Long term model

The long term technical model (metastock) I follow is currently in sell mode for the DJ Euro Stoxx 50.
The model turns negative one week ago.
The short term trend (3 months) is now down but the medium (6 months) and the long term model (1 year)
are still up.
As you can see the signals are pretty good.

click on the chart to enlarge

Bearish trend?

If the market doesn’t bounce soon (Monday or Tuesday) and the support lines break down for all the indices, then look out as we may be in a seriously bearish trend.
The 200 day moving average is the last defense.(green line)
But as the VIX spikes on Friday, I favor a rebound in the coming days.

DJ Euro Stoxx 50

SP500

VIX

BREAKDOWN!

members of the DJ Euro STOXX 50 : a lot of short term breakdowns.

"click on the table to enlarge"

A TOP IN JUNE PART 4

Back to business!

Last year in December, in the beginning of February and in the end of April,
I showed you some charts of the STOXX and the Dj Euro Stoxx50 based on Fibonacci sequence.
Elliott wave analysis with a regression line + 2 std deviations (here is the last one)

This chart suggested that the 5 and final wave will resolve in June 2007 (top)
Now this is a quick update but this time it is a daily chart (zoom).

We can see that the DJ Euro Stoxx 50 was not able to reach new highs and that it recently broken down below an important support.(small triple tops)
I'm not excessively bearish because for now this is just part of a normal correction and not a major reversal.
BUT A BREAK BELOW THE RISING LOWER UPTRENDLINE (ARROW) WILL CHANGE MY VIEW.(+/-3% downside potential left)
MY FIRST IMPRESSION IS THAT I THINK IT IS TOO SOON TO ACCUMULATE STOCKS.

HOLIDAYS

I will be on holidays during the month of July!

Je serai en vacances pendant le mois de juillet!

PS:le portefeuille constitué de 10 valeurs (big cap) a performé de 18.7% depuis le début de l'année.Les 10 valeurs présentes actuellement sont : IBA OMEGA PHARMA LONMIN PHILIPS SOLARWORLD ABENGOA TECHNIP VALLOUREC DASSAULT SYSTEM et un tracker sur le DJ Stoxx Oil&Gas.

US STRATEGISTS

Bloomberg's recent strategist survey showed a (strong) decrease in the recommended allocation for stocks.
As you can see on the charts during the last 5 years there is (often) an inverse correlation between the SP500 and the % stocks recommended.

Short term bullish

Just as it looked like the major averages were ready to break the downside (double tops), the buy-the-dips mentality came back in force.
On a short term basis the DJ Euro STOXX 50 made a morning star bullish pattern (circle).
As sentiment is still showing fears (volatiliy is rising and us investors are very bearish) in the short term the risk of a fall is decreasing and
in the same time the probability of the rise continuing is increasing.

VERY BULLISH CALL ON ENERGY STOCKS

Today the DJ Oil&Gas index validates a long term bullish breakout.As you can see the target is more than 15% higher.

The long term momentum indicator is also close to give a long term bullish signal.(the medium and short term are already positive).

Moreover the sector is now in the top 5 of my ranking system.
A few weeks ago it was in the bottom 3.