Market Analysis - Eurostoxx 50, DAX, S&P 500

After two weeks without a post I am back following the markets. There was not very much action during the last two weeks, low volume and a tight trading range.
What is the overall situation at the beginning of the New Year?
On the one hand there has been an incredible rally since September, on the other hand now the amount of bulls reaches extremes which we have not seen in years.
On the one hand the profits of the companies around the world are further increasing. On the other hand the crisis in the Eurozone does not seem solved. In my opinion it is also a matter of time until the financial markets are focusing on the solvency of the US. Maybe not in 2011, maybe not in 2012 but somewhere down the road also the US will have to consolidate their budget.
I think these fundamentals could result in higher volatility.

Recently I mentioned the 76% retracement around 7075 until now the DAX could not break through it. On the last trading day in 2010 the DAX retraced back to 6900. This level I mentioned too in one of the last few posts. I am expecting a break of the uptrend and a retest of the breakout level around 6350 to 6400.

The EUROSTOXX 50 retraced too and overall it does not look very strong. As I mentioned in one of my first posts the whole action since May 2010 seems to be a bearish wedge and many technical targets are pointing down to the area between 2250 and 2350. From a technical perspective this scenario is off the table if the EUROSTOXX 50 can take out the highs of 2010. For sure the European solvency issue has to intensify to pull the EUROSTOXX 50 down to 2250.

The S&P 500 nearly reached my personally upward target around 1285 to 1287. After that I am looking for a pullback at least back down to 1230 but longer time I still think that we could see the S&P 500 back down in the area around 1120.

Happy new year to everyone! I hope you like my analysis and as always feel free to leave any comments or send me an e-mail.