Technical Weekly 18122006

Equities
While there have been some indications that this bull run is "tired," there are few if any technical sell signals to indicate that a change of direction might take place.
The only concerns we have is the persistency of bearish divergences on daily technical oscillators and a high bullish sentiment amongst US financial advisors according to Investors Intelligence.
But for now, the primary uptrend, which started in March 2003, is intact.
According to Elliott Wave theory, European stocks are poised to resolve a five-leg move that may put the Dow Jones Stoxx 600 index on track for further gains.
The chart below shows why June 2007 could be a key turning point for European stocks.
The numbers in black identify each leg of the movement.The green vertical lines apply the ratios in the Fibonacci sequence to dates, rather than price levels. Measuring the time scale of the first wave and applying that same period from the end of the fourth wave suggests the fifth and final wave will resolve in June.

Commodities
Brent
No change, short term bullish, but the Brent must not fall below short-term support (red line), otherwise renew weakness may follow towards the lows.

Gold

Neutral, strong support exists around 615$, which is the confluence of the 200 (in yellow) and 50 day moving average.(in green)

German 10 Year Yield
Yields broke through resistance above 3.78% but are now facing another one around 3.85%. (Blue line)
The daily stochastic indicator in the lower panel is now above 90, which indicates an overbought status. In the coming days/weeks a trading range between 3.85% and 3.65% seems likely.

Euro-dollar
Last week I said that the Euro-dollar was correcting towards the 1.30.I'm monitoring closely the ascending trendline (in red) because the rate should remain above support in order to avoid a retest of the 1.29. (Black line)