ANALYSE TECHNIQUE DES MARCHES FINANCIERS

Cycles et perspectives marchés actions pour 2011

2011-04-06T21:00:00.009+02:00

L'histoire se répète est un des grands principes de l'analyse technique, elle repose sur un phénomène d'imitation basé sur la psychologie humaine et sur l'observation des tendances. Les quelques graphiques ci-dessous (sur les marchés américains car l'historique est plus longue) mettent en évidence les cycles boursiers soit de façon historique, en comparant une période à une autre, soit de façon quantitative car il existe des cycles établis et reconnus par le marché. Le premier graphique du Dow Jones depuis le début des années 1900 dévoile des périodes de fortes tendances haussières suivies par des périodes de fortes volatilitées. La période actuelle, c'est à dire celle qui a commencé en 2000 ressemble étrangement à celle qui s'est déroulée entre le milieu des années 60 et le début des années 80. Le graphique suivant permet de « zoomer » et de comparer les deux périodes entre les points 3 et 4 en rouge sur le premier graphique.

En terme plus quantitatif, la comparaison depuis 2009 entre un cycle composite ( basée sur la moyenne du cycle annuel , présidentiel et décennal- ligne rouge) et le SP500 (en bleu) permet de tirer les mêmes conclusions, à savoir que l'indice pourrait connaître des temps difficiles à partir des mois d'été.

Une dernière analyse comparant la moyenne des performances du Dow Jones lors d'un rebond cyclique dans un marché boursier baissier long terme (ligne bleu) par rapport au rebond actuel (de puis mars 2009- ligne rouge) montre que la troisième année de hausse est synomyne de baisse pour l'indice.

SP 500 et vagues d'Elliott

2009-08-06T09:49:00.003+02:00

La théorie des vagues d’Elliott est une forme d'analyse technique qui tente de prévoir les tendances futures sur les marchés financiers. Cette théorie repose principalement sur la psychologie collective des investisseurs qui passe régulièrement de l'optimisme au pessimisme et vice et versa. TD D-Wave est un indicateur développé par Tom Demark qui tente d’objectiver de façon mécanique (avec des règles strictes reposant sur les nombres Fibonacci) les différentes vagues.
Chaque vague ayant sa propre "signature" qui est souvent le reflet de la psychologie du moment présent. Comprendre comment et pourquoi les vagues se développent est la clé de l'application du principe des vagues.
Voici très largement résumées quelques-unes de ces caractéristiques mettant en parallèle l’indicateur TD D Wave (chiffres bleus) sur le graphique journalier du SP500.

Repérer la vague 1 au moment de sa création est rarement évident. En effet, lors de la première vague, lorsqu’un nouveau marché haussier commence, les nouvelles fondamentales sont encore quasi universellement négatives.

La tendance précédente (baissière) est considérée comme étant encore fortement en vigueur.
Le consensus étant que le rebond haussier est purement un « bear market rally ».
Les analystes fondamentaux continuent de réviser leurs estimations des bénéfices à la baisse et l'économie ne semble toujours pas très solide.
Les enquêtes de sentiment sont résolument baissières, les options put sont à la mode, et la volatilité implicite sur le marché des options reste très élevée.
Selon l’ indicateur TD D Wave, le début de la vague 1 pour le SP500 a eu lieu mi-Juin.

La vague 2 corrige la première vague, mais elle ne peut jamais aller au-delà du point de départ de cette dernière. Généralement, les nouvelles sont toujours mauvaises et cette nouvelle baisse rappelle à tous que le marché baissier est encore profondément installé.
Cependant, certains signes positifs apparaissent, notamment des divergences positives sur les indicateurs, la baisse se décomposant en 3 sous-vagues contrairement aux vagues de baisse précédentes (en 5 sous-vagues).
Les prix ne vont pas retracer plus que 61,8% de la première vague.
Selon l'indicateur le bas de la vague 2 pour le SP500 a eu lieu mi-Juillet et a retracé 23.6% des gains de la vague 1.

La vague 3 est habituellement la plus grande et la plus puissante.
Les nouvelles sont désormais positives et les analystes fondamentaux commencent à relever leurs estimations bénéficiaires pour les sociétés.
Les prix augmentent rapidement, les corrections sont de courte durée et peu profondes. Quiconque espère un recul prononcé des cours risquerait de rater la hausse.
Selon l'indicateur, nous débutons maintenant la vague 3, qui en terme d’amplitude multiplie souvent la longueur de la vague 1 par le fameux nombre d’or, à savoir 1.618.L’objectif pour les prochains mois se situant vers les 1337 points.

"cliquez sur le graphique pour l'agrandir"

SP 500 weekly view

2009-07-28T15:10:00.003+02:00

Recently, several indices broke above some important resitance levels, increasing the odds for more profits in the coming weeks.

The weekly chart of the SP500 shows this breakout above the long-term declining trend line (blue line), as well as the horizontal resistance, which is the neckline of a reverse head and shoulders pattern.

The upside price target is about 1200.(see arrow)

SP 500 Long term view

2009-03-08T14:30:00.005+01:00

The SP 500 has recently broken below the 740 support.
Most of other indices have also broken down below their 2002/2003 low.
Such an occurence of bearish events often trigger panic selling move.
As you can see on this very long term chart the SP 500 also validated a major double top pattern with a chartist target around 400.

The 400 zone also corresponds to a long term consolidation/support zone.
Hopefully the 600 zone is the first support zone, this can be seen if we connect the lows of 1942, 1974 and 1982 on a log. chart.

This zone also correponds to a fibonacci retracement of 61.8% of the bull market active since 1982.

Dow Jones 7500?

2008-10-07T13:49:00.003+02:00

Hoping this long term bearish chart pattern is a "false one".

Panic selling

2008-09-15T13:51:00.002+02:00

Panic selling on equity markets mean a quick and hard fall towards 1140-1150 (first support) or even towards 1040-1050 for the SP500.
Wave C is often devastating and is typically at least as large as wave A and often extends to 1.382 or even 1.618 times wave A .
The good news is that October could provide a good entry point for equities.

Buy&sell signals DJ Euro Stoxx50

2008-09-02T14:35:00.003+02:00

"click on the table to enlarge"

Stoxx sectors rankings

2008-09-02T14:04:00.004+02:00

The table below is a ranking system based on a 6 months rate of change (roc) divided by volatility for the Stoxx sectors.

The second one is more sensitive and only composed of different rates of change.

Time to be optimistic?

