How bullish and bearish forces align for stock indexes, forex and other global markets, both technical and fundamental outlooks, likely top market movers
Summary
–TECHNICAL OUTLOOK: Bullish But Weakening Momentum Versus Entrenched resistance cap upside, tempt tests of support
–FUNDAMENTAL OUTLOOK: Likely to see more of the same and what might actually change prevailing trends
–BIGGEST QUESTIONS: Geopolitical dramas threaten short term volatility, but not more
–WHAT TO WATCH: moderate calendar risk, two similar geopolitical tensions, etc.
TECHNICAL PICTURE
We look at the technical picture first for a number of reasons, including:
Chart Don’t Lie: Dramatic headlines and dominant news themes don’t necessarily move markets. Price action is critical for understanding what events and developments are and are not actually driving markets. There’s nothing like flat or trendless price action to tell you to discount seemingly dramatic headlines – or to get you thinking about why a given risk is not being priced in
Support, resistance, and momentum indicators also move markets, especially in the absence of surprises from top tier news and economic reports. For example, repeated failures to break through resistance tempt profit taking and so make markets more vulnerable to sell-offs.
Overall Risk Appetite Medium Term Per Weekly Charts Of Leading Global Stock Indexes
The Coming Week’s Top Lessons, Drivers, Things To Watch
Weekly Charts Of Large Cap Global Indexes With 10 Week/200 Day EMA [DATES] In Red: LEFT COLUMN TOP TO BOTTOM: S&P 500, DJ 30, FTSE 100, MIDDLE: CAC 40, DJ EUR 50, DAX 30, RIGHT: HANG SENG, MSCI TAIWAN, NIKKEI 225
Key For S&P 500, DJ EUR 50, Nikkei 225 Weekly Charts: 10 Week EMA Dark Blue, 20 WEEK EMA Yellow, 50 WEEK EMA Red, 100 WEEK EMA Light Blue, 200 WEEK EMA Violet, DOUBLE BOLLINGER BANDS: Normal 2 Standard Deviations Green, 1 Standard Deviation Orange.
Source: MetaQuotes Software Corp, www.fxempire.com, www.thesensibleguidetoforex.com
01 May. 11 11.06
Key Take-Aways: Continued Bullish But Weakening Momentum Versus Bearish Resistance
US And Europe: Long Term Upward Momentum Intact But Weakening From 13 Weeks’ Flat Range-Trading
- Overall risk appetite per US and European sample indexes show a 4 week uptrend, a 13 week flat trading range, and long term uptrend since at least mid-2012. In other words, short term and long term trends favor more upside.
- This bullishness is confirmed by the S&P 500 and DJ EUR50 weekly charts both closing within their double Bollinger® band buy zones. That suggests that their medium-long term momentum is strong enough for the odds to favor more upside.
- That said, signs of weakening in the long term uptrend continue to build
- 13 weeks of going nowhere is undermining upward momentum for the US and Europe.
- Virtually our entire sample US and European charts show bearish doji or “hanging man†candlestick patterns, suggesting indecision. Granted, these are not decisive by themselves, as we’ve seen a lot of those in recent months without any serious pullbacks.
Asian indexes remain a more mixed bag, making it hard to discuss these markets as a whole. Longer term the continued struggles of the two biggest economies, China and Japan, weigh on the rest of Asia, as does the eventual rise in US rates that pressures emerging market currencies and asset markets.
