Uncategorized

European Stocks Advance But Overall Positioning Little Changed

FTSE 100

Long-Term Technical Outlook

I wrote last update that “the FTSE is at risk of at least a pullback if not an outright reversal as daily RSI has rolled over from overbought territory.”  The implications from the above count suggest a drop beneath the March low in order to complete 5 waves down from the 2007 high

Short-Term Technical Outlook

The FTSE has broken above support-turned-resistance at 4307.72 having initially found support at 4225.52, the 61.8% Fibonacci retracement level. From here, prices aim to challenge the 76.4% Fib at 4388.94.

DAX

Long-Term Technical Outlook

The DAX pattern is the same as that of the FTSE 100.  The rally from the March low counts well as wave 4 within the 5 wave decline from the 2007 high.  Moreover, the decline from 5178 (on short term charts) is unfolding as an impulse (5 waves). 

Short-Term Technical Outlook

German shares found near-term support at 46885, a familiar pivot level.  Near-term resistance is seen at 49255, the 50% Fibonacci retracement level.

CAC 40

Long-Term Technical Outlook

The decline from 3400 in the CAC 40 is unfolding as an impulse (5 waves).  Expect weakness below 3097 in order to complete 5 waves down from 3400.  A corrective rally should then unfold before the decline resumes.

Short-Term Technical Outlook

The French benchmark index has been confined to a narrow falling channel after breaking below support at a rising trend line that had guided the CAC since early March. The next leg of the down move sees initial support at the 100-day moving average.

IBEX 35

Long-Term Technical Outlook

The IBEX 35 appears to have already completed 5 waves down from its 2007 high.  Also, the index is at a new high which is unusual given that the other European indexes are off of their respective highs.  One possibility near term is an expanded flat.  This would require a reversal from near current levels.

Short-Term Technical Outlook

The IBEX has apparently broken above resistance at 97447, a double top. From here, prices aim at support-turned-resistance found at the 105711 level.

FTSE MIB

Long-Term Technical Outlook

After reviewing the FTSE / MIB index yet again, the above count seems most probable.  This count, in which a 4th wave has just ended, is more in line with the other European indexes.  Also, the 200 day SMA is holding as resistance.  Favor weakness and a drop below the March low.

Short-Term Technical Outlook

Italian shares found near-term support in the 18442.00 – 18752.00 congestion region and is drifting cautiously higher. Near-term resistance is seen at 19479.98, the 14.6% Fibonacci retracement level.