2008-09-01T16:42:00.002+02:00

While most US strategists are bearish, please find here one contrarian opinion (bullish report for equities) http://www.pring.com/pdfs/ptgletter.pdf

Saisonnalité

2008-08-28T19:13:00.005+02:00

La fin de l'été approche déjà et l'activité du marché est susceptible de reprendre durant les prochaines semaines.
Si l'histoire se répète, les quatre derniers mois devraient apporter une certaine amélioration pour le marché actions.
L'histoire montre cependant, que le mois de Septembre pourrait encore présenter un risque avant que le marché ne se reprenne plus durablement.Sur le graphique ci-dessous, nous analysons la tendance historique moyenne du SP 500 pendant les quatre derniers mois de l'année.
La ligne bleue montre la tendance du SP500 de 1960 - 2007, alors que la ligne rouge montre la moyenne des dix dernières années.
Vous pouvez observer que le SP 500 diminue encore pendant la majeure partie de septembre avant de se reprendre et de présenter une tendance haussière début Octobre jusqu'à la fin de l’année.

Je surveille plus particulièrement certains indicateurs économiques avancés qui ont une corrélation très forte avec le marché actions.
Le deuxième graphique compare la confiance des consommateurs aux USA avec le Dow Jones. Nous observons 2 choses très importantes.
Premièrement la Confiance des Consommateurs se situe à des niveaux extrèmement bas et deuxièmement le dernier chiffre (publié récemment) est en augmentation.
Historiquement si dans les prochains mois cet indicateur parvient à remonter et à franchir la barre des 66, l’indice progresse en moyenne de 23.1% sur 1 an !

"click on the chart to enlarge"

Stoxx 600 vs SP 500

2008-08-14T16:32:00.000+02:00

This relative chart compares the Stoxx 600 vs the SP 500 in €.
May be time to go US.

"click on the chart to enlarge"

$

2008-08-14T15:50:00.002+02:00

If history is guide, according to this chart based on the 4 year presidential cycle, the US dollar should rise in the coming months.

"click on the chart to enlarge"

Commodities

2008-08-13T11:14:00.006+02:00

The top formation in the DJ STOXX 600 BASIC RESOURCES index confirms a reversal of the uptrend from the 2002 lows.
The downside risk in the coming weeks according to this bearish head and shoulder pattern is minimun 15%.
As you can see most of the index members are technically weak (most momentum indicators are on sell signals-table 1 and 2)
Large speculators are selling commodities suggesting hedge funds are deleveraging commodities

On a short term basis the sector is oversold (short term target reached and short term buy signal-green arrow on chart) meaning a rebound is occuring.

Stocks - Stuck In A Long-Term Sideways Pattern?

2008-08-13T09:17:00.002+02:00

"click on table to enlarge"

Oil and he stock market

2008-08-12T09:18:00.003+02:00

Since 2002, there seems to be a strong correlation between the stock market (SP 500-black line) and Oil (WTI-red line).
In fact the stock market leads WTI by 1 year.
If history is guide the chart below implies a relief rally for oil before going back to 100$.

"click on the table to enlarge"

Bear market rally

2008-08-11T15:46:00.004+02:00

The DJ Euro Stoxx 50 seems to be able to surpass the 3400 resistance zone.
As you can see momentum is still up and the buy signal validated by the TD sequential in July is still valid.(green arrow)
It seems to be too early to take profits on this bear market rally, as according to history,the average bear market rally last 2 months and delivers +/- 20% performance.

"click on the table to enlarge"

€/$

2008-08-08T09:19:00.004+02:00

The €/$ fall below its 200 day moving average (green line) for the first time since March 2006.
As you can see this breakdown was preceeded by a huge negative divergence on the Macd.
The first support zone is 1.488 and the minimun target of this bearish distribution pattern is 1.468.

Baltic dry index and bonds yield

2008-08-06T15:44:00.002+02:00

The Baltic Dry Index has now declined for 17 straight days and hasn't had an up day since early July.
Since its peak in the Spring, the index is now down more than 30%.
Given that the index measures tanker shipping rates, falling prices are considered a sign of global economic weakness.
As you can see the Baltic Dry Index (red line) is highly correlated with Bonds yield.(German 10 yr-black line) and suggests more upside for bonds(at least in the short term).

IFTA 2008

2008-08-05T14:37:00.002+02:00

The 21st annual International Federation of Technical Analysts (IFTA) conference will be held from 6-8 November 2008 at le Meridien Etoile Hotel, Paris, France.
More informations here :http://www.iftaparis2008.com/

Commodities indices Part2

2008-08-05T09:21:00.002+02:00

Big distribution top pattern on the DJAIG Agriculture index but support around the 75$ level.

The DJ Industrial Metals is testing critical support, a break below this level
could open the door to a retest of the long term uptrend.

CRB Commodity Index Caps Biggest One-Day Decline Since March

2008-08-05T08:30:00.004+02:00

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aN8czV3PcwUI

Interesting report coming from Bloomberg.

Most commodities indices broken up their uptrend.

The CRB index trades now close to the 200 day moving averages (green line)

but the target of this bearish breakdown is now 10% lower around the 350-360 level.

German Gov bonds yield

2008-08-01T15:40:00.004+02:00

As you can see on the first chart, the Bund in yield is caught in a long term bull trend channel but on the second chart (which is a zoom of the first one) a double top pattern is developping meaning we may first go to the 4% level before we go higher later.

Tading range expected

2008-08-01T15:08:00.004+02:00

The chart below compares the 1968-1969 period(red line) to the 2007-2008 period (blue line) for the SP500.
If history is guide, the SP 500 could trade sideways during the coming months.

"click on the chart to enlarge"

One of the best contrarian indicator gives buy signals

2008-07-31T14:22:00.003+02:00

Numerous global indices were deeply oversold and are now trying to break out.
Dj Euro Stoxx 50, Russia, Brasil, Netherlands, Helsinki, Ireland.. all are flashing short term TD Sequential (12/13's) buy signals.( green arrows)

Short term breakout?

2008-07-31T09:04:00.003+02:00

While all my long term technical models are still bearish (chart1), I suspect that the SP500 made a short term bullish breakout yesterday.
As you can see on this daily chart, the index was able to rise above an horizontal resistance and is now close to break the downtrend active since May 08.
Today will be an important day as the DJ Euro Stoxx 50 will try to challenge the 3400 level.

End of this rally?

2008-07-25T11:20:00.002+02:00

In such sustained bear markets, trend reversals are usually very sharp (V bottom pattern) and amplified by short covering. This is why we I'm not sure that the recent bullish rally will be sustained as the SP500 and the DJ Euro Stoxx 50 are now close to resistance zones (respectively 1300 and 3400)

The Financials stocks are probably the key here as the rally in US financial stocks has driven prices near a key Fibonacci level.(38.2%)

A failure to break above the 72 level could see the index drop back quickly.

€/$

2008-07-25T11:17:00.001+02:00

The US dollar continues its short-term rebound and continues to profit from falling commodity prices.A trading range is expected between 1.6 and 1.54

Short term bollinger buy&sell signals DJ Euro Stoxx 50

2008-07-23T14:16:00.004+02:00

"click on the table to enlarge"

Brent

2008-07-23T12:16:00.001+02:00

The Brent recently validates a minor double top pattern.

The minimun target of this bearish pattern is 115$.

The long term trend remains up.

SP 500 Elliott Waves targets Part 2

2008-07-22T15:02:00.002+02:00

The trend remains bearish for the SP00 and all technical bounce attempts have failed so far.

