Even with the recent pickup in volatility, many investors in U.S. stocks continue to be bullish.

After showing a chart of the E-mini S&P 500 weekly continuation contract, our February Global Market Perspective said:

Investors' record-setting euphoria continued to percolate through January.

Looking at the worldwide financial scene, global exchange-traded funds experienced inflows of $1.22 trillion, a whopping 71% increase from 2020. The inflow torrent continued into the first weeks of 2022, with another $22.5 billion through January 26.

If global investment strategists were forced to invest in just one region, Europe received the highest percentage of votes.

This chart and commentary from our February Global Market Perspective offer the details:

On January 18, Goldman Sachs polled the audience at its 2022 Global Strategy Conference, asking "which equity region will perform best in 2022?" Europe received 36% of the vote, edging out the United States and handily beating Asia, emerging markets and Japan. An equity rout began a few days later, but the "faith of investors in Europe's potential... remains intact."... Meanwhile, a Bank of America survey recently found that global fund managers were placing "record bets on European banks." One prominent strategist summed up the consensus: "This could be a buying opportunity for Europe against the U.S." (Bloomberg, 1/28/21)

However, bear in mind that financial optimism toward Europe was also on display about a year and a half ago.

In July 2020, Bank of America found that a third of global fund managers were overweight eurozone equities. Within a month, the Stoxx 50 began a 12-week, 15% decline.

Yes, the Stoxx 50 staged a significant rally that persisted for more than a year following that decline. Will history repeat itself this time around?

Get the details of our Elliott wave analysis for major financial markets in Europe, the U.S. and the Asian-Pacific by following the link below.