European markets continue to display healthy primary up-trends with the exception of the FTSE 100 which warns of selling pressure.
Germany’s DAX broke through medium-term resistance at 8500, offering a medium-term target of 9000* and a long-term target of 9500*. Reversal below 8000 is unlikely, but would warn of another test of primary support at 7500.
* Target calculation: 8500 + ( 8500 – 8000 ) = 9000 ; 8500 + ( 8500 – 7500 ) = 9500
France’s CAC-40 is testing resistance at its 2011 high of 4200. Retracement to short-term support at 4100 is likely. Respect of support would be a bullish sign, while breakout above 4200 would offer an immediate target of 4300* and a long-term target of 4500*. Reversal below 3900 is unlikely but would warn of a bull trap.
* Target calculation: 4100 + ( 4100 – 3900 ) = 4300 ; 4050 + ( 4050 – 3600 ) = 4500
Spain’s Madrid General Index followed through above 900, but is now retracing to test the new support level. Respect would confirm a long-term advance to 1050* (960* in the medium-term). Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 840 is unlikely, but would warn of a bull trap.
* Target calculation: 900 + ( 900 – 750 ) = 1050 ; 900 + ( 900 – 840 ) = 960
Italy’s MIB Index is testing resistance at 18000. Retracement to support at 17500 is likely, but respect would be bullish. Breakout above 18000 would offer an immediate target of 18500 and a long-term target of 20000*. Reversal below 16500 is most unlikely, but would warn of a bull trap.
* Target calculation: 17500 + ( 17500 – 15000 ) = 20000
Bearish divergence on the FTSE 100 (13-week Twiggs Money Flow) warns of strong selling pressure. Reversal below 6400 would warn of a primary down-trend, confirmed if the rising trendline is broken. Reversal of TMF below zero would strengthen the signal. Breakout above 6750 is unlikely, but would signal a medium-term advance to the 1999 high of 7000.