As you can see on the chart, the targets of this “devastating” C wave for the SP500 is

C= A : 1163.61

C= 1.38XA : 1066.84 (note that this corresponds to the bottom of wave 4)

C= 1.62XA : 1005.73

Bear markets sometimes extend well beyond what we can imagine.

Major supports

2008-06-27T09:31:00.002+02:00

Completely subjectiv but defitively something to watch for the coming days.

"click on the table to enlarge".

US Bank index

2008-06-25T14:15:00.000+02:00

The BKX bank index in the U.S. tested long-term support at 60 and will likely attempt to hold that level over the near term given that the index is very oversold and down approximately 30% over the past two months.

Sensex

2008-06-17T14:18:00.001+02:00

How do me know when the trend has changed?
I use a simple method : the 1,2,3 trend reversal.
On this long term weekly chart of the Sensex (India) we can clearly see that the uptrend line was broken in March 2008.
This was the first part of the method.
The second part of this method is the pull-back and the lower high happening in May.
Part 3 which complete the reversal pattern is a lower low.
For this we have to wait for an eventual break below the support zone (dot red line).

Elliott waves bear market potential target

2008-06-11T14:09:00.006+02:00

"click on the chart to enlarge"

According to the Elliott waves theory the bull market active since end 2002 ended in October 2007.(wave 5)

The chart below of the SP 500 shows that the decline into January was a nice "A" wave.
This was the first leg of the correction.
What we saw from January through May was the "B" wave higher, which essentially corrected the first correction.
As you can see the impulse waves, (decline from October) unfolded in five wave and the rally through May was arguably three waves.
That leaves us with the current decline now just getting underway.
The "C" wave is usually as long as A, but may often be 1.62 x A.
So the downside target of this bear market for the SP 500 could be between 1130 and 1075.
This last number corresponds to the bottom of the wave 4 of the last bull market.(horizontal line on the long term chart above)

A & C are (mostly) 5-waves

€/$

2008-06-06T13:13:00.001+02:00

The rate rebounds strongly at the support zone around 1.54.

Sideways trading is expected between this zone and 1.6.

The long term trend remains bullish.

Buy&Sell DJ Euro Stoxx 50 and Dow jones Industrials

2008-06-05T16:28:00.004+02:00

"click on the tables to enlarge"

Commodities bubble?

2008-06-02T11:54:00.004+02:00

The first chart is a long term relative chart of the CRB index versus the SP500.
The second one compares the materials sector weight as a percent of the SP 500.Looking at these two charts I do not see a bubble.
On the contrary I'm still long term bull.
The last chart compares the financials sector weight as a percent of the SP 500 : this is not a great chart!

Sector relative strength

2008-06-02T08:37:00.010+02:00

Each chart, rising (falling) lines indicate periods where the sector is outperforming (underperforming) the Stoxx 600.
While the economy remains weak, sectors that typically benefit from a weak economy have not been acting particularly well.
Recent action in the Food&beverage, Health Care and Telecoms sectors has been very poor.
I have started to see renewed interest for defensive sectors since last week and it may be time to favoring Food&beverage and Telecoms sectors after their strong decline.
It's not just defensive sectors that have been presting badly .
Financials and Technos remain in a pronounced downtrend.
Utilities continue to run into resistance at current levels.
Finally, Materials and Oil&Gas continue to trade in nice uptrends.
Although both of these sectors are trading at the upper end of the range, any weakness in them as they approach resistance is likely to be temporary.

US long term yields

2008-05-29T15:07:00.002+02:00

Yesterday, the US 10 year bond yields broke the 4% and the declining 200 day MA.(green line)
The mid-term technical target of the bullish ascending triangle is around 4.7% for the coming weeks/months.

Brent

2008-05-28T11:46:00.002+02:00

Le Brent arrive désormais à la hauteur d'une zone de résistance majeure vers les 130-135$, ce qui correspond à la borne haute du canal haussier sur le graphique long terme.
Actuellement, cette plage de cours a de très faibles chances d'être dépassées sans la réalisation préalable d'une correction.
Le marché est clairement en état d’exagération et les indicateurs techniques déjà fortement surachetés perdent en puissance.
De plus le volume récemment constaté est très important (configuration de blow-off) ce qui est souvent une indication de fin de cycle à court terme.
A plus long terme l’objectif reste 150$ mais avant le prix du baril devra faire une pause, ce qui implique une correction.
Le premier support à surveiller se situe vers les 120$ mais une correction plus importante comparable à celle récemment observée sur l'once d'or (15%) est tout à fait possible.

Short term decline or new bearish leg?

2008-05-21T14:03:00.006+02:00

After failing to break above the 3900 resistance level the DJ Euro Stoxx 50 may start a correction.On this hourly chart, you can clearly see a break of a bullish ascending trendline.The first support zone is 3700.

If the index failed to rebound in the coming days, there is a high probability of extending the slide towards the lower part of the rectangle. (daily chart-support around 3500)

New all time high for the Baltic Dry Index

2008-05-20T16:02:00.002+02:00

This index is a measure of shipping costs for commodities and reflects strength in the global economy as well as strong demand for raw materials.

This is good news for energy and materials stocks.

Still bullish

2008-05-20T08:32:00.004+02:00

In the US, the SP500 was able to remain above the important level of 1400 and is now testing the falling 200 day moving average.(green line)

The index now faces short-term overbought pressures and it may have some difficulty climbing above it.

The good news is that price momentum, patterns and investor sentiment suggest conditions are still supportive of further upside gains.(mid-term target is 1540)
The bad news is that the rally continues to be very selective, driven primarily by basic resources and energy stocks.
This rally needs to broaden or it may fail in the coming weeks.

In Europe, the DJ Euro Stoxx 50 and the Stoxx 600 were not able to break above resistances (respectively 3900 and 330).
This is an indication that bearish traders are more active near resistance zones.
Nevertheless, I still think new breakout attempts are likely in the coming days.

Short term pull-back?

2008-05-09T16:37:00.001+02:00

Last week, the SP500 rose above the important level of 1400, which open the door to the 1540 level for the coming weeks.
In Europe the DJ Euro Stoxx 50 failed to break above 3900.
So far, I estimate that a break through 3,900 is still likely but a failure to confirm such a breakout by the end of next week would force me to reassess this scenario.
On a long term basis, I still believe that the current move is only a bear market rally and is probably not the start of a new secular bull trend.
On a short term basis the market is moving into an increasingly overbought position. (see chart below)
That could suggest that a short-term pullback may occur over the next one or two weeks but as long as we have the SP 500 above 1390 I don’t expect any major negative surprises.

India

2008-04-25T14:08:00.005+02:00

This chart of the Sensex index (India) looks promising.

After a positive divergence (RSI lower panel), the index broken up the downtrend in mid-April .

Moreover, today it was able to reintegrate the bullish trend active since June 06.

