Kumowizard

EUSTX50 - Super lift. The only way is up...???

FX:EUSTX50   Euro Stoxx 50 index of European listed shares
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It looks like it can never ever fall again! Central Bankers invented the perpetum mobile :-).
Yes, this market is very bullish , and it will remain bullish (that is something what we have learnt in last 3-4 years as a natural side affect of QE ). But as everybody knows it will pull back at some point within the trend. I've been also waiting for the pull back trigger signal for some time now, so as we have a major mkt moving US NFP data today, which can influance global risk sentiment, let's see what is the picture and what are the chances now?

Daily:
- Ichimoku setup is bullish , no signs of exhaustion really until Price can not even come back below Tenkan Sen. No Kumo overshade either, Chikou is in open space. Kijun Sen is slowly catching up to Price.
- The more we look at it, the most likely is that we see high degree wedge being built. These short term rising wedges within the major bullish trend tend to break eventually on the lower side, simply because as time passes, the probability of keeping the same pace of buying is decreasing. The move since January was pretty straight and vertical.
- Heikin Ashi had only one day of hesitation, followed by two green candles. The only minor signal that worths attention is the haDelta, which shows negative divergence. This means the pace of Price increase ( bullish momentum) is decreasing, and getting less strong compared to the previous move from 3050 to 3400, when haDelta printed its top.

4H:
- Bullish Ichimoku setup with only minor pull backs (called as Kijun retests). Bulls won't worry, until Price holds above Kijun Sen
- Short term support and break point is now up to 3520 - 3540 area.
- DMI/ADX is still bullish , with some minor drop in ADX .
- Heikin Ashi signals very short term bullish sentiment is getting tired, mkt might be ready for a minor pull back to Kijun and trend line again. HA candles with small body, haDelta turning down.

As a basic rule, correction and counter trend has chance to start only if Price makes a lower low, and breaks some relevant supports. Looking at the 4H chart, this should take some more time, so for now just keep our eyes on the 4H supports, and on daily Tenkan Sen (3562 at moment), and most importantly on the wedge! Sooner or later the time will come.

Any short trade attempts before a real sell signal has to be considered as a top hunting. It may work, but you must know its risk-reward is lower, so play only in small if you play it at all!
The more I look at European indices, the more bearish I get. I am not talking about a trend reversal, I don't think we are anywhere near that, but a correction is likely. Indices do not stay parabolic for long.
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Kumowizard PRO vlad.adrian
Yes, I agree. It will eventually correct 5-7 % from the highs. But if you consider where the fuel is coming from, and you read the ETF flows, you should not really be bearish on European stocks, but rather on SP500! The only reason SP500 is levitating is that European stock mkts are so desperately bullish. So when Europe starts its correction, US will probably fall more. Better to short US mkts now.
This strong USD will fundamentally kill it sometimes anyway. I mean even if the general big picture remains bullish in equity mkts, US will underperform and move kind of sideaway whole year. Similar to what happened to EUSTOXX50 in last years.
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For the moment, I do not want to take a short position in any of these indices. I do have long positions on individual stocks in US. For the moment, there is no confirmation for a correction, neither in Europe or US. I am just waiting and waiting for something.
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Kumowizard PRO vlad.adrian
Actually on SP500 I am already short with some. With very wide stop.
EUSTOXX50 is still a big question.
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