This is further to my earlier post on ESA: Make or break it. Since then the ESA has broken down from the continuation wedge and appears to have found support on the 200-DMA which coincides with a 78.6% retracement. Given the heavy data dump coming out this week and the US heading in earnings season, I would play it on the safe side to close shorts and look for spec longs. My view is also colored by the fact that the Stoxx 50 and Stoxx 600 are also sitting on trend line support as with some of the major tech names which I have highlighted as potential shorts.
The 1Q data dump and earnings should be relatively strong given the underlying economy is doing well and the recent protectionist actions taken by the Donald will take time to flow through the hard data. Do note, this is a tactical call. The overall set-up is still negative as previously mentioned, the mismanagement from the Donald WILL eventually flow into the data and of course, an xABCD pattern which I am describing here is a reversal pattern.
The 1Q data dump and earnings should be relatively strong given the underlying economy is doing well and the recent protectionist actions taken by the Donald will take time to flow through the hard data. Do note, this is a tactical call. The overall set-up is still negative as previously mentioned, the mismanagement from the Donald WILL eventually flow into the data and of course, an xABCD pattern which I am describing here is a reversal pattern.