Bund

2008-04-25T09:54:00.002+02:00

The German 10 Yr yields broken up the downtrend which has been in place since June 2007.
Expect yields to advance further towards 4.30% or even close to the peak of 2007 (4.70%).

A bottom end April?

2008-04-16T12:06:00.004+02:00

The equity markets remain rated short-term neutral. The scenario remains unchanged looking for a breakout above resistance zone, which will resume the medium-term bottoming process.
It is still expected to come towards end of April(weekly SP 500 chart with cycle finder and Fibonacci time projections) as it seems that most indices will probably try a bullish exit of their trading range. (daily chart DJ Euro Stoxx 50).

China

2008-04-14T08:59:00.002+02:00

The CSI index has fallen over 35% from its high in January to its low to date near 3545. (double top pattern)
According to this chart the index could fall another 10% before testing the long term ascending trendline.(arrow)

Test of the lows?

2008-04-11T14:28:00.003+02:00

The short term uptrend seems broken for the DJ Euro Stoxx 50 (upper chart) and in the same time we have a classical " flight to quality" for bonds.(German 10 years yields-lower chart).

SP 500

2008-04-11T11:20:00.004+02:00

Why I remain mid- term carefully bullish for the SP 500:

-high level of pessimism, which is bullish from a contrarian point of view.
-during the March retest most technical indicators failed to match the new price lows (positive divergence)
-The fact that the market ignores the recent bad news (e.g. macro economic data, inflation, banks), indicates that the mood has changed.
-According to Fibonacci time zones, the bias for April should be bullish.
-insiders and “smart money” (commercials) are bullish.
-67% of stocks in the S&P 500 were above their 50-day moving averages. This is the highest level of the year for the breadth indicator, even though the index itself has not made new highs.
This is positive news for equity markets, since a majority of stocks are beginning to break out of their downtrends.
-According to Elliott waves analysis, the downside target for the bearish A wave ( from a double top pattern) was reached in March and a bullish corrective B wave is underway.
-The weekly Macd indicator is close to be bullish which increases the probability of a breakout above resistance.

A break above resistance zones ( 3900 for the DJ Euro Stoxx 50-1415 for the SP 500) would be very positive.
The initial upside target for the S&P 500 is 1560 if the index breaks above its February peaks.

On the negative side we have :
-short term bad risk return because of strong resistance zone ahead
-lack of volume (divergence with price).
- still a trading range and no bullish reversal pattern yet.
-Equity indices are trading below the falling 200 day moving averages.

€/$

2008-04-11T11:12:00.003+02:00

Lors de la dernière étude sur l’eurodollar nous avions remarqué que :
-la tendance long terme restait toujours haussière.
-l'importance de la sortie haussière du triangle ascendant, qui permettait d'avaliser le franchissement du seuil psychologique à 1.50 $ pour 1 euro avec comme objectif minimun 1.56.
-Que le taux de change semblait vulnérable à une prise de profit mais que rien ne permettait déja d’affirmer qu’un retournement majeur en faveur du $ se produira bientôt.
Que pouvons-nous observer actuellement :
1/ À moyen terme, la tendance de la parité EUR/USD est toujours orientée à la hausse et un dépassement des nouveaux plus hauts viserait un objectf 1.648.Cet objectif est déterminé par la formation d’un nouveau triangle ascendant mineur.
2/ À court terme, après l'atteinte de la première cible intermédiaire à 1.56 et la légère extension qui a suivi, la devise se trouve désormais en état d'exagération.
Plusieurs éléments le montrent :
-La perte de vitesse du Macd et du RSI dans des territoires tendus, équivalents à ceux atteints lors de la précédente avancée de fin 2007, juste avant le démarrage de la pause.(flêches blanches)

-La réalisation de l'objectif du triangle ascendant qui appelle des prises de bénéfices et la présence récente de chandeliers d'essoufflement.
-Un signal de vente donné par l’indicateur TD Combo (chiffre 13 et flèche en rouge sur le graphique)
- La décroissance des positions ouvertes sur le Dollar Index (non représenté).
En conclusion, après avoir connu une nouvelle avancée significative, la devise s'apprête à faire une pause, à court terme.
Il faut également surveiller de très près la présence proche de la résistance horizontale sur les plus hauts et du support de la droite de tendance ascendante qui pourraient donner de nouveaux signaux dans les prochains jours/semaines.

Buy&sell Dj Euro Stoxx 50 and DJ Industrials

2008-03-26T11:38:00.003+01:00

"click on the tables to enlarge"

$/€

2008-03-20T08:56:00.001+01:00

Après avoir validé un signal d’achat fin février sur une sortie haussière un forme de triangle ascendant, le taux de change semble vulnérable à une prise de profit.
Voici pourquoi :
- l’objectif de la figure haussière (1.56) a été largement atteint et dépassé.
- Les indicateurs de tendance sont surachetés sur tous les horizons de temps (mensuel, hebdomadaire et journalier)
- Sur le graphique journalier ci-joint on peut observer un signal de vente récent sur le RSI et sur le TD Combo (nombre 13-flèche sur le graphique)
A ce stade toutefois, rien ne permet d’affirmer qu’un retournement majeur en faveur du $ se produira bientôt, mais il est assez clair qu’une correction vers la droite de tendance haussière au environ des 1.55 est une probabilité importante à cours terme.

En cas de rupture de cette droite, un retour vers le niveau des 1.49 est possible.

Bear trap?

2008-03-19T10:44:00.002+01:00

As I said in the previous weekly that: in the short term, most indices are caught in a trading range and are testing January lows.
In the event of renewed panic selling, like in mid-January, I think that the correction could extend below this level.
However, I suspect they are trying to bottoming out in the coming weeks.
And now I think that with the making of the new low on monday ( panic selling) and the nice up-move yesterday, that the monday’s downside acceleration was probably a bear trap.
I also think the market is still caught in a trading range, after all March was already the fifth month down and money could flow from gold and oil (double top on the CRB index) back to stocks and into the dollar.

Technical weekly 14032008

2008-03-14T14:18:00.006+01:00

Equities

In the medium term, stocks are caught in a bear market.

The main reasons for that are: continued inflationary pressure, a coincident bull market in gold and commodities (switch from soft to hard assets) weak earnings growth and outflow in equity funds.

In the short term, most indices are caught in a trading range and are testing January lows. In the event of renewed panic selling, like in mid-January, I think that the correction could extend below this level.

However, most sentiment surveys now highlight extreme pessimism on equities and as I said last week a recent low risk buy signal was made by TD Combo&Sequential. In the past, such extreme pessimism has often coincided with significant short term bottoms.

Bonds

No change, bond yields trade now close to major support.(3.65%)

The risk/return is not good for bonds right now but a break below this level (which corresponds of the 61.8% retracement of the last bull move) could imply a downside move towards 3% for the coming months.

Brent

The Brent is now close to our 112$ target. I suspect oil prices is vulnerable to pullback as crowd sentiment is now extremely optimistic.

