Even during strong uptrends, my research has found that only around 56% of days see price gains in the FTSE 100. So, I read pretty much nothing into the lack of progress in the indices over the last couple of sessions. The technicals for the European markets remain solid, and my only thoughts are with buying them for now. In fact, I am heartened by just how little ground they have ceded during their intraday sell-offs. This is a characteristic of a strong advance. Here, I show the DAX’s 83-day cycle, which is pointing to further gains for the German index as we head into 2013.
Click here for analysis of some leading European markets.
I am away tomorrow so there will be no daily Outlooks.
EURUSD has this morning given a repeat sell-signal on its daily swing-chart. While this was not what I was expecting to happen, it makes little difference to my pro-single currency and pro-commodities stance right now. I think there is a reasonable chance that EURUSD will stabilise and resume its rally shortly thereafter. Copper continues to look the most attractive trade at the moment. By contrast, I am mildly negative on gold and silver, but only on a very near-term basis.
Click here for analysis of some leading commodities and EURUSD.
WALL STREET OUTLOOK
As a bull, I like to see the Nasdaq leading the way up. Yesterday, it did the opposite, which presents a clear challenge to my optimistic outlook. Nevertheless, I am keeping faith with the case for ongoing gains. It would be an odd sort of rally that ended at the sort of modest levels that we have so far seen.
The gap between bulls and bears is now widening in favour of the former, according to the latest AAII data. In this week’s survey, 42.2% were positive and 34.6% negative. The spread of less than 8% does not denote excessive exuberance, however. There is scope for Joe Public to turn much more bullish yet.
I am looking to buy on the first signs of a renewed strong rally.
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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