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Equity markets are in the red this morning, as markets trade back from their highs on concerns that European Central Bank President Mario Draghi might disappoint on Thursday, delivering limited action versus what anticipated (smaller cut to rates, no more QE). For so long the master of rhetoric with his soothing words speaking louder than his actions, at this stage of the financial crisis recovery markets are in need of concrete action. Hence last Monday’s disappointment at the lack of product from the G20 meeting of finance ministers.
Note also JP Morgan strategists turning more bearish on equities, having correctly called the February rally on stimulus hopes. Nonetheless, we remain at or close to 2-month highs, investors appeased by an oil price well off its lows and risk appetite buoyed by a resurgence in bullishness towards emerging markets and commodity prices (more stimulus). There is still potential for current index sideways activity to merely be consolidation before another rally.
UK Index testing 3-week rising support at 6160. DAX still sideways around 9800. Wall Street testing 3-day rising support at 16940. Gold bounced off 3-day rising support at $1260.
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UK 100 back from 6200 but still holding 3-week rising support. Bulls hoping for another bounce and proper break beyond 6200 to allow for another leg higher towards early Dec highs. Bears hoping for a breakdown and return towards 6000.
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Possible support
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Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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DAX still sideways around 9800 with the bulls waiting for rising support to kick back in. The Bears , however, are concerned about the last 5 days which have all seen sell-backs from their ventures beyond 9800.
Solid Green line
Possible support
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Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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US Dow Jones testing 16940 rising support from md-last week. Potentially topped out at 1700, requiring a moderate sell-off before 3-week support kicks back in just above 16800.
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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Gold’s has bounced of its 3-day trendline of rising support. While the bounce is in-line with equities off their highs and offers the possibility that a risk-off surge could see the yellow metal regain recent highs of $1280, if it is indeed being helped by short covering and ETF buying (potentially shortlived). A dollop of appetite for risk assets like equities, could easily lead to a Gold breakdown.
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
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