Euro

Also close to our target of 1.56, the exchange rate is now extremely overbought and a correction may follow soon.

Smart&dumb money

2008-03-13T09:07:00.003+01:00

The 2 charts below show the trend of the smart money (black line) and the trend of the dumb money (yellow line-small traders) for the SP 500.(traders commitment)
On the first one you can see that the smart money became short in mid 2000.
In the second one you can see that the smart money were selling equities since end September 07 and became short recently.

2008-03-12T09:47:00.001+01:00

Yesterday, the fed announces a continued liquidy boost.
Just in time! The SP500 rocketed higher, it was a very bullish session and the index was able to rebound on a very important support level.
Do the fed look at charts, I don’t know but this could mark the start of a more sustained rally.
Long term momentum indactors are deeply oversold and sentiment indicators are pessimistic with clear signs of capitulation among retail investors.
Economists are very bearish and most of them think the US economy is already in recession.
This is good news!According to Ned Davis Research, the market bottoms in recessions have been followed by median gains for the SP500 of 15% 3 months later, 23% 6 months later and 34% a year later.
Moreover, since 2000, technical analysts have noticed that a significant trend reversal has always occurred during March: major high in March 2000, low in March 2001 , high in March 2002 , major low in March 2003, high in March 2004 , minor high in March 2005 and minor low in March 2006.

La bourse ou l'économie?

2008-03-10T16:21:00.003+01:00

La plupart des grandes banques se basent sur un scénario macro économique pour anticiper une hausse ou une baisse des marches d’actions.
Pourtant on lit et on entend souvent que la bourse anticipe l’économie.
Les deux graphiques ci-dessous sont une façon objective de répondre à cette importante question.
Ils comparent le S&P composite et le cycle économique mesuré par le “National Bureau of Economic Research”(http://www.nber.org) depuis 1900.
Les lignes verticales rougent indiquant les contractions (points bas) et celles en bleues les expansions (points hauts) du cycle économique en cours.
Pour l’indice, les flèches rouges indiquent les creux et les bleues les pics.
On peut clairement remarquer que la bourse anticipe bien l’économie dans la plupart des cas.
Les trois seules exceptions en plus de 100 ans se sont produitent pendant les deux geurres et en 2001.
Les graphiques et les commentaires sur les graphiques proviennent de M.Elio Zammuto.(http://www.the-intermarket.com)

Technical weekly 07032008

2008-03-07T16:05:00.006+01:00

Equities
In the medium term, equity indices remain in bearish trends.In the short term, most indices are caught in a trading range and are testing January lows. In the event of renewed panic selling, like in mid-January, I think that the correction could extend below this level.

However, I suspect they are trying to bottoming out in the coming weeks but for now the only bullish signal we have is the recent low risk buy signal made by TD Combo&Sequential (green arrows on the daily chart of the DJ Euro Stoxx 50).

The behavior of the index during the next meetings will inform us about this assumption.

If the market is going to successfully test its January lows, it needs to rally soon with good upside volume.

Bond Yields

Bond yields resume their downtrend and could reach the big support zone of 3.65% in the coming weeks.

A break below this level which correspond of the 61.8% retracement of the last bull move (September 2004-July 2007) would imply a downside move towards 3% for the coming months.

Brent

The recent breakout through the psychological 100$ resistance zone triggered an upside acceleration.

The target of the bullish broadening pattern is around 112-113$.

Euro

On the last weekly, I said that if the 1.5 resistance level were broken up, the exchange rate could reach 1.55-1.56.

I don’t change our scenario for this week.

Equity market cycle

2008-03-05T11:38:00.001+01:00

According to this chart coming from Morgan Stanley, investors psychology (technical analysis) is definitely something to watch in those market conditions.

A light in the dark?

2008-03-04T14:50:00.001+01:00

Today, two of the best contrarian indicators TD Combo and TD sequential are flashing "a low risk buy signal" for the DJ Euro Stoxx 50.
Arrows on the chart indicate buy and sell signals.

Why using now a technical analysis appraoch

2008-03-03T09:57:00.002+01:00

Day by day one of the best research boutique specialized in behavioural and technical analysis were ranked second best research bureau in Europe for 2007.(more infos on DayByDay Independent Research)
This is not surprising to me, here is why.
The chart below of the Dow Jones Industrial suggests that a 17 year period of dorming followed by a 17 year period of intensity appear to exist.
Note that during the 1966 to 1982 last dormant period , volatility was very high.
This was a period when technical analysts outshine fundamentalist analysts because the buy and hold phylosophy breaks down.
Historical cycle suggest that this present dormant period should last until the years 2016-2017.
Warren Buffet doesn’t use technical analysis, however it is intereresting to note that he has long used the 17 year cycle in his investment planning.

Semaine du 25 au 29 février 2008

2008-03-01T16:51:00.003+01:00

Only in french for now!

Technical Leaders ETF

2008-02-29T16:31:00.002+01:00

Please find here http://etfinvestmentoutlook.com/commentary.php?id=10430&s=Technical%20Leaders%20ETF some infos concerning ETF based on technical analysis.

Zinc-Nyrstar

2008-02-29T10:57:00.006+01:00

Après avoir formé une large figure baissière en forme de tête et épaule sur les années 2005 et 2006, le prix du zinc a depuis quelques mois déja atteint l'objectif de cette figure.Depuis lors après une stabilisation sur une importante droite de tendance haussière, le cours semble fortement repartir à la hausse.

Le premier objectif de cours au cours des prochaines semaines se situe environ 12% plus haut.(flêche sur le graphique)

Le prix du zinc a un fort impact sur les résultats opérationnels de Nyrstar. Une hausse de 100 dollars la tonne se traduit dans les comptes par une plus value de 26 millions de dollars.

Le titre est techniquement bien orienté, un dépassement au-dessus des 16.75€ ouvrirait la voie vers les 20€.

Nyrstar publiera ses résultats annuels le 18 mars.

Consumer Confidence

2008-02-26T16:17:00.002+01:00

US consumer confidence fell more than forecast in February to the lowest level in five years as the labor market cooled and the economy faltered.The chart below compares the SP500 in yellow and the Consumer Confidence index.

Technical Weekly 25012008

2008-02-25T11:54:00.006+01:00

Equities
Most short term indicators are now at oversold levels and most intermediate term indicators we looked are also at oversold readings.
Market internals remain oversold but are improving.
So that the market is oversold enough to rally but for now there is no pattern suggesting a sustained rally.
Taking risks have few chances to be rewarded as long as a valid signal did not appear.A wait and see market is the norm after a very strong decline but, as long as the process of reflection did not come to a end (base forming or distribution pattern?), it is highly preferable to stay on the sidelines.
This week we take a look at emerging markets, the MSCI EM Latin America made a new high (for 2008) last week and is strongly outperforming the Stoxx 600 (black line)

The MSCI EM Asia remains weak and volatile and the MSCI EM Eastern Europe technically ranges between the two others and is outerperforming European stocks.

