The future is printed money. Not my words, but those of the IMF. The boom and bust era in equities that has reigned since 2000 has some way to run, in my view, therefore. I think we will see further QE from the Bank of England this year, and another bout of intervention from the European Central Bank. Unfortunately, neither is likely to be forthcoming quite yet. The pressure remains to the downside in European equities.
I was distrustful of the DAX and FTSE’s rallies going into yesterday and with some justification. Both have tailed off sharply and I think there is a good chance that we will revisit the recent lows. Even if I am wrong, and both indices strengthen anew today, I would prefer to do long positions in the US markets than over here.
Click here for analysis of DAX, FTSE, EURGBP and GBPUSD.
The last two summer lows on Wall Street have taken time to carve out. In neither case did the daily first oversold reading lead to a lasting low. It is beginning to look as if the current sell-off is going to follow a similar pattern. The latest bounce off the lows to date failed yesterday, and the indices have backed up sharply since then.
I did briefly buy the Nasdaq yesterday and managed to grab a few points in the process. But the outlook has worsened once more, so I am looking for possible shorts in the S&P and Dow.
Click here for analysis of the S&P, Dow and Nasdaq
Commodity Outlook will return tomorrow.
**Dominic will be presenting at the London Investor Seminar on 18 June - book your place today.**
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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.