Is the DAX about to form a massive, bearish “double top” pattern? The German index is approaching its 2011 highs in the 7600 region, and were it to reverse around there, a major bear-market move could follow. I do not envisage this, however. I reckon the DAX’s uptrend is in good shape and is set to continue. The rally that began in mid-November is in its earlier stages, leaving plenty of scope for upside and opportunities to join in. As such, I am seeking to buy as the market recovers from intraday weakness. The doomsayers are to be ignored. The only disaster on the horizon is what’s going to happen to their accounts.
Click here for analysis of some leading European indices.
I said yesterday morning that copper and Brent offered the better opportunities in the commodities complex and so it proved. Gold and silver continued to suffer weakness yesterday and the former is flirting with giving a change-of-trend sell-signal on its swing-chart this morning. My feeling remains that the precious metals are likely to join EURUSD and the other commodities in rallying before long, but am not really interested here until there is a sign that this process is underway. Copper looks the best of the bunch again today, and I’d be happy buying.
Click here for analysis of commodities and EURUSD.
WALL STREET OUTLOOK
The S&P gave a repeat sell-signal on its swing-chart yesterday. I did not follow the signal, not least of all because it is still an isolated one for now. The Dow is in a swing-chart uptrend, while the Nasdaq did not give a signal.
I believe firmly that the S&P’s signal will turn out to have been a red herring and that Wall Street will continue its upwards charge. Had the selling that we saw yesterday been accompanied by much higher volumes, I might feel somewhat differently. However, I see the action as a mere shakeout within an ongoing uptrend. If the US indices bounce today, as looks likely, I would want to get long.
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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