Bonds

On the short term, positive action is expected (higher yields) towards the upper end of the descending channel (around 4.1%) but as you see the mid-term trend is still down.

Commodities

Most commodities are showing parabolic upside accelerations.

Their momentum is incredibly strong and most of them have made significant technical bounces since last month but are trading now close to resistance zone.

Aluminium, copper, oil and agriculture are just reaching long term key resistances.

The chart below shows the DJ-AIG Agriculture total return index; any break through these areas would suggest that the advance may extend a lot further.

Euro

The exchange rate is still trying to break above the 1.5 resistance level.

A break above this level could open the door to the 1.55-1.56.

Solaria update Part2

2008-02-20T14:57:00.003+01:00

The downside target is close to be reached!

According to Bloomberg, analysts are still bullish with an average target price @ 22.35€.(12 month consensus)

It seems that none of them knows the statistics about double tops.

Here are the numbers :
percentage meeting price target :73%(one of the highest)

break even failure rate : 11%

pullback rate :59%

Fibonacci time projection

2008-02-20T14:50:00.002+01:00

Time cycle is often forgotten when analysing markets but it may be more important than price levels in the current environment.
So far, there is still a risk of seeing renewed weakness over the next few weeks, which would probably provide trading opportunities.
It remains difficult to assess the downside risk of such a move and especially whether the January lows will be broken or not.
According to the weekly chart below showing the SP500 and Fibonacci time projections an important low could occur during the end of April.

Technical weekly 18022008

2008-02-18T10:44:00.006+01:00

Equities

Last week I said equity markets were likely to test new lows.

As you can see on the daily chart of the DJ Euro Stoxx 50, the index seems to draw what looked like a flag pattern. This pattern is a bearish one, so that the odds favor a break down and a retest move on the January lows.

A successful re-test could be the basis for at least a stronger rally attempt.

With developing a second down-leg and re-testing the January trading lows, we could expect a double bottom speculation coming into the markets near-term.

I'm watching out for a key reversal confirmation on the support and for a confirmation of at least a double bottom pattern to start buying tactically.

The next chart, a weekly-based chart of the MSCI World Index, continues to confirm that we are in a bear market. There has been a moving average downside crossover (20 weeks below 40 weeks), and the moving averages and Macd continue to move downward.

Bonds

This week, I compare the prices of 3 German Govt bonds.

They represent different durations in the yield curve. (30 years in red, 10 years in yellow and 1 year in black)

The chart shows that the longer duration bonds did better than the shorter-term ones. That situation, however, may be changing.

Recently, longer duration bond have fallen faster than shorter-duration funds.
That could be a reaction to new fears of inflation and that is why we decide to buy inflation linked bonds for our clients.

These are bonds that have some protection against inflation built into their pricing. That would seem to make them a good alternative in the current environment of falling yields and rising inflation pressures (record high commodities).

Brent(Oil)

No change , the Brent remains caught in a trading range (broadening pattern) between 87 and 98$.The long term trend is still up.

Euro

No change, the exchange rate was not able to break above the 1.5 resistance level. The short term correction may continue to the 1.43 support level.

Solaria update

2008-02-15T15:40:00.004+01:00

Solaria shares drop 20%!

A rumour in the market says that Co books 2008 sales in 2007, and will account them again in 2008.

As a technical analyst, I don't care about rumours but I was worriyng about the "big bearish double top".

Charts don't lie but people (or companies) sometimes do!

DJ Euro Stoxx 50 hourly chart

2008-02-14T10:51:00.002+01:00

The DJ Euro Stoxx 50 rebounds from a very oversold condition.
Technically speaking a trading buy signal will be validated only above the 3900 resistance level.
A breakout above this level could extend the rally 6% higher.

Technical weekly 12022008

2008-02-12T13:48:00.000+01:00

Equities

Equity indices remain quite weak and they will more likely retest January lows.

We are waiting for a major selling climax (capitulation) and a bottoming process to go long (buy equities).

Most significant bottoms are a several step process, as steep market declines usually do not reverse straight to the upside (’V’ recovery), but typically involve a period of backing and filling.

For instance, the last major bear market bottom which ended in 2002 (SP 500) involved a period of base building, as prices tested the lows not once, but twice over a several month period.

For now the market (investors) thinks on the possibility of a technical recovery or of the continuation of the bearish trend.

But it will still spend several weeks to decide.

The hourly chart below shows that the trend is still down for the DJ Euro Stoxx 50 and that trading indicators like RSI or Stochastics are neutral.

Bonds(yields)

The trend is still down with the 3.65% level as target.

The risk/return is not so good for bonds (lower end of the descending channel) and once the current fly to quality will run its course, we believe bond price will be vulnerable to downside risk.

Brent(Oil)

The Brent remains caught in a trading range (broadening pattern) between 87 and 98$.The long term trend is still up.

Euro

The exchange rate was not able to break above the 1.5 resistance level. The short term correction may continue to the 1.43 support level.

Solaria

2008-02-07T16:44:00.000+01:00

New energy shares : hype and reality.
Hoping the price will not reached the target of this (big) double top.

2008-02-07T10:50:00.000+01:00

Technical ranking Stoxx sectors based on 3 different rates of change (1,3 and 6 months).
Momentum leads price, the challenge is to identify emerging strength and weakness with accuracy and consistency.
While major markets moves tend to be global in scope, some markets (sectors) are stronger than other, enabling investors to maximize bull markets profits by identifying the leaders and avoiding the laggards.
That’s why the current ranking position is compare to the position n days ago (normally 1 week ago.)

"click on the table to enlarge"

Technical scoring Stoxx sectors based on the 20 day (short), 50 day (mid), 100 day (long) and 200 day (very long) moving averages.From zero to ten points, scoring is green when improving, red when deteriorating and blue when unchanged compared to the previous scoring.

"click on the table to enlarge"

As you can see the sectors rotation forecast is mainly a relative one!

Buy&sell signals DJ Euro Stoxx 50 members

"click on the table to enlarge"

ISM non manufacturier

2008-02-05T16:31:00.000+01:00

L'ISM services US a très fortement chuté en janvier. C'est la plus forte baisse depuis le début de la série (juillet 97). Elle impliquerait - si on restait sur ces niveaux - une baisse du PIB de 6% au premier trimestre (en rythme annuel), ce que l'on a plus vu depuis début 1982.

Le graphique compare le SP 500 et une moyenne mobile de l'ISM non manufacturier.

Technical Weekly 04022008

2008-02-04T13:39:00.000+01:00

Equities

With an oversold bounce over the last two weeks, the DJ Euro Stoxx 50 is approaching a resistance zone from broken support and the 50-day moving average.(yellow line)

Before going further, we should know that the overall trend remains down for two reasons.

First, the index broke down in January with a decisive move below its 2007 lows.

Second, the 50-day moving average is below the 200-day.

The next thing to expect is a reaction rally back toward the recently violated neckline support, which is now overhead resistance.

