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European Markets Technical Outlook
Focus: DAX, Bunds, Euro
Bullish Momentum Evaporates on European Stock Exchanges
Index Strat Risk Target
FTSE Short 5,525 4,350
DAX Short 6,627 4,950
CAC 40 Short 4,559 3,400
FTSE 100
Long-term Technical Outlook
Last update, we wrote that “there is no change to the longer term view. A push above 5569 should encounter resistance from Fibonacci at either 5687 or 5842…long term strategy is bearish on rallies towards the mentioned levels.” The FTSE 100 reversed at 5649 and now finds itself at its lowest since May 2005. There is a Fibonacci confluence near 4,350, which may provide long term support.
Short-Term Technical Outlook
Yesterday we noted that the FTSE 100 stood near trend line resistance. Indeed, prices have bounced lower to find support at 523504, the 23.6% Fibonacci retracement level. A break lower aims at 516281, the 38.2% Fib mark.
DAX 30
Long-term Technical Outlook
Last update, we wrote that “daily structure reinforces our longer term bearish view. A push through 6626 is possible in order to complete wave ii of C, but price should turn down hard afterward.” The DAX 6553.90 and then reversed. The decline should continue until wave C (or 3) is in 5 waves. Potential Fibonacci support begins at 4933.
Short-Term Technical Outlook
Having broken out of a bearish channel, the DAX 30 found resistance at the 63000 level and eased lower. Support is marked at the intersection of channel resistance-turned-support and the 50% Fibonacci retracement level. Near-term resistance is seen at 61237, the 38.2% Fib mark.
CAC 40
Long-term Technical Outlook
The CAC 40 should continue lower towards the level where wave Y would equal wave W (if indeed a double zigzag decline is unfolding). This level is 3390.
Short-Term Technical Outlook
The CAC 40 exhausted bullish momentum having broken out of a Falling Wedge formation, easing past support at the 23.6% Fibonacci retracement level. The bears face the next hurdle at 419446, the 38.2% Fib near the 420000 psychological support level.
IBEX 35
Long-term Technical Outlook
Weakness should continue towards the Fibonacci zone of 8060-9192. The 161.8% extension of wave A is in the middle of this zone, at 8867. The decline has entered wave iii of C, which is usually very fast.
Short-Term Technical Outlook
As we suggested, the IBEX 35 found resistance above 116000 having broken above a Falling Wedge formation. The index broke support at the 23.6% Fibonacci retracement level, with the next significant level at 112085 at the 38.2% mark.
S&P/MIB
Long-term Technical Outlook
Last update, we wrote that “we stand by our call for continued weakness over the long term. As long as price is below 29,598, the decline has a good chance of accelerating.” The drop has accelerated and we expect a test of 23,521 (78.6% of previous rally and 100% extension of the decline from 44364-30062) in the next several weeks. It is possible that a drop to this level leads to a significant bottom.
Short-Term Technical Outlook
Italy’s benchmark index broke out of a Falling Wedge formation but has since lost momentum, easing below support at the 23.6% Fibonacci retracement level. Support is found at 27764, the 38.2% Fib level.
AEX Index
Long-term Technical Outlook
The AEX should continue lower, into the 78.6%-61.8% retracement zone of the rally from 2003 at 267-313.
Short-Term Technical Outlook
The AEX Index has pulled back having broken above the upper boundary of a bearish channel. Prices appear poised to re-test the channel, with a break lower targeting the 38.2% Fibonacci retracement level at 37195.
SMI Index
Long-term Technical Outlook
The Swiss Market Index has yet to break its July low, but it should soon. We expect weakness towards the 100% extension of 9548-6770, which is at 5520. The 61.8% of the rally from 2003 reinforces support just below there at 5242.
Short-Term Technical Outlook
The SMI Index has broken above a Falling Wedge formation. Resistance remains at 703004, the 61.8% Fibonacci retracement level. Initial support at 694586 (50% Fib) has been broken, with the next hurdle at 686168 (38.2% Fib).
CFDTrading.com provides free news, trading resources, and market analysis to the trading community.
