Technical Forecast for US and Euro Stock Markets
EuroStoxx failed just below 2671 resistance & tumbled back to good support at 2628/26 & this held the downside as predicted. Today we could remain under pressure with a break to target the week’ low at 2612/10 & strong support, including the 200 week Moving Average. A move below 2597 then risks a retest of 2589/83 lows. This remains good support a second chance to buy in to medium term longs in the hope of a double bottom, with a stop below 2564.
2667/71 is resistance and could hold any rally but above here we look for 2690. Sell in to shorts as we look for a high for the week, with a stop above 2700.
Dax futures failed just below 7734/39, our selling opportunity & collapsed in spectacular style allowing us to buy in to longs down to 7614/11. We bottomed just here at 7606 as expected.
7611/06 could be tested again today with a risk of a break lower to 7579/76. A low for the day is possible here but watch for a break to take us towards last week’s low at 7536. Good support from here down to 7525 should be a bargain buying opportunity but we need a stop below 7510 for a test of 100 day Moving Average at 7470.
The top side looks limited with resistance at 7658/61 but above here 7691/96 is another tough obstacle. A break however allows another test of the week’s high at 7728/39.
FTSE backed away to good support at 6290/85 which did just hold the downside as hoped from a little lower at 6277.
A break below 6270 is looking more likely today for a buying opportunity at 6246/40. This should hold the low today so expect a bounce but be ready to stop out below 6225 for 6214.
Resistance at 6318 then Wednesday’s high of 6359/62 should hold again but any shorts here need a stop above 6370 for a 6396 target. Exit longs here and try shorts with a stop above 6405. Above here there is little to stop a run to 6500/05.
S&P held support at 1510/09 & as predicted we have failed at 1521/22 resistance on the bounce to form a bearish double top. We look for prices to drift back to 1510/09 today. A break below here is very possible & confirms the topping pattern for 1506 & even 1502 would not be a surprise. The measured target for the move next week is 1489.
Highly unlikely but if we do find the strength to push through 1523 we should reach for the next target of 1527. These are the highs of Dec 2007 would you believe, in what is becoming a dangerously over bought market.
Dow Jones Industrial Average did correct as expected to test support at 13885/80. Here as stated, we needed to exit any shorts & try longs looking for a low & indeed the exact low was 13882. Yesterday we completed the right shoulder in a head & shoulders topping pattern. We should now retest 13885/80 support today but a break lower is more likely for 13840/24. We should bottom here today but do expect further losses to 13768, if not today then next week.
Only a close now above tough resistance at 14000/005 will allow us to push on towards 14097 then 14205.