See global equity market sentiment improving: Richard Ross

While ECB president Mario Draghi's encouraging comments that he is prepared for whatever is needed to preserve the euro and act on surging bond yields cheered markets across the globe, Richard Ross, Global Technical Analyst at Auerbach Grayson stated that markets need to see some action which would help sustain a trend.

In the same breath, Ross added, "That being said, we are actually bullish. We like the action in the euro. We are buyers of the euro, we are sellers of the dollar; we are buyers of commodities and stocks. We think that the talk while cheap, it reflects the improvement that we are seeing in the equity markets." Below is an edited transcript of Ross's interview on CNBC-TV18. Q: Do you think the comment from Mario Draghi turned the mood both in Europe and in the US today?
A: Well that is exactly what got us started in the right direction today. We have discussed in the past that typically we get these unforeseen fundamental catalyst that critical technical inflection points and that is exactly what we have here. The euro catered on the brink of critical support down around that 1.21 level.
The S&P tested the critical support around its 50 day moving average. The emerging markets around the world really sputtered over the recent sessions and recent week. So a bit of good news has given a jolt to this market. We have seen this before where government officials have jawboned the markets higher bringing them back from the brink.
Really we want to see some action, we need to get through some more of this uncertainty once again. Action is what is going to sustain a trend and talk is just going to give us these one day affairs. That being said, we are actually bullish. We like the action in the euro. We are buyers of the euro, we are sellers of the dollar; we are buyers of commodities and stocks. We think that the talk while cheap, it reflects the improvement that we are seeing in the equity markets. Q: On a day, Mario Draghi says we will do what it takes to preserve the Euro Zone. You also have the chief economist at Citi saying that he expects Greece to leave the eurozone between the next 12-18 months and he puts that probability at 90%. Who do you believe?
A: Whether you believe him or not is not the question. That could very well be the case but what is important about this business is discounting. We look into the future. If he is telling investors that he talked to Citi, so other people are starting to factor that into their model. They are basing their investment decisions on net potential outcome. If that's a certainty, let's say it's 100% - investors will put that into their models. While of course there are all these things that we can predict the market's reaction, we are discounting these future events, we all have been talking about this now for three years.
It's not going to come as a big shock to anyone or to Citigroup. They think it's 90%. So it's pretty much baked cake for them. Whether it happens or not, our business goes on. We look in companies here - we break them down, we look at commodities – we break them down. Let's get back to focusing on the fundamentals and that we are seeing here in earning season in the US. The winners are being rewarded, losers are being punished and that tells me that investors are looking past the macro headlines and focusing on the specific company fundamentals. That's the way this business should operate.