Europe still has a long way to go until new highs, see why...

It had said that on Tuesday session, where European indexes rose on average more than 2%, the first resistance zone and since then have been overcome we started to have minimum and maximum growing, which is always a sign of solidity. But that's not why we think we will ever directly to the annual maximum, reached in April. In the past few weeks correction procedure, it is certain that the weekly overbought relaxed enough, but we oscillators in no man's land, halfway between the oversold and overbought, and rarely indexes usually resume the upward trend from these levels It is indicated in many of the currently oscillators. I continue to put as most likely scenario the return to the annual maximum, but without haste, with alternating rises and falls thus consuming more time than depth. In addition, European stock markets will remain attentive to the results of the municipal elections this Sunday in Spain, which will most likely be a foretaste of the upcoming general elections. Needless to say, the first sessions next week will be directly influenced by the outcome of these elections, as foreign investors continue or not to trust the country. That is if in doubt, uncertainty is the number one enemy of the markets.

The signal that somehow we anticipate the beginning of a new upward trend through the fact that the European bank sector index (SX7E) can overcome the resistance zone which features in 159.42 points. Above said resistance, the logic will rely on a new bullish impulse to launch the index above the annual maximum (162 points) and, on a higher plane, above the maximum 2014 (163.34 points).