After two weeks of political turmoil in the US we finally got a more balanced close last Friday. Here are the daily and weekly long term bar charts to calm down with. SP500 and the DAX are outstanding and the DOW and FTSE looks less strong. I cannot remember a divergence between these charts this big before. As I have pointed out many times, when a big trend turn around occurs they all go in the same direction and use to follow each other before the drop or uptrend. FTSE and SWED use to show the way. The big surprise is the DOW which use to be at the forefront now actually is the weakest. Is that sideways trend the leader of the indexes to follow, and SP500 and DAX overdone or is it the the opposite. Only time will tell. Every analyst has his own opinion of the current situation and they are all over the spectrum from very bullish to extremely bearish.
My own opinion is still that we are seeing a topping out process in the aftermath of the US political settlement and lots of good news from Asia, especially China lately. The 10 year notes are up and the yield is down to 2.50 percent again. Europe looks stronger all over and optimism is leading many indexes, see the IBEX for instance.
Technically the indexes need a correction and SP500 already on Monday will be confronted to take out the long daily top channel or not. A stop for this index and the DAX for not taking a new high could be the end. But the NASDAQ is in a very strong uptrend and lots of tech shares are in the SP500 which lift this index. However there are just a hand full of tech stocks that rallies now, for instance Google which crossed the 1.000 dollar barrier by rising 14 percent on Friday.
My own opinion is still that we are seeing a topping out process in the aftermath of the US political settlement and lots of good news from Asia, especially China lately. The 10 year notes are up and the yield is down to 2.50 percent again. Europe looks stronger all over and optimism is leading many indexes, see the IBEX for instance.
Technically the indexes need a correction and SP500 already on Monday will be confronted to take out the long daily top channel or not. A stop for this index and the DAX for not taking a new high could be the end. But the NASDAQ is in a very strong uptrend and lots of tech shares are in the SP500 which lift this index. However there are just a hand full of tech stocks that rallies now, for instance Google which crossed the 1.000 dollar barrier by rising 14 percent on Friday.
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