Focus: DAX, Bunds, Euro
Bullish Momentum Evaporates on European Stock Exchanges
Index Strat Risk Target
FTSE Short 5,525 4,350
DAX Short 6,627 4,950
CAC 40 Short 4,559 3,400
FTSE 100
Long-term Technical Outlook
Last update, we wrote that “there is no change to the longer term view. A push above 5569 should encounter resistance from Fibonacci at either 5687 or 5842…long term strategy is bearish on rallies towards the mentioned levels.” The FTSE 100 reversed at 5649 and now finds itself at its lowest since May 2005. There is a Fibonacci confluence near 4,350, which may provide long term support.
Short-Term Technical Outlook
Yesterday we noted that the FTSE 100 stood near trend line resistance. Indeed, prices have bounced lower to find support at 523504, the 23.6% Fibonacci retracement level. A break lower aims at 516281, the 38.2% Fib mark.
DAX 30
Long-term Technical Outlook
Last update, we wrote that “daily structure reinforces our longer term bearish view. A push through 6626 is possible in order to complete wave ii of C, but price should turn down hard afterward.” The DAX 6553.90 and then reversed. The decline should continue until wave C (or 3) is in 5 waves. Potential Fibonacci support begins at 4933.
Short-Term Technical Outlook
Having broken out of a bearish channel, the DAX 30 found resistance at the 63000 level and eased lower. Support is marked at the intersection of channel resistance-turned-support and the 50% Fibonacci retracement level. Near-term resistance is seen at 61237, the 38.2% Fib mark.
CAC 40
Long-term Technical Outlook
The CAC 40 should continue lower towards the level where wave Y would equal wave W (if indeed a double zigzag decline is unfolding). This level is 3390.
Short-Term Technical Outlook
The CAC 40 exhausted bullish momentum having broken out of a Falling Wedge formation, easing past support at the 23.6% Fibonacci retracement level. The bears face the next hurdle at 419446, the 38.2% Fib near the 420000 psychological support level.
IBEX 35
Long-term Technical Outlook
Weakness should continue towards the Fibonacci zone of 8060-9192. The 161.8% extension of wave A is in the middle of this zone, at 8867. The decline has entered wave iii of C, which is usually very fast.
Short-Term Technical Outlook
As we suggested, the IBEX 35 found resistance above 116000 having broken above a Falling Wedge formation. The index broke support at the 23.6% Fibonacci retracement level, with the next significant level at 112085 at the 38.2% mark.
S&P/MIB
Long-term Technical Outlook
Last update, we wrote that “we stand by our call for continued weakness over the long term. As long as price is below 29,598, the decline has a good chance of accelerating.” The drop has accelerated and we expect a test of 23,521 (78.6% of previous rally and 100% extension of the decline from 44364-30062) in the next several weeks. It is possible that a drop to this level leads to a significant bottom.
Short-Term Technical Outlook
Italy’s benchmark index broke out of a Falling Wedge formation but has since lost momentum, easing below support at the 23.6% Fibonacci retracement level. Support is found at 27764, the 38.2% Fib level.
AEX Index
Long-term Technical Outlook
The AEX should continue lower, into the 78.6%-61.8% retracement zone of the rally from 2003 at 267-313.
Short-Term Technical Outlook
The AEX Index has pulled back having broken above the upper boundary of a bearish channel. Prices appear poised to re-test the channel, with a break lower targeting the 38.2% Fibonacci retracement level at 37195.
SMI Index
Long-term Technical Outlook
The Swiss Market Index has yet to break its July low, but it should soon. We expect weakness towards the 100% extension of 9548-6770, which is at 5520. The 61.8% of the rally from 2003 reinforces support just below there at 5242.
Short-Term Technical Outlook
The SMI Index has broken above a Falling Wedge formation. Resistance remains at 703004, the 61.8% Fibonacci retracement level. Initial support at 694586 (50% Fib) has been broken, with the next hurdle at 686168 (38.2% Fib).
CFDTrading.com provides free news, trading resources, and market analysis to the trading community.
