe declines by 1% or more remains low by historic standards, that number is rising-- especially since June.  In the past, increases above 15-20 have been consistent with an acceleration in losses:

image

In general, up days represent an increasingly smaller proportion of market moves over any given time period.  More defensive sectors such as Consumer Staples and Utilities have seen particularly large declines:

image

Has the market reached extreme enough conditions to warrant a bounce?  For more on European weakness, see here and here and here.