Technical Forecast for US and Euro Stock Markets
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EuroStoxx pushed higher as predicted to reach the 2676/86 target where we saw a chance to sell in to medium term shorts. We over ran a little to 2701 but we warned that we are in a down trend now with heavy losses possible later in the week. We saw heavy losses in the afternoon but this is only the start. We have closed below very important support at 2589/83 so we should now target 2549. Below here look for 2521/19 & quite possibly 2502/95. This market is expected to suffer heavy losses in the days and weeks to come. I have been spelling this out for days if not weeks & it is starting to play out.
Any bounce is seen as a selling opportunity with 2596/00 then 2610/12, possibly 2628/33 achievable but unlikely any further.
Dax rallied a lot further than expected to get very close to a retest of 7888 highs. We now have a double top in place with a target of 7197 in the days and weeks to come. Below 7606 our first target is 7559 then a test of Feb lows at 7536 & further good support at 7528. Watch for a bounce in this band today but a close below the 100 day moving average at 7492 signals continued heavy losses this week.
Any bounce is now a selling opportunity with a downtrend expected to be established. 7690/00 then 7738/48 should act as resistance but above here look for 7775/85 to hold.
FTSE headed higher as hoped to test 6365/68 where we warned of a potential medium term top in place now which was confirmed as predicted. The target for the move is 6141/33 in the days to come. Today we look for 6206 & the chance of a bounce but a break of 6194 sees 6174 then our 6141/33 target. However this may not hold & we could continue lower to 6107/00, possibly as far as 6089.
Any bounce is a selling opportunity now that we have established a high & we are expected to trend lower for the foreseeable future. Resistance at 6259 then 6281 could hold but above 6300 we can try shorts at 6316.
S&P as stated last week, has now topped out after a 3 & a half year rally. Yesterday’s bounce was predicted to hit 1520/22 & offer the last chance to exit longs before a heavy sell off lasting through until Easter. We reached 1524 in fact & then collapsed so the scenario is playing out as expected. Today we have good support in the 1485/82 area & we could see a bounce from here to target 1492 then 1498. Any rally is seen as a selling opportunity going forward with 1420 expected to be the first major target for the move lower. If we push through 1503 today however look for 1508 & what could be the top.
A break of 1480 however targets 1475/73 & if we continue lower through 1470 look for 1460/57.
In the longer term we have a frightening head & shoulders pattern built over a 13 year period and this has horrific implications in the years to come. I really hope I am wrong about this but we will need a break above 1580 to calm my fears & this looks very unlikely now.