If my inbox is anything to go by, there is still plenty of scepticism out there regarding the gains in European equities. Among the leading concerns are the US fiscal cliff and continental recession. What is particularly odd is that most of my correspondents seem to acknowledge that the technicals are good right now.
My answer: focus on the trend, and block out the rest. There is still a lot of potential upside on the table from the DAX and FTSE, especially in the case of the former. I continue to maintain that this rally is still only in its early to middle stages. I want to keep buying the recovery from intraday dips.
COMMODITIES OUTLOOK
09.22
EURUSD is on its way to reversing the downtrend on its swing-chart. The single currency would give a change-of-trend buy-signal on a move above $1.3137. Admittedly, it would also give a repeat sell-signal on a dip today below $1.3045, but that is not what I expect to occur. Aside from some intraday overboughtness, I see the rally here as being in good shape. I envisage it extending further in the near-term therefore, and commodities continuing to benefit therefore.
WALL STREET OUTLOOK
12.48
Both the S&P and Nasdaq have now given repeat sell-signals on their swing-charts. And I have followed neither of them. I think the Dow is telling the real story here, as the only index that remains in an uptrend on its swing-chart. I said in last week’s main column that it could be a wobbly rally, and so it is turning out. But there is still much to be positive about here, including daily momentum readings, breadth, and the strength of the move up from the November lows. Throw in all the scepticism and the bullish seasonality, and you’ve got the perfect ingredients for a December rally. I only want to be long here.
for analysis of the leading US indices.
