Index Strat Risk Target FTSE DAX CAC 40
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[U]FTSE 100 [/U][/B]
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Long-term Technical Outlook[/U][/B]
There is little change to the outlook for the FTSE 100. 5 waves down from the 2007 high are complete and A 3 wave advance is underway now. Short term structure is not clear (everything from the March low). Let the pattern play out and we’ll look to identify the end of the correction.
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Short-Term Technical Outlook
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The FTSE is showing signs of topping with an inverted hammer just below a possible triple top at 430131. Further, prices are taking on a rising wedge formation, a setup typically indicative of a bearish reversal. Support is seen at 408957, the wedge bottom, and bolstered by the 100-day moving average.
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[U]DAX 30
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Long-term Technical Outlook[/U][/B]
A 5 wave decline is also complete in the DAX. Short term structure is not clear (everything from the March low). Let the pattern play out and we’ll look to identify the end of the correction.
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Short-Term Technical Outlook[/U][/B]
German shares are showing an inverted hammer just below resistance at the 76.4% Fibonacci retracement level. A downswing from here would target support at the intersection of the 61.8% Fib and the bottom of a rising channel that has contained prices since early March.
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[U]CAC 40 _[/U][/B]
[B][U]Long-term Technical Outlook
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In examining the CAC 40 pattern from the 2007 high, it is possible to count 5 waves down with wave 5 as an ending diagonal. The diagonal is clear on this chart. 5th wave diagonals are almost always fully retraced fairly quickly. As is the case with other European indexes, near term structure is not clear.
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Short-Term Technical Outlook
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The CAC 40 looks to be setting up a rising wedge above formation indicative of a possible bearish reversal in the days ahead. Confirmation is seen with negative divergence on the RSI oscillator and a clear inverted hammer at wedge resistance. Initial support is seen at 304729, the wedge bottom.
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[U]IBEX 35 _[/U][/B]
[B][U]Long-term Technical Outlook
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The rally from the low (6703) is viewed as corrective. Short term structure is not clear (everything from the March low). Let the pattern play out and we’ll look to identify the end of the correction.
[U][B]Short-Term Technical Outlook
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Spain’s benchmark index rebounded from support lower boundary of a rising channel, setting up a potential double top at 90309. An inverted hammer candlestick bolsters this scenario. Initial support is seen at 86817, the channel bottom.
S&P/MIB INDEX
Long-term Technical Outlook
It appears that the Milan index needs at least one more low prior to formation of a longer standing bottom. An impulse (5 waves) appears to be unfolding from the 2007 high. Wave 3 is complete at 12332. I wrote last week that “a wave 4 recovery could be large as initial Fibonacci resistance is not until 19543.” The index is closing in on Fibonacci resistance so beware of a top forming in the next few weeks. RSI is divergent at the recent top as well.
Short-Term Technical Outlook
The MIB Index looks to be confined in a narrow rising wedge, a pattern indicative of a bearish reversal up ahead. Negative divergence on the RSI oscillator bolsters the bearish bias. A break below the wedge’s lower boundary will see support at the 100-day moving average.