EUROPEAN OUTLOOK
The DAX and FTSE have managed somewhat respectable rallies so far, although nothing spectacular.
I like early-stage bull moves to be strong and thrusting, and these aren’t all that impressive in the bigger scheme of things. Still, I am willing to be persuaded. If they can rally hard from present levels, I would have to consider joining in on the long side. For the moment, I remain on guard for them to reverse at one of their intraday moving averages, whereupon I would go short.
The pound’s attempt to rally against the dollar has totally left me cold, and I would certainly contemplate shorting Cable today.
Click here for analysis of some leading equity indices.
COMMODITIES
The Euro’s ongoing weakness is an obvious problem for my bullish view on gold. I want to start buying the yellow metal on a near-term rally, but the odds of such a move are under attack from the single currency’s inability to progress against the dollar. I do not hold particularly high hopes for whatever is going to emerge from the latest European summit. The Eurozone is currently hostage to the Greek political situation and we are still almost a month off knowing the outcome. Without more clarity on the Greek situation, I cannot see the ECB taking serious action. Why throw good money after bad?
Nevertheless, if gold can resume its rally today, I will likely try and participate.
Click here for analysis of some leading commodities and EURUSD.
WALL STREET
When markets bounce back from oversold, I like to see them do in style. Yesterday’s action on Wall Street didn’t really fit the bill here, Nasdaq excepted. I suppose that it is bullish that the tech index led the way, gaining 2.8% over the day. This is clearly the index that I want to play if this move higher continues. It became heavily oversold on its recent decline and is due a really powerful bounce, as I see it.
Click here for analysis of the US indices.
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Dominic Picarda is a Chartered Market Technician and has co-ordinated the IC's trading coverage since 2006. He is a regular speaker at trading and investment events and also holds the Chartered Financial Analyst qualification.
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