Technical Weekly 03082007

Equities
Still catching my breath from one of the worst weeks in years, I'm going to show you a short -term chart that suggest a bounce may occur in the coming days.
After a very steep decline the price DJ Euro Stoxx 50 was halted by strong support in the 4200 zone.The 200 day moving average in green and the rising lower uptrendline are technically speaking a possible good entry points for “dippers”(buyers).(chart 1)

Chart 2 is the hourly chart showing that the index is trying to make a short- term double bottom.A break above the 4315 level could open the door to the 4450 level (3% upside potential).

On the other way, the long term technical model I follow is currently in sell mode.
The model turns negative last week .

A break below the 4200 level could produce another wave of selling.

What is striking is the performance of the different sectors during the last 3 months.
Cyclicals sectors are performing very good but financials (banks&insurances) perform very badly.

Bonds
The target of the double top pattern was recently reached (4.3%).
I suspect that the correction is over and that renewed strenght may follow towards 4.5%.

Brent
Still bullish but need a rest after the strong rise.
The 80$ level is a strong resistance and on the weekly chart you can see that the Brent was not able to break above it. Moreover the TD Combo indicator is now flashing a sell signal (arrow).

Euro
Long term bullish.Short-term the rate should stay above 1.365 in order to keep the pressure to the upside with the upper rising trendline as next target/resistance levels.