Market Euphoria Cooling, Earnings Positive: CITI’S PULSE Monitor

The PULSE Monitor, an ear to the ground in the market, by Citi analysts Tobias Levkovich, Lorraine Schmitt and Christina Wood, says Price (‘P’) and Earnings (‘E’) continue to rule in positive territory while Sentiment (‘S’) has retreated from euphoric levels to neutral.

Structurally, therefore, the market is in better shape than the previous week, with none of the P-U-L-S-E indicators in Negative territory, as shown below:

Euphoria model downshifted

Citi’s proprietary Panic/Euphoria model downshifted out of the euphoria area into the neutral zone, as shown by the chart below. Compared to last week’s reading of 0.47, the model read 0.42 for this week. Given that euphoric readings presage an...