We have enjoyed a sunny stock market climate so far, but we may probably see some clouds within the next few days. The question is whether these will be just passing clouds or will remain throughout the summer.
Stock indices continue to show strength, especially in the USA where they’ve once again set new highs. In Europe, led by the German Dax, indices bounce back trying to reach yearly highs. Following the rises recorded in July, a “small, healthy” correction would be logical, but what levels should indices maintain in order to stay bullish? From a technical point of view, to maintain the bullish structure which began on the summer solstice, we believe that rates should not fall below the 8,000 point levels for the German DAX30, 2,630 points for the EUROSTOXX50, and 1,640 points in the case of SP500. If they don’t fall below these levels, the summer is likely to be hot with widespread temperature rises. Should there be sharper falls, however, it would announce the arrival of considerable storm.
Today marks 15 years … Happy Birthday!
In 1998 we had a bumpy summer. The stock market had been bullish for several consecutive months, until there was an abrupt halt in April. Until a small correction was made which ended in mid-June, coinciding with the expiration of futures (just like this year!) The markets once again recovered until late July, setting new highs by a few points. Further down, you may see the DJ Industrial Average in the summer of ‘98 on the left, and next to it the same American index today. The green line is the 200 session average. The fall of 1998 began on Monday, July 20th, and its equivalent would be today Monday 22nd! Will history repeat itself?
