Not only did the FTSE rally once more yesterday, in line with my call, but it also did so on expanding volume. The number of shares changing hands in London increased for a third day in a row. Admittedly the total was lower than, say, during the last three days of the selling around the middle of the month. However, the combination of rising prices and higher volumes is a positive one, as far as I am concerned. The real test for the UK index is now not far off. It needs to pierce the 5917 area in some style. I remain a bull of the FTSE and of the DAX.
Click here for analysis of some leading European markets.
Despite the dramatic falls in precious metals on Wednesday, I have kept faith with them. The lower panel of the accompanying chart shows one important reason why. Silver has been leading the way strongly during the recent rally and continues to do so. Leadership from the semi-precious metal is clearly bullish in these situations. It shows genuine risk appetite on the part of traders, given silver’s inferior liquidity and propensity to outperform during “risk-on” phases. I am especially minded to seek longs here right now.
Click here for analysis of some leading commodities and EURUSD.
WALL STREET OUTLOOK
As the doubters continue to fret over the fiscal cliff and anything else that they can seize onto, Wall Street continues to push higher. I do not mean to underestimate the risks here, but this is a rally that is in good shape. In time, I can easily see the present move extending to 10% up from the recent lows in the case of the S&P, taking the index to 1477 or so. As such, there will be plenty of other opportunities to join this move on the way up, for those that have missed out along the way. I would not hang around, though. The US are still to be bought on intraday dips, in my view.
Click here for analysis of the US indices.
MORE FROM DOMINIC PICARDA...
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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