Market Analysis - CAC 40, S&P 500, SMI and ATX

Today I will take a look at the CAC 40, S&P 500, SMI and ATX.

The chart of the CAC 40 looks like the EUROSTOXX 50 chart. It is basically in a sideways market since the end of 2009. From last year's summer until now it formed a nice uptrend which lower trendline is at 3800. There is a good chance that this trendline holds as support once again otherwise a test of 3700 is very likely.
Below 3700 the situation would get more bearish and the lows of 2010 could be retested.

The S&P 500 on the other side looks in the longer term picture much healthier and is still above its uptrend. Nevertheless the shorter term trend is clearly down and test of the March 2011 lows, the 200 day moving average and the trendline, all around 1250 should happen next week. I am expecting a rebound back above 1300 in the next four weeks or so, but longer term this could turn out as a big top formation. If the S&P 500 breaks below 1250 the next support is around 1220 to 1225. In my opinion the mentioned scenario is in the cards until the S&P 500 breaks below 1200.

The SMI is like many other European indices in a sideways market since the end of 2009. A very critical level for the SMI is the 6000 level. It acted as support twice and a break below would indicate a move back down to 5200.

The ATX looks a little bit better than the SMI. In December 2010 the ATX broke above 2700 and 2800. This area acted as resistance in 2009 and 2010 and is now support for the index. But be cautious because the bounces off that 2700 level are getting weaker and weaker. A break below 2700 would send the ATX back down to 2400.

Market Analysis - DAX 30, EUROSTOXX 50 and FTSE 100

Market analysis for the upcoming week!

First let's take a look at the XETRA DAX on a weekly chart. Here you can see despite the recent decline the DAX is still in an uptrend. Both the 50 week EMA and the 50 week SMA are around 6800 and as I pointed out in the chart below these moving averages usually hold as support or resistance. Furthermore the trendline of the upward channel is just around 6800.

On a daily chart the situation looks similar. The 200 day moving averages are around 6900 and both the Stochastic and the RSI are showing some positive divergences. For next week I am expecting a last shakeout to the downside before moving back up to at least 7400. For now I think an ending diagonal is in the cards which maybe pushes the DAX up to 7800. The last move up should overshoot to the upside above the upper trendline. If we are testing 6800 to 6900 during the first two days next week I am still expecting a weekly close above 7040. If we are closing next week below 6800 I am rethinking my bullish scenario.

The next chart shows the EUROSTOXX 50 which broke out of its channel to the downside. As I mentioned in one of my last few posts I think the EUROSTOXX is testing the 2300 area during the next few months but for now the index is still in a big sideways correction. In the short term the EUROSTOXX 50 is oversold and should retest 2800. A break below 2700 on a closing basis would indicate a move back down to 2600.

The FTSE 100 is still above its trendline and fighting with its 200 day moving averages. If the FTSE cannot hold this trendline a move back down to 5600 is very realistic. A break above 6100 would give us an upside target around 6400 and a break below 5520 will probably send the FTSE 100 back down to 5000. I am not expecting a breakout of this range between now and the end of August but be aware of these levels.

Market Analysis - EUROSTOXX 50 and DAX 30

Welcome back to my blog. During the last month my schedule was really tight so I was not posting.
The XETRA DAX broke the upward trend and is now forming a bullish continuation pattern. Nevertheless the index is due for a further pullback and so I would watch a break of this flag in every direction. A break to the downside could lead the DAX down to 6850 a break to the upside would indicate prices around the February highs.

The EUROSTOXX 50 broke above its trading channel and also above the highs from 2010. Obviously this level was not sustainable and so it broke back down into the former trading channel. Such false breakouts usually indicate a much stronger move. So watch out. Support should be around 2900 and below that 2750.

Weekend Market Analysis - S&P 500

I just want to show a comparison between April 2010 and now. For this I uploaded two charts of the S&P 500.
You cannot deny the similarity of these two moves. I think that the S&P 500 formed on Friday a similar pattern like on April 27th 2010. But just take a look:

2010

2011

Just watch out! Now the chances for a deeper pullback are very high. Also if you are comparing the sentiment from April 2010 with the sentiment now you will see some kind of similarity.
I do not think that we are just selling off hard the next few days, but after a one to three day pullback I think we will see further selling in the US and European indices. In the S&P 500 I am looking for a pullback to 1225.

Market Analysis - DAX, EUROSTOXX 50 and SMI

Welcome back to the weekend market outlook.
The action of this week was not bullish at all. The DAX broke out to new 52-week-highs but reversed it the other day and in the weekly chart you can see the doji candlestick with higher volume. I would consider shorting the DAX if it breaks this weeks lows around 7000.

The EUROSTOXX 50 had a stronger week but it is now at the top of the bearish wedge and also a declining line from the two tops from 2010 is there. The analysis is still the same, as long as it does not break last year's highs around 3050 I remain bearish. Moreover the RSI is not forming new highs.

The SMI (Swiss Market Index) is still wedging higher and is neutral at best.
I would watch a break of 6400 very closely. A fast move down to 6000 is definetly possible.