While the market's recent performance has been good for bulls, you can see on the chart below that strong overhead resistance in the form of the long-term rising trend line lies dead ahead.

The next chart shows the same index but on a monthly basis.

Note that the monthly stochastic lines have just given a sell signal and the monthly MACD histogram has been negative for two consecutive months.

This downside crossover is the first since the last bear market began in 2000.

Technically speaking, I think the current rally may continue in the near term but I also think renew weakness will follow with indices possibly retesting January lows.

One last observation, according to the Stock Trader's Almanac, the January Barometer predicts the year's course for the SP 500 with a .754 accuracy and every down January on the S&P since 1950, without exception, preceded a flat or bear market

Bonds

No change, yields are still caught in a downtrend channel.

For the coming months I can not exclude the possibility of a deeper correction towards the important support of 3.65%.

Brent(Oil)

Oil is trading above support and the double top pattern highlighted last week was not validated . The long term trend remains bullish.

Euro

The rate continues to trade below the important resistance of 1.5.

Watching the two last candlestick patterns, I do not expect significant move in the coming days.

DJ Euro Stoxx 50

2008-01-31T10:23:00.000+01:00

The short term pullback may already be over.New low must hold.

If it does, wide trading range is expected with a lot of volatility.
Otherwise the downtrend will resume.

Matrice

2008-01-24T13:44:00.001+01:00

La matrice ci-dessous est un outil stratégique (et pas du"market timing") qui me permet de quantifier le trend et le risque return des différentes classes d'actifs.En voici la légende : SXXP=Stoxx 600 Yield = taux 10 ans allemand M=métaux industrielles CRB=matières premières EUR= €/$ AGRI= matières premières agricoles.

Emerging markets

2008-01-24T11:50:00.001+01:00

As you can see on this weekly chart, the MSCI Emerging Markets is right on support.
Most technical indicators I follow are still bearish and the last candle is bearish.
I will at least wait for a stabilisation before buying.

Fibonacci time cycles

2008-01-23T09:10:00.000+01:00

Please find here a quick study of the SP500 about time analysis.(coming from Bloomberg)
This chart analyse the relationship between price and time using Fibonacci time projection.
By projecting cycle forward using Fibonacci percentages,(within Elliott waves analysis) you will find that most of the bottoms on the way up occurred within a couple weeks of the projection.
The next projected date in the pattern?
The end of April.

Marché baissier?

2008-01-22T16:52:00.001+01:00

L'ensemble des différents indices boursiers sont désormais engagés à la baisse suite à la validation de figures de renversement baissières de grande envergure.
Les investisseurs espéraient beaucoup de surprises positives du coté des résultats de sociétés. Malheureusement après les mauvais chiffres économiques de ces derniers mois, ils ont eu droit à des déceptions.
En effet et même si on ne peut pas encore tirer des conclusions définitives, le rapport entre surprises positives et négatives déjà publiés incite à la prudence puisque 53.5% des sociétaires du SP 500 ont seulement réussi à dépasser les attentes.
D’un autre coté d’un point de vue technique les grands indices ont atteint nos objectifs et beaucoup de mauvaises nouvelles sont déjà intégrées dans les cours.
Bien que le marché d’actions soit fortement survendu, il sera prudent de ne pas négocier l'émergence d'un rebond technique avant que des signes tangibles ne nous indiquent l'arrivée d'un tel mouvement. Je ne veux pas prendre le risque d’acheter de façon automatique sur des niveaux prédéfinis et je préfère :
1)déterminer d'abord une plage de cours à la hauteur de laquelle des formations haussières sont susceptibles d'apparaître.
2) Observer ensuite si elles apparaissent bien, et si d'autres conditions sont réunies (chiffres économiques, résultats de sociétés…)
3) avant de valider le démarrage d'un rebond technique.
Le point 1 est déjà réalisé mais pas les points 2 et 3 et il est donc pour l’instant encore prématuré d’investir.(never catch a falling knife).

Technical Weekly 21012008

2008-01-21T08:56:00.000+01:00

Equities
Last week was another bearish week for the market. It is now clear that the technical outlook remains bearish following the recent breakdown below key major supports. I also still think that technical bounces could start anytime,(see last weekly) because most indices are deeply oversold and sentiment is now very bearish. In these conditions, we do not think that the current downside move will be sustained. Nevertheless, it remains extremely difficult to time such technical bounces and even more dangerous to trade them, which confirms that the mid-term trend has changed. In a bear market, technical bounces are always surprising and often preceded by unexpected downside accelerations. So, due to the technical damage on long term trending indicators, we can not anticipate a major bullish reversal at this stage (even if we anticipate a sharp but short term rebound) and prefer to wait for a more significant bottom or at least a stabilization to start some bottom fishing. The long term chart of the Stoxx 600 presents a long-term view, which makes it more clear how serious the situation is. The questions remain as to how far down prices will go and how long the bear market will last? In the shorter term we have a minimum downside projection from the bearish descending triangle of 300-310, which correspond to the bottom of wave 4. That could mark a medium term low from which a bear market rally (wave B) could rise.

Bonds

Last week I said that a move towards the 4% was a high probability. This week, we believe a deep break below this level seems unlikely. For the coming months we can not exclude the possibility of a deeper correction towards the 3.65%.

Brent(Oil)

No change, the Brent is still correcting and a clear breakdown below the neckline (see arrow on chart) could validate a double top pattern. In this case the target of this bearish pattern would be 80$.

Euro

Start a pullback last week, this correction may continue towards 1.43. There is a strong resistance around 1.5.

Stoxx 600-Elliott Waves

2008-01-15T16:20:00.000+01:00

The Stoxx 600 already broken his long term uptrend in September.
The target of the first bearish wave (wave A) is 12.7% lower, which is the bottom of wave 4.

Technical weekly 11012007

2008-01-11T11:08:00.000+01:00

Equities

The new year on the US and European market got off to one of the worst starts in recent memory, with the SP 500 and the Stoxx 600 breaking below support zone.

Despite the amplification of the correction in the United States and the opening of bearish tendencies on the three principal indices (SP 500, dow Jones and the Nasdaq), the European narrow indices (Footsie 100, Eurostoxx 50, Cac 40, Dax 30) resist on or around their decisive supports. Currently, there is thus exists a dichotomy between the small and mid caps and the large caps which are overall considered as safe haven.Now that bearish tendencies were open on the three American indices, the realization of pullbacks bulls (which will come to reinforce these mid-term bearish tendencies) is foreseen at the immediate horizon. In Europe, the good resistance of the narrow indices during the American corrections makes it possible to think that many stocks are able to benefit from pullbacks and to rebound appreciably on a short term basis. That will not change their trend but will allow to sell under better conditions that in the beginning of the year.

The recent sector moves have been easy to track.

Investors have started the year buying defensive sectors (health care, telecom, utilities, oil majors) and selling cyclicals (auto, industrials, retail).

Bonds

No change, since May, the German 10 year bond yields are trading in a downside trading range. A move towards 4% is a high probability.

