CAC 40 bear flag French index forming bear flag after bull channel was broken.
comments on the chart.
Check my previous idea in weekly chart for CAC40 and FTSE.
Indices Europe
CAC40: Correction over?Yesterday the index broke through it's 50 day EMA, however because of independence day it opened lower this morning, so it will be interesting to see how index will open next Monday to see if the CAC has really broken through the resistance.
If so I'm going long, and I will target 4550.
Please share your opinion in the comment section.
CAC40 outside bearish week, expect continuation move next weekEuropean indexes ended the week lower first time for the last two months — something to take notice. French index CAC40 was the worst performer, broke its accelerated trend line and closed below 8 EMA. It will be healthy to see some type of consolidation after the big move up with a potential intermidiate target at 4,264 where 50 EMA is situated. But first it should break down 21 EMA. If buyers want to continue to control price they will defence the break out point of 4,500.
VIX: Long which means that indexes such DOWI SPX should be shortWell, VIx is in a forced uptrend, because of the oversold level on the one hand, and the overconfidence of the market on the other. It means that all indexes are higher then they should be.
Stoch switch from the oversold level to a regular long level. This is the initial sign of a reversal trend in Indexes as well as on VIX. At least a technical correction for the equilibrum.
CAC40: ECB interest rate decision+CorrectionECB President was very clear. There is yet no sign of growth in Europe and worst, a risk of deflation. Refi interest rate has been lowered, and even on the deposit rate, ECB decided to go to a negative rate, like BoJ did in the past.
One can think that money withdrawn from the saving accounts would go on the market, but the market is very week, with no growth prospect.
CAC40 has been artificialy very high with no reason. QE3 is coming to an end and there is no plan to delay the tappering.
On the other hand, the gentle end of FEd's QE3 and the eventual European Central Banks QE based on ABS as I have mentioned in the past can force us to think that, CAC40 will first face a 3 phase correction.
Then when ECB will announce in September the readiness of the institution to launch a European QE, CAC40 will smoothly start to go up again, virtualy and artificialy with 5500 or 6000 as a headline goal. the trading plan is being made.
But for the time being, the correction may be done in 3 phases. Phase 1 the objective is 4400, Phase 2, after a little pull back, the objective may very much be 4200, and phase 3 should go as low as 4000. After that level, we can consider ourself in a double bottom pattern, or a falling wedge. Double bottom at around 4000 may very much be the chart we would see at the end of the 3rd phase. But all this is to be followed...
CAC40: A clear correction signal toward 4450 and even furtherCAC40's was on an excessive level. Above 4506, it is a very illusive and excessive level as far as I am concerned. YOu can clearly see on my previous studies that my headline goal was 4506. I could have reviewed this level if ECB was clearly announcing a European QE which will not yet be the case.
Having said that, on a purely technical aspect, the index may face a correction towards 4450 and even lower.
The rising wedge pattern is very clear. And the break may come bellow 4480....
CAC40: Still Short from 4506... Nothing to fuel the upsideWe came at the very limit of what CAC40 can reach. Above 4506, there is no technical, macro economics, micro economic or market justification.
Having said that, of course, at the end of the day, it is the difference of weight between buyers and sellers.
So far, it appears that buyers are at majority in the market. However, if Bears pull the trigger, it's going to hit hard, painful low, and unless ECB announces an European QE which is not the case.
We may think that if ECB lowers its interest rate bellow 0%; saving may fly to the market, but bellow 0% f interest rate, it means deflation, it means that economy is not catching up in the Eurozone, etc.... So anyway, at least a short for a technical correction.
$CAC40: Support tested today. Crucial times are very close nowCrucial times are very close now. Will wait for the closing. If the $CAC close above his support and Fibo 23.6%, we could play the upside move to 4514pts. If it close below I'll short the $CAC. My 1st target will be 4345pts.
CAC40, the tricky index of the WeekIt was interesting to observe CAC40 this week. Despite the move down of DAX30, DJI, SP500, NSDQ, event Eurostoxx, CAC40 try to stick upside at a range between 44500 and 4500. MACD shows that there is no momentum, no more steam to keep CAC40 that high up. But STOCH shows that there is a try to keep it up at 4500 as if this range would be a proof of a healthy French economy which by the way is not the case. Keeping in mind that there are European Parliament elections in France on May25, I may think that CAC40 is artificially high, hold that high by French banks in order to limit the effect this could have on Front Nationale. I think that after May 25, and with the outcome of the French EP elections, CAC40 would loose serious ground.... Let's see....
CAC40 is about to go down?The Chart clearly shows a double top pattern.... If we observe the RSI, it appears the there is a possibility that the bull trend can reverse and we may be on the eve of that reversal.
