Technical Weekly 20032006

EQUITIES
How long and how far can the bonds decline, and how far can
interest rates rise until the rise becomes potentially bearish for
the stock markets?
The economic numbers continue to improve and the growth estimates are raised for most economic regions but sooner or later the rise in rates will become a drag. Stock markets have continue to benefit from the growth expectations, disregarding the interest rate rise.
But for how long?
For now if we look at the Stoxx 600 (graph 1) for instance the long term trend is still rising for 91% of the stocks , the medium trend is rising for 87% and the short term trend for 80%.
This means that the overall trend is so strong for equities that we should not expect a major bearish reversal, at least in the coming days.



















COMMODITIES

Brent
The short-term trend remains neutral and I'm waiting for clearer indications.
















Gold
Gold rebounds on the support at 540$ and is likely to resume the long-term uptrend with a break above the 560$.


















GERMAN 10 YEAR YIELD
Bond yields have continued to advance in Europe and are now approaching the 3.70% target.
The short-term trend could improve for bonds in the coming days, but the medium and long-term trends are bearish.



















EURO-DOLLAR
Last week, the rate breaks the 1.2 level confirming my bullish scenario.
This open the way for a rise to 1.24.