Brent(Oil)

The Brent has reached our target is still challenging the ascending support trend-line.A break below this support could extend the correction towards 90 $ but the long term trend is still up.

Euro

The recent correction was short lived and the rate is now close to challenge the 1.5 resistance level. As it is now overbought and close to resistance zone, I think that a more significant rise is unlikely for the coming days/weeks.

Bonds equities ratio

2008-01-10T11:44:00.000+01:00

After 5 years of underperformance the European bonds-equities ratio seems to be bottoming out.
One more worrying sign for equities!

SP 500 daily

2008-01-09T08:56:00.001+01:00

The chart of the SP 500 is now looking very dangerous.Even if the August low is not yet broken down , I think the risk is now very high to have another bearish leg.
The target of the descending triangle is 10% lower (around 1270).

Technical scoring and buy&sell signals

2007-12-27T14:32:00.000+01:00

Technical scoring from o to 10 points for the 18 Stoxx sectors+Real Estate.
Number in green when the scoring improving, red when deteriorating and scoring in bleu when unchanged.
The 2 last tables show some technicaly good and bad stocks.

"click on the table to enlarge"'

Ranking models

2007-12-27T14:22:00.000+01:00

"click on the table to enlarge"

"click on the table to enlarge"

The country/zones ranking model continues to deliver the same message : overweight emerging markets!

The Stoxx sectors model is bullish for Chemicals, Utilities, Telcos, Food&beverages and bearish for Real Estate, Travel&Leisure, Retail and banks

Best wishes for 2008!

2007-12-24T12:59:00.001+01:00

End year rally?

2007-12-21T14:36:00.001+01:00

On the hourly chart (DJ Euro Stoxx 50) below, you can see that a end year rally is still possible.
The target is the upper part of the rising channel.(+/- 4% higher).
But for now volume is still falling.(OBV indicator)

Baltic dry et bourses chinoises

2007-12-20T16:41:00.000+01:00

L'indice composite Baltic Dry Index (courbe jaune), moyenne des prix pratiqués sur 24 routes mondiales de transport en vrac de matières sèches (minerais, charbon, métaux, céréales..) a récemment atteint un plus haut historique et techniquement parlant semble prendre une tournure parabolique.
Cet indice est fortement corrélé avec la performance de la bourse chinoise.(CSI 300-courbe jaune)

Concrètement en 2008 il y aura lieu de surveiller de près les indices boursiers chinois car il y a un risque de retournement après les jeux olympiques.

Buy&Sell DJ Euro Stoxx 50

2007-12-18T16:59:00.001+01:00

"click on the table to enlarge"

Wheat

2007-12-18T13:34:00.000+01:00

Wheat prices rose 33.66% YTD and 71.88% YOY.After this amazing performance, you may think that this rally may end soon and that it is too late to buy.
This long term chart below gives another perspective and tells another story.

This is a very bullish chart!

Technical weekly 18122007

2007-12-18T11:17:00.000+01:00

Equities

Based on a favorable seasonality, short term oversold condition, extreme pessimism and a friendly Fed, I turned short-term bullish for a year end rally. However the recent downside acceleration deteriorates the short-term technical outlook.

So, I need a long term model to convince us that the long term outlook is still good.
A model’s greatest value is that it provides an objective assessment of the consensus of the indicators.
Forecasting procedures can be used to place current developments in the context of long term probabilities if they are used in conjunction with an objective model that enable you to maintain flexibility in responding to changing market conditions.
This model isn’t a market timing tool, but it will give you a clear perspective on risk and reward.
If it indicates that the market outlook is risky, you should respond by maintaining a defensive investment approach.
When the model starts to indicate that the skies have cleared and that there is little risk on the investment horizon, you can again be confident in taking an aggressive approach.
To determine the quality of the trend, I use a weighted combinaison of 3 waves of trend, based on different time frames.(monthly, weekly and daily)
The stronger weight is given to the long term trend.
I also used a risk return approach; this tool tries to define the potentiel of a trend.
The higher the score, the higher the probabilities of higher prices in the future. The stronger weight is also given to the long term trend.The combination between the trend and the risk return model is the matrix.

As you can see, based on this technical model, the risk/return and the trend for the Stoxx 600 remain weak.

Bonds
Since May, the German 10 year bond yields are trading in a downside trading range. As the yields trades now close to resistance and are overbought, I foresaw lower yields for the coming days.

Brent(Oil)
No change, the Brent is still challenging the ascending support trend-line.

A break below this support could extend the correction towards 80 $ but the long term trend is still up.

Euro
Last week I said that a break below support would suggest a much larger correction.For the coming days/weeks a move towards the 1.422 level, which is upper part of the bullish long term channel, seems likely.

€/$

2007-12-15T18:54:00.000+01:00

Bearish signal for the rate today.A move towards the 1.422 level, which is upper part of the bullish long term channel, seems likely.

EMU GROWTH/VALUE

2007-12-13T18:45:00.000+01:00

Is it still the time to switch from value to growth?
The long term chart (since 99) below shows a ratio between Dexia EquityB EMU growth versus value.

Euribor-DJ Euro Stoxx 50

2007-12-13T18:41:00.000+01:00

Euribor 1 M rises close to a 7 year high.

The last time the black line (stock market) crosses below the yellow one (money market) it was in September 2000

Seasonality

2007-12-11T17:20:00.001+01:00

According to this chart, equity markets will remain bullish into December.

Technical Weekly 10122007

2007-12-10T11:09:00.000+01:00

Equities
On a short term basis equity indices are still bullish but as you can see on this first chart of the DJ Stoxx 50, the index is now overbought and a test of the resistance is now developping.

The second chart shows the same index but with a DMI system. The DMI system is made up of three lines ; the green line which measures the buying pressure (+DMI), the red one which measures the selling pressure(-DMI) and the white line which is the ADX.
This indicator measures the difference between +DMI and –DMI and indicates the trend of the market.
For now the system is bullish.(green line above red line)

What is interesting is the level of the ADX, a level below 25 indicates that the market is caught in a trading range and a level above 25 indicates a trading market. The latest values of the ADX for major indices confirm that equity markets are now range bounded and that the “buy and hold” approach must be change into a “buy and sell” approach.
DJ EuroStox50 :ADX :18.43

SP 500 : ADX: 20.26

MSCI World : ADX :19.94
MSCI Emerging markets : ADX : 20.56

Bonds

The German 10 year bond yields are still trading around the 4% level.

The ADX indicator (16.07) indicates a sideways range between 4% and 4.25% for the coming days.

Brent(Oil)
The short-term correction continues and Brent is now challenging the 88 support zone.

A break below this support could extend the correction towards 80 $ but the long term trend is still up.

Euro

After the recent correction, the trend of the euro remains long term bullish.

As long as the euro remains above its channel support line (currently, this line lies around 1.46), the outlook would remain higher with the upper part of the channel 1.500 as first target.
A break below channel support would suggest a much larger correction.