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OPINION

Rally onwards

Rally onwards
January 18, 2013
Rally onwards

There’s every reason to keep faith with the current rally in equities, as I see it. Seasonally, this is a good time of year for stocks, while the FTSE is breaking to new highs for the uptrend that began in March 2009. At the same time, neither the FTSE nor the DAX are overbought in the way that they typically are at or around major highs. Without wishing to stray into fundamental territory, European equities are also very cheap. Even the legendarily bearish Albert Edwards of SG says so!

In this environment, my near-term strategy remains bullish, seeking to buy the intraday pick-ups in both DAX and FTSE. The former is looking especially interesting just now, having given a buy-signal on its swing-chart yesterday. I am calling also for more upside in EURGBP, although I think a more substantial correction here could occur soon.

for analysis of some European markets.

COMMODITIES OUTLOOK

10.05

Gold has reverted to an uptrend on its swing-chart, following on where silver led earlier this week. The semi-precious metal’s strength is a positive omen in this situation, although it is too early to say whether this will turn out to be yet another false dawn. For now, I am happy enough to try and ride the gains. Brent, meanwhile, remains treacherous and I continue to recommend steering clear. A bit more of a retreat in EURUSD should set up another buying opportunity, although a larger correction is probably now on the horizon.

for analysis of some leading commodities and EURUSD.


WALL STREET OUTLOOK

11.59

The S&P has made a new bull-market high and the Dow is not far behind. As a technician, I have to love new highs, especially when they are not accompanied by any of the traditional warning-signs of a pending top. The rallies that have made up this bull market have generally been double-digit affairs, typically in the mid-teens. As of yesterday’s highs, the Dow had gone up a mere 9.3%. There is time and scope for the present move to extend, therefore. I am looking for longs in the Dow and S&P. I am less keen, but still bullish, on the Nasdaq.

for analysis of